US President Trump ends trade talks with Canada due to digital services tax
Canada's digital services tax will hit companies, including Amazon, Google, Meta, Uber, and Airbnb, with a 3% levy on revenue from Canadian users.
United States President Donald Trump said Friday that he's suspending trade talks with Canada over its plans to continue with its tax on technology firms, which he called “a direct and blatant attack on our country.”
Trump, in a post on his social media network, Truth Social, said Canada had just informed the US that it was sticking to its plan to impose the digital services tax, which applies to Canadian and foreign businesses that engage with online users in Canada. The tax is set to go into effect Monday.
The digital services tax will hit companies, including Amazon, Google, Meta, Uber, and Airbnb, with a 3% levy on revenue from Canadian users. It will apply retroactively, leaving US companies with a $2 billion bill due at the end of the month.
“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately. We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period,” Trump said in his post.
Trump's announcement was the latest swerve in the trade war he's launched since taking office for a second term in January. Progress with Canada has been a roller coaster, starting with the US president poking at the nation's northern neighbour and repeatedly suggesting it would be absorbed as a US state.
Canadian Prime Minister Mark Carney said that his country would “continue to conduct these complex negotiations in the best interests of Canadians. It's a negotiation.”
Trump later said he expects that Canada will remove the tax.
“Economically, we have such power over Canada. We'd rather not use it,” Trump said in the Oval Office. "It's not going to work out well for Canada. They were foolish to do it.”
When asked if Canada could do anything to restart talks, he suggested Canada could remove the tax, predicted it will, but said, “It doesn't matter to me.”
Edited by Suman Singh