Trump Terminates Trade Talks with Canada Over Tech Tax Dispute

June 28, 2025 | TalkNation Politics

US President Donald Trump announced the immediate suspension of trade talks with Canada via social media on Friday, citing Canada’s 3% digital services tax that targets major US tech firms like Amazon, Apple, and Google.

Labeling the tax “egregious,” Trump stated: “We are hereby terminating ALL discussions on Trade with Canada, effective immediately.” He added that new tariffs on Canadian imports would be unveiled within the week.

The announcement comes just as both nations were aiming to finalize a trade agreement by mid-July. The unexpected move raises doubts over the future of US-Canada economic cooperation amid growing tension over digital taxation.

Canadian Prime Minister Mark Carney responded cautiously, saying, “We will continue to conduct these complex negotiations in the best interest of Canadians.”

The digital tax, passed last year, is set to go into effect Monday and is estimated to cost US firms over $2 billion annually. While Canada's government had hoped to resolve this issue through dialogue, Trump's action signals a sharp escalation in pressure tactics.

The US remains Canada's largest trade partner, with over $400 billion in goods exchanged in 2024. However, rising tariffs—including a 25% levy earlier this year citing border drug trafficking concerns—have already disrupted cross-border industries, particularly automotive supply chains.

Despite volatile rhetoric, analysts suggest Trump's playbook may simply be a tactic to force quicker negotiations. “It provides some space to hasten those talks,” noted trade policy expert Inu Malak.

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