Trump ends trade talks with Canada over tax on US tech firms

A participant holds an ‘Elbows Up Canada’ sign during a rally in response to United States President Donald Trump’s threats to Canadian sovereignty, on Parliament Hill in Ottawa, on March 9, 2025. — Photo from The Canadian Press via Associated Press

President Donald Trump said Friday that he is calling off trade negotiations with Canada in retaliation for taxes impacting major US tech firms, adding that Ottawa will learn of their tariff rate within a week.

“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,” Trump said in a post on his Truth Social platform.

He added that Canada will soon find out the levy it needs to pay to do business in the United States, calling his country’s northern neighbor “very difficult” to trade with.

Washington has previously taken issue with Canada’s digital services tax, requesting dispute settlement talks last year over the matter.

READ: Canada to ‘adjust’ counter tariffs on US metals if no deal in 30 days

While Canada’s digital services tax is not new — it was enacted last year — US service providers are “on the hook for a multi-billion dollar payment in Canada” by June 30, noted the Computer & Communications Industry Association.

While Canada has been spared from some of Trump’s most sweeping duties, such as a 10 percent rate imposed in early April on nearly all trading partners, it faces a separate tariff regime.

Since returning to the White House in January, Trump has also imposed steep levies on imports of steel, aluminum and autos.

Last week, Canada said it would adjust its 25 percent counter tariffs on US steel and aluminum after Washington doubled its levies on imports of both metals to 50 percent — if a trade deal was not reached within 30 days.