Trump Cancels Trade Discussions with Canada Following its Digital Services Tax on the U.S.

President Donald Trump announced on Friday that he is terminating all trade talks with Canada after the country decided to move forward with a digital services tax on U.S. tech companies like Meta. The president, who also mentioned high dairy tariffs, called Canada “a very difficult Country to TRADE with,” in a Truth Social post. Trump characterized the digital services tax as a “direct and blatant attack on our Country.”

The new Canadian measure imposes a 3% tax on digital services revenue made from users in the country for companies generating more than $20 million Canadian ($14 million U.S.) annually and will start to be collected on Monday, according to Bloomberg News.

“They are obviously copying the European Union, which has done the same thing, and is currently under discussion with us, also,” Trump wrote on Truth Social. “Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately.”

The law for the digital services tax was passed a year ago, but there had been some hope on the U.S. side that it would be ditched before it could be implemented. Trump went on to suggest that he would impose a new tariff on Canadian goods exported to the U.S., though he didn’t indicate what that might look like.

“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. Thank you for your attention to this matter!” Trump wrote, using his now-common sign-off.

The new Canadian digital services tax also applies retroactively back to 2022. Trump was threatening to annex Canada, dubbing it America’s 51st state, even before he took office for a second time in January. And relations with Canada have become incredibly hostile thanks to Trump’s unnecessary provocations.

Trump imposed tariffs on the entire world after his “Liberation Day” announcement on April 2, which slapped at least 10% on all goods coming into the U.S. from every nation in the world. For months, the president’s team has been negotiating with other countries, but so far hasn’t actually inked a solid deal with any of America’s largest trading partners. The U.S. and China have reportedly agreed to a rare earths deal, and the UK has agreed to a trade deal in principle, but Trump’s negotiators keep going on TV to insist real, comprehensive deals are just around the corner.

Trump had previously promised 90 deals in 90 days, but that simply hasn’t happened. Commerce Secretary Howard Lutnick told Bloomberg TV on Friday that the U.S. was “close to the finish line” on a deal with India, but they’ve been saying that for weeks. There was early speculation back in April that India may be the first to sign a major new trade deal with the U.S.

Trump has been frustrated with economic policy domestically as his so-called Big Beautiful Bill hasn’t yet made its way to his desk for signing. The bill is a massive tax cut for the wealthiest Americans and would kick roughly 10 million people off Medicaid. Trump had hoped to sign the bill by July 4 for Independence Day, but it remains to be seen whether that will happen. But the president wrote on Truth Social after his Canada post that he was looking forward to Republicans making that happen on schedule.

“The House of Representatives must be ready to send it to my desk before July 4th,” Trump wrote. “We can get it done. It will be a wonderful Celebration for our Country, which is right now, ‘The Hottest Country anywhere in the World’.”