Trump Ends U.S.-Canada Trade Talks Over Digital Tax

President Donald Trump announced the immediate termination of all trade negotiations with Canada in response to Ottawa's digital services tax targeting American tech giants such as Google, Apple, Meta, Amazon, and Microsoft. Trump characterized the tax as a "direct and blatant attack" on the United States, likening it to similar levies recently imposed by the European Union, and warned Canada that new tariffs on Canadian imports would be imposed within seven days. This move marks a significant escalation in tensions between the two close trading partners, who conducted $762 billion in trade in 2024, and follows previous U.S. tariffs on Canadian dairy, steel, aluminum, and automotive products. The announcement caused immediate market reactions, with Canadian stock indexes dropping and U.S. markets showing cautiousness amid concerns over unpredictable U.S. trade policies. Despite a previously cordial relationship between Trump and Canadian leadership, the digital tax dispute has severely strained trade relations, with Canada yet to respond formally to the latest U.S. measures. The digital services tax, retroactive to 2022, imposes a 3% charge on digital revenues exceeding a certain threshold from Canadian users, which the U.S. administration views as unfair taxation of American companies.