President Donald Trump announced that he is ending all trade talks with Canada.
In a statement on Truth Social, Trump declared, “We have just been informed that Canada, a very difficult Country to TRADE with, including the fact that they have charged our Farmers as much as 400% Tariffs, for years, on Dairy Products, has just announced that they are putting a Digital Services Tax on our American Technology Companies, which is a direct and blatant attack on our Country.”
“They are obviously copying the European Union, which has done the same thing, and is currently under discussion with us, also. Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,” he wrote. “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!”
According to a report from Bloomberg, the digital services tax (DST) is a policy imposing a 3% tax on revenue brought in by companies such as Meta and Google with Canadian users. The tax applies to entities making more than $14.6 million a year.
Digital services revenue is earned through online marketing and advertising, social media, and sales of user data, a government website explains.
The 2025 National Trade Estimate Report says that most digital services taxes “have been designed in ways that discriminate against U.S. companies, as they single out U.S. firms for taxation while effectively excluding national firms engaged in similar lines of business.”
“Canada’s DST creates significant retroactive tax liabilities with immediate consequences for U.S. companies,” the report noted.
