National News posted Jun 27, 2025 @ 10:54am by Iain Burns

Trump 'terminating' all trade discussions with Canada over digital services tax

Donald Trump has said he is “terminating ALL discussions” on trade with Canada “immediately” in response to Ottawa’s controversial digital services tax.

In a post on Truth Social, the US president said the tax “is a direct and blatant attack on our Country.”

He added: “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.”

The tax, which will target big American tech companies, takes effect on June 30.

Finance Minister François-Philippe Champagne said last week the tax is "going to be applied" despite strong opposition from both the US government and businesses in Canada and down south.

The tax affects the likes of Meta, Google, Airbnb, and Amazon, adding a three per cent levy on their Canadian revenues.

Critics have expressed particular frustration with the fact the tax will apply retroactively, meaning companies will be forced to pay billions of dollars in just a few days' time.

The vast majority of the revenue from the tax will come from American companies, many of whom have close relationships with Trump.

Earlier this month, a group of 21 Congresspeople signed a letter complaining about the tax, saying US companies would be made to pay US$2 billion in retroactive tax. Politicians on both side of the aisle have long complained about the tax, with the US under Joe Biden initiating dispute consultations with Canada under the CUSMA trade deal after alleging the levy unfairly targets US firms.

The timing of Trump's outburst comes at an unfortunate time for Mark Carney, who said on June 16 that he and Trump had "agreed to pursue negotiations toward a deal within the coming 30 days."

Rick Tachuk, the president of the American Chamber of Commerce, warned last week that the tax could derail those talks. He said the tax "undercuts" the discussions, telling the Canadian Press news agency it "would likely be viewed as a provocation."

Disappointed that trade talks have halted. Hopefully they resume quickly. As always, Conservatives are ready to help get a good deal for Canada. We must put Canada First.

At the same time, the government must take emergency action to bolster Canada’s economy:

Fully repeal the…
— Pierre Poilievre (@PierrePoilievre) June 27, 2025

But Champagne was not persuaded, saying on June 19 that the tax had been approved by Parliament and so would go ahead.

He said the tax "is not the big thing," explaining that "we had fairly long and extensive discussions at the last G7" about different tax regimes.

Value added tax (VAT) in Europe and the digital services tax in Canada are "neutral," Champagne said, meaning "there's no distinction in terms of import and export."

Reacting to Trump's statement today, Tory Leader Pierre Poilievre said he was "disappointed that trade talks have halted."

"Hopefully they resume quickly," he wrote. "As always, Conservatives are ready to help get a good deal for Canada. We must put Canada First."

He added that the government should take "emergency action" to boost Canada's economy, including by repealing Bill C-69, the industrial carbon tax, emissions cap and EV mandate.