In Response to Digital Tax, Trump Ends Trade Talks with Canada and Threatens Tariffs

President Donald Trump announced on Friday, June 27, via his platform "Truth Social", the immediate termination of all trade discussions with Canada in response to Canada's decision to impose a tax on digital services targeting American technology companies, describing it as a "direct and blatant attack on our country".

In a post by Trump, he stated: "Based on this egregious tax, we hereby end all trade discussions with Canada immediately", adding: "We will inform Canada of the tariffs they will pay to deal with the United States within the next seven days".

This sudden decision threatens the trade relations between the two countries, which are major partners in global trade, with their trade volume reaching about $762 billion last year, according to the U.S. Trade Representative's office.

On the other hand, Trump stated during a press conference at the White House that he intends to send a letter to the countries involved, including Canada, within "a week and a half", to determine the new tariff rates, while also mentioning his efforts to make trade deals with several countries, including India.

Canadian Prime Minister Mark Carney had announced last Monday an agreement between the two countries to work towards a "new economic and security agreement within 30 days", following a meeting on the sidelines of the G7 summit in Alberta, where Trump reiterated his stance on tariffs at that time.

A statement from Carney's office conveyed that the two leaders "exchanged updates on the key issues raised in negotiations regarding a new economic and security relationship between Canada and the United States".