WASHINGTON — President Donald Trump announced on Friday the suspension of trade talks with Canada in response to its decision to move forward with a tax on technology firms, which he characterized as “a direct and blatant attack on our country.”
In a statement on his social media platform, Trump revealed that Canada had recently confirmed its intention to implement a digital services tax affecting both Canadian and foreign companies conducting online business with Canadian users. The tax is scheduled to come into force on Monday.
“Given this unjust tax, we are ceasing ALL trade discussions with Canada with immediate effect. We will inform Canada of the tariff they must pay to engage in trade with the United States within the next seven days,” asserted Trump in his online announcement.
Canadian Prime Minister Mark Carney said his country would “continue to conduct these complex negotiations in the best interests of Canadians. It’s a negotiation.”
Trump’s announcement was the latest swerve in the trade war he’s launched since taking office for a second term in January. Progress with Canada has been a roller coaster, starting with the U.S. president poking at the nation’s northern neighbor and repeatedly suggesting it would be absorbed as a U.S. state.
Carney visited Trump in May at the White House, where he was polite but firm with Trump. Trump last week traveled to Canada for the G7 summit in Alberta, where Carney said that Canada and the U.S. had set a 30-day deadline for trade talks.
The digital services tax will hit companies including Amazon, Google, Meta, Uber and Airbnb with a 3% levy on revenue from Canadian users. It will apply retroactively, leaving U.S. companies with a $2 billion U.S. bill due at the end of the month.
Canada and the U.S. have been discussing easing a series of steep tariffs Trump imposed on goods from America’s neighbor.
The Republican president earlier told reporters that the U.S. was soon preparing to send letters to different countries, informing them of the new tariff rate his administration would impose on them.
Trump has imposed 50% tariffs on steel and aluminum as well as 25% tariffs on autos. He is also charging a 10% tax on imports from most countries, though he could raise rates on July 9, after the 90-day negotiating period set by him would expire.
Canada and Mexico face separate tariffs of as much as 25% that Trump put into place under the auspices of stopping fentanyl smuggling, though some products are still protected under the 2020 U.S.-Mexico-Canada Agreement signed during Trump’s first term.
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Associated Press writers Will Weissert and Paul Wiseman in Washington and Rob Gillies in Toronto contributed to this report.
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