Former President Donald Trump announced a sudden end to trade negotiations with Canada, citing the country’s new digital services tax on U.S. tech firms. He described the move as “egregious” and accused Canada of mimicking the European Union’s approach, which is also under U.S. review.
In a statement on Truth Social, Trump declared that all trade talks with Canada were “terminated immediately” and that his administration would inform Canada within seven days about new tariffs for doing business with the U.S. He also criticized Canada’s existing tariffs on U.S. dairy exports, claiming they reach up to 400%.
Following the announcement, the U.S. dollar rose 0.7% against the Canadian dollar, while stock markets reacted negatively. The S&P 500, which had hit a record high earlier in the day, gave up some of its gains after the trade news broke.
Canada’s digital services tax, introduced in June 2024, imposes a 3% levy on revenues earned from digital activity in the country by large companies, including foreign-based firms. The tax has drawn criticism from U.S. officials, leading to this sharp response from Trump.