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By Gabe Whisnant and Sonam Sheth
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President Donald Trump said Friday that the United States will cut off all trade talks with Canada, "effective immediately."
The Context
The president's announcement came after Canada confirmed that it will move forward with its digital services tax on technology giants, most of which are headquartered in the U.S., despite a G7 agreement in which the Trump administration agreed to axe a "revenge tax" proposal targeting foreign investments from the sweeping tax bill Congress is considering.
Read More on Politics
Canada's Finance Department said Friday that the first U.S. payment for Canada's digital tax is still due on Monday. The digital services tax will hit companies like Amazon, Google, Meta, Uber and Airbnb with a 3 percent levy on revenue from Canadian users. It will apply retroactively, leaving U.S. companies with a $2 billion bill due at the end of the month.
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What To Know
"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," Trump posted on Truth Social on Friday.
"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. 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!"
Earlier Friday, the president told reporters at the White House that the U.S. will send letters to some countries, letting them know their new individual tariff rates.
Tensions between the U.S. and Canada were strained during Trump's first presidency but reached a boiling point after he took office this year.
Since January, he has repeatedly lobbed attacks at Canada, one of the U.S.'s staunchest allies and among its biggest trading partners, accusing it of taking advantage of the U.S. and saying it should become the 51st state.
Trump's taunts sparked immediate blowback from then Canadian Prime Minister Justin Trudeau, as well as Trudeau's successor, Mark Carney, who was elected to office after running on an anti-Trump, anti-isolationist platform.
Carney made headlines when he visited the White House in May and told Trump Canada was "not for sale." Trump replied: "Time will tell."
What People Are Saying
Canadian Prime Minister Mark Carney said Friday: Canada will "continue to conduct these complex negotiations in the best interests of Canadians. It's a negotiation."
Trump said in the Oval Office that he expects Canada to lift the digital services tax: "Economically we have such power over Canada. We'd rather not use it. It's not going to work out well for Canada. They were foolish to do it."
Reporting from the Associated Press contributed to this story.
Update 6/27/25, 6:00 p.m. ET: This story has been updated with additional information and context.
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