US stops trade talks with Canada over tech tax

President Donald Trump announced on Friday that the United States is halting all trade discussions with Canada, effective immediately. The decision comes in response to Canada’s new digital services tax, which Trump called a “direct attack” on American tech companies. The tax, set to start on Monday, targets firms like Meta, Apple, Google, Amazon, and Microsoft that earn over $15 million from Canadian internet users.

Trump shared his decision on Truth Social, stating that the U.S. will end trade talks due to Canada’s “unfair” tax. He also promised to announce new tariffs on Canadian goods within the next week. This move has strained relations between the two countries, which share a major trade partnership. Canada is the U.S.’s second-largest trading partner, with a 25% tariff already in place on some Canadian imports under the U.S.-Mexico-Canada Agreement.

Earlier that day, Treasury Secretary Scott Bessent had suggested the U.S. might extend trade deal deadlines to Labor Day, raising hopes for progress. However, Trump’s abrupt decision ended those expectations. Canadian Prime Minister Mark Carney’s office, which had aimed for a new economic and security agreement by mid-July, has not yet commented. The sudden halt has left markets unsteady and raised concerns about future trade tensions.