Trump ends trade talks with Canada, vows new tariffs

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2 days ago

US President, Donald Trump announced Friday that he is terminating trade talks with Canada and will soon impose a new tariff on the country.

The move, made public via a Truth Social post, follows Canada’s rollout of a digital services tax (DST), which Trump described as “a direct and blatant attack on our Country.”

He wrote, “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.”

Canada’s DST, which is set to take effect on Monday and apply retroactively to 2022, targets revenue from digital services rather than physical goods.

It affects large online platforms—many of them US-based—including Meta, Apple, Google, Amazon, and Microsoft.

A nonpartisan Congressional Research Service report noted that DSTs disproportionately impact American tech giants.

Trump has long criticized such taxes, calling them “non-tariff trade barriers” during negotiations with several countries.

Canadian businesses and trade associations have warned the government that the new tax could trigger serious trade fallout with the US.

Canada remains the largest buyer of American goods, importing $349 billion worth last year. It exported $413 billion in goods to the US, ranking as America’s third-largest source of imports.

Experts say a new wave of tariffs would likely lead to retaliation by Canada, potentially damaging both economies.

Prime Minister Mark Carney’s office told CNN that his government is considering its response.

Earlier in his second term, Trump threatened to impose a blanket 25% tariff on all Canadian exports. So far, most Canadian goods have remained exempt under the United States-Mexico-Canada Agreement (USMCA), negotiated during Trump’s first term.

However, Canada has not been spared entirely. A 25% tariff remains in place on foreign cars, car parts, steel, and aluminum.

Trump later doubled those tariffs to 50% for steel and aluminum imports.

Canadian exports not compliant with USMCA have faced the full 50% rate.

Canada hit back with a 25% tariff on US vehicles that fall outside USMCA rules. It also retaliated against earlier steel and aluminum tariffs with duties on about $43 billion worth of US goods, including whiskey, sporting goods, and appliances.

Trump’s announcement triggered a quick reaction on Wall Street. The Dow, which had climbed as much as 580 points earlier Friday, closed up only 191 points (0.4%). The S&P 500 slipped 0.06% after nearing a record high, while the Nasdaq fell 0.2%.