Trump Pulls Plug on Canada Trade Talks Over Digital Services Tax Dispute
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Washington’s tariff war with Ottawa took a stark turn Friday when President Donald Trump declared an immediate halt to all trade talks, branding Canada’s three-per-cent digital services tax “a direct and blatant attack” on U.S. tech giants. The surprise Truth Social post lands just weeks after the two leaders left the Kananaskis G7 vowing to craft a new trade-and-security pact by mid-July. Now, instead of a framework, Canada faces a fresh tariff timetable that Trump says will arrive “within the next seven days.”
Prime Minister Mark Carney convened his Council on Canada-U.S. Relations behind closed doors but offered little daylight afterward, insisting Ottawa will “continue to engage in these complex negotiations in the best interests of Canadian workers and businesses.” Finance Minister François-Philippe Champagne, meanwhile, doubled down on the levy—first floated in the 2021 budget—calling it a neutral measure that simply ensures foreign digital platforms pay their share. Critics counter that the retroactive tax, set for its first payment Monday, singles out Silicon Valley and hands Trump the perfect bargaining chip.
Business groups and former cabinet heavyweights warn the gambit could backfire. Ex-finance minister John Manley urged Ottawa to treat the levy as expendable, but only in exchange for meaningful concessions on Trump’s stacking tariffs. Until then, Canada’s negotiators are left to parse the president’s latest move—tantrum or tactic—and brace for the tariff list that could arrive before the ink is dry on next week’s invoices.
