PM Carney says Canada will stay at the table despite Trump halting trade talks over digital tax
27 June: Former U.S. President Donald J. Trump has announced the immediate termination of all trade discussions with Canada, following the country’s decision to implement a Digital Services Tax on American technology companies.
In a post on his official Truth Social account Friday afternoon, Trump called Canada a “very difficult country to trade with,” citing long-standing disputes over tariffs as high as 400% on U.S. dairy exports. He accused Canada of copying the European Union, which has implemented similar digital taxes and is currently in separate talks with the U.S. Calling the move a “direct and blatant attack on our Country,” Trump said the U.S. will impose tariffs on Canada within seven days, with details to be announced shortly. “Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,” Trump wrote.
Trump’s latest move throws an already tense trade relationship into further turmoil. Since February, the White House has steadily ramped up tariffs on Canadian steel, aluminum, autos, and other goods. Canada has retaliated with its own counter-tariffs, fuelling an ongoing trade war that has shaken industries and workers on both sides of the border.
Prime Minister Carney, who met privately with his Council on Canada-U.S. Relations earlier Friday, told reporters afterward that he had not yet spoken with Trump since the announcement. The Prime Minister’s Office released a short statement repeating Canada’s intention to keep pushing for an agreement “in the best interests of Canadian workers and businesses.”
In the Oval Office later Friday, Trump initially brushed off questions about Canada while highlighting a peace agreement he was signing for Rwanda and the Democratic Republic of Congo. Pressed further, he labelled Canada a “very difficult country to deal with” and criticized Ottawa for pushing ahead with what he called a “very severe tax” targeting U.S. companies.
“They put a tax on companies that were American companies that they shouldn’t,” Trump said. “And, yeah, I guess they could remove it. They will. But I mean, it doesn’t matter to me. We have all the cards.”
The digital services tax, introduced by the Liberals in the 2021 budget and now set to begin collecting revenue on Monday, imposes a three per cent levy on tech giants earning more than $20 million annually from Canadian users and content. American lawmakers and business leaders have long slammed the policy, calling it unfairly targeted at major U.S. firms. Former U.S. trade representative Katherine Tai previously called it “discriminatory.”
Finance Minister François-Philippe Champagne confirmed last week that Ottawa still intends to proceed, saying “we’re not there at all” when asked whether the government might scrap the tax. He argued the measure is “neutral” and not aimed at any specific country. Foreign Affairs Minister Anita Anand echoed that stance on Friday, insisting Canada will protect its interests behind closed doors while pressing for the removal of “unjustified tariffs.”
Meanwhile, Conservative Leader Pierre Poilievre has not directly criticized the digital tax but urged the government to get trade talks back on track to protect jobs and businesses. He reiterated his party’s position that Canada needs to focus on economic growth measures.
Despite the tense standoff, some industry voices remain cautiously optimistic that this could be another negotiating tactic from Trump rather than the end of the road. As Manley put it, “It’s not a trade negotiation unless somebody throws a tantrum. We’re dealing with Donald Trump, after all.”
The digital services tax is projected by the Parliamentary Budget Officer to raise $7.2 billion over five years — a significant sum the Liberals argue will help fund social programs and ensure big tech pays its fair share.
