Trade negotiations appear to have taken a downward turn with Canada, with President Trump announcing a termination of “ALL discussions.”

“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 explained.

“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,” he continued.

“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!” he concluded.

Full post below:

More info from The Hill:

Digital services taxes are taxes on tech companies from countries where their products are used. Canada is requiring the first payment of its tech tax on Monday, which will charge 3 percent of revenues above $14.57 million, or 20 million Canadian dollars.

House Republicans’ domestic agenda bill included a retaliatory measure known as Section 899 specifically to ward off countries from instituting digital taxes against U.S. tech giants.

The bill called the taxes “unfair” and “discriminatory” and threatened a retaliatory U.S. tax of up to 20 percent on investors from countries with digital services taxes.

However, following an agreement with the Group of Seven countries with big economies, Treasury Secretary Scott Bessent called on the Senate on Thursday to remove the U.S. retaliatory tax from their version of the bill.

He said that an agreement had been reached that would “[preserve the U.S.] tax base” and that would exempt U.S. companies from a global minimum tax agreement.

Maxime Bernier, the founder of the People’s Party of Canada, claimed the Digital Services Tax went into effect a year ago.

“He wrongly claims that Canada has just announced a Digital Service Tax that would apply to US companies like Meta. That tax actually came into force a year ago. It’s interesting however that he again references tariffs on dairy imports as a reason,” Bernier said.

“As I have said many times, the best way to strike a trade deal with the US would be to get rid of supply management and all these silly taxes that drive up the cost of everything for consumers. WE PAY ENOUGH TAXES! Let’s cut government spending and taxes, and let’s trade freely for everyone’s benefit!” he added.

Trump says he is terminating all trade discussions with Canada!

He wrongly claims that Canada has just announced a Digital Service Tax that would apply to US companies like Meta. That tax actually came into force a year ago.

It’s interesting however that he again references… pic.twitter.com/h6qRO5f0L9

— Maxime Bernier (@MaximeBernier) June 27, 2025

Trump spoke with reporters about trade relations with Canada, saying “we have all the cards.”

“Economically, we have such power over Canada. I’d rather not use it,” he added.

WATCH:

🚨 PRESIDENT TRUMP WARNS CANADA: "We have ALL the cards. We have all. Every single one…economically, we have such power over Canada. I'd rather not use it."

Canada is now trying to put a Europe-style tax on our tech companies.

Trump is defending the USA economy, BIGTIME. pic.twitter.com/iMsFBhZTjv

— Eric Daugherty (@EricLDaugh) June 27, 2025

POLITICO noted:

A White House official said the president was “rightfully” angry. “We had been negotiating with Canada for them to lower their trade barriers, and then they go and erect a brand new one,” said the official, who was granted anonymity to discuss a sensitive issue. “So it’s obviously not helping their case.”

Canada has been working on its Digital Services Tax law since 2021, a process that included extensive public consultations before it came into law over a year ago. The law, which imposes a 3 percent tax on large foreign and domestic digital companies that make over C$20 million in revenue, is expected to come into force on Saturday. It applies to certain Canadian profits that companies make from online advertising, social media, online marketplaces and the sale and licensing of user data.

First payments are due Monday, but because the bill applies retroactively, U.S. companies such as Amazon, Google and Meta could be faced with a bill up to $3 billion, according to the Computer & Communications Industry Association.

Earlier this week, a Canadian official told POLITICO two meetings were scheduled with U.S. officials to discuss a deal. As of Friday afternoon, there was no announcement scheduled regarding the tax.

Trump’s post came as Carney was meeting with his Council on Canada-U.S. Relations. Carney, who texts Trump regularly, said he didn’t speak to Trump on Friday. His office did not get a heads-up that the president was going to call off trade talks, according to a senior government official who was granted anonymity to discuss a sensitive issue.

Carney faced immediate pressure from industry groups that called on him to drop the tax.