President Trump delivered an unexpected blow to trade relations with Canada on Friday, declaring that he would be halting all negotiations in response to Canada’s decision to implement a tax targeting American tech giants.
“We have just been informed that Canada … 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 posted on Truth Social.
He accused Canada of mimicking policies from across the Atlantic: “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.”
Trump also warned that economic repercussions were on the way. “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!”
The Canadian government has committed to instituting a 3% tax on digital revenues earned by large-scale platforms such as Facebook and Google. The proposed levy would be retroactively applied to earnings going back to 2022 and would only affect companies that generate over $14.6 million annually.
It remains unclear how Trump’s order will immediately impact existing trade structures, since the United States-Mexico-Canada Agreement (USMCA) continues to govern the overall commercial relationship between the two nations.
Still, the announcement rippled through financial markets, prompting a decline in tech-related stocks on Wall Street. However, despite the dip, broader indices remained on track for a positive weekly close.
Trump has previously warned the European Union of facing a steep 50% tariff in retaliation for its own digital tax plans, though he postponed enforcement until July 9 to allow room for dialogue.
{Matzav.com}