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President Donald Trump has halted all trade talks with Canada over its newly implemented Digital Services Tax, which targets major US technology companies.
Some shit you should know before you read: If you’re unaware, Canada implemented a Digital Services Tax (DST) that imposes a 3% tax on revenues earned by large technology companies from digital services provided to Canadian users. The tax applies to companies generating more than $14.6 million in such revenue annually and is being applied retroactively from January 1, 2022, with collections starting June 30, 2025. The tax will significantly impact companies like Amazon, Google, Meta, X, and Airbnb.
What’s going on now: Shortly after the Digital Services Tax was enacted, President Donald Trump announced the immediate suspension of all trade negotiations with Canada. In a post on Truth Social, Trump declared, “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.”
He added, “We’re going to stop all negotiations with Canada right now until they straighten out their act.” When asked if there was anything Canada could do to resolve the impasse, Trump responded bluntly: “They will. They do most of their business with us. When you have that circumstance, you treat people better.”
Treasury Secretary Scott Bessent also alluded to the possibility that tariffs could be coming for Canada, telling CNBC, “If the Canadian government moves forward with the tax, Trump is prepared to impose higher tariffs across all Canadian goods.”
This all comes as Canadian Foreign Affairs Minister Anita Anand said, “Despite Trump’s threats, Canada will push ahead with trying to broker a deal that’s in the best interest of workers and businesses, while at the same time ensuring we diversify our supply chains so we are never again dependent on one economy.”
