Washington DC [US], June 28: US President Donald Trump announced on Friday (US local time) that the United States is immediately ending all trade discussions with Canada, citing Canada’s new Digital Services Tax (DST) as a direct attack on American businesses.
In a post on Truth Social, Trump criticized Canada as a “very difficult” trading partner, highlighting longstanding dairy tariffs of up to 400 per cent on US farmers. He claimed Canada’s newly introduced DST targets American technology companies unfairly, mirroring similar measures by the European Union.
“We have just been informed that Canada, a very difficult Country to TRADE with… 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 wrote.
The Canadian Revenue Agency has clarified that the DST requires large domestic and foreign companies to pay taxes on certain online revenues if they meet specific conditions. The tax will apply retroactively to 2022, with first payments due starting Monday.
Trump stated that within seven days, Canada will be informed of the new tariffs it will face for doing business with the United States, emphasizing the administration’s firm stance against what he called an “egregious” tax.
CNN noted that DSTs disproportionately impact US tech giants like Meta, Apple, Google, Amazon, and Microsoft. The Congressional Research Service has previously flagged DSTs as “non-tariff trade barriers,” and Trump has repeatedly raised the issue in trade talks with other countries.
According to The New York Times, Canada’s 3 per cent DST technically took effect last year, but companies were preparing to pay nearly USD 2.7 billion retroactively beginning this week.