Trump ends trade talks with Canada over ‘Egregious’ tech tax

Washington: US President Donald Trump has announced an immediate suspension of trade negotiations with Canada following its decision to proceed with a digital services tax affecting major American technology companies.

In a post shared on his social media network on Friday, Trump declared that Canada had notified the United States of its intention to implement the controversial tax beginning Monday. Reacting sharply, Trump condemned the move.

“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 stated.

Digital tax targets tech giants

Canada's digital services tax targets both Canadian and international companies earning revenue from online users in Canada. The 3% levy is set to impact major US-based firms such as Amazon, Google, Meta, Uber, and Airbnb.

Notably, the tax is also retroactive, with American companies reportedly facing a $2 billion USD bill payable by the end of the month.

Talks on broader tariff reductions in jeopardy

The move to suspend trade talks comes amid ongoing efforts by Canada and the US to resolve a broader range of steep tariffs previously imposed during Trump's presidency.

Earlier, the Republican leader told reporters that the US was preparing to issue formal letters to various countries, informing them of updated tariff rates his administration intended to impose.

AP inputs