WASHINGTON – President Donald Trump said on Friday he was calling off trade negotiations with Canada in retaliation for taxes impacting US tech firms, adding that Ottawa will learn of their new tariff rate within a week. 

Trump was referring to Canada’s digital services tax, which was passed last year and forecast to bring in Can$5.9 billion (US$4.2 billion) over five years. While the measure is not new, US service providers will be “on the hook for a multi-billion dollar payment in Canada” come 30 June, noted the Computer & Communications Industry Association recently. 

The 3% tax applies to large or multinational companies such as Alphabet, Amazon and Meta that provide digital services to Canadians, and Washington has previously requested dispute settlement talks over the matter. 

“Based on this egregious tax, we are hereby terminating all discussions on trade with Canada, effective immediately,” Trump wrote in a post on his Truth Social platform on Friday. 

Canada may have been spared some of Trump’s sweeping duties, but it faces a separate tariff regime. Trump has also imposed steep levies on imports of steel, aluminium and autos. 

Last week, Canadian Prime Minister Mark Carney said Ottawa will adjust its 25% counter tariffs on US steel and aluminum – in response to a doubling of US levies on the metals to 50% – if a bilateral trade deal was not reached in 30 days. 

“We will continue to conduct these complex negotiations in the best interest of Canadians,” Carney said on Friday, adding that he had not spoken to Trump on the day. 

US treasury secretary Scott Bessent told CNBC that Washington had hoped Carney’s government would halt the tax “as a sign of goodwill.” 

He now expects US trade representative Jamieson Greer to start a probe to determine the harm stemming from Canada’s digital tax. 

– Nampa/AFP