President Trump announced Friday that the United States is ending all trade negotiations with Canada and will impose a new tariff rate on Canadian goods within the next week. The move marks a significant escalation in U.S.-Canada economic tensions, which have steadily worsened during Trump’s time in office.
Posting on Truth Social, Trump declared, “We are hereby terminating ALL discussions on Trade with Canada, effective immediately,” and added that Canada will be informed of the tariff amount they will have to pay within seven days to continue doing business with the U.S.
The decision follows rising friction over Canada’s Digital Services Tax (DST), which targets large U.S. tech firms. Treasury Secretary Scott Bessent said on CNBC that the U.S. Trade Representative is expected to launch a formal investigation into Canada’s DST, a process that could lead to further trade penalties.
The timing is notable: Canada’s first payments under the DST are due Monday, and U.S. tech and business groups had been lobbying the Trump administration to delay enforcement or seek a compromise through ongoing trade talks. Bessent said the U.S. had hoped that Canada’s new leadership under Prime Minister Mark Carney would show goodwill by pausing implementation during negotiations.
The suspension of trade talks also comes just before the expiration of the so-called “Liberation Day” tariff relief for several countries. While Bessent suggested the administration might extend that deadline possibly until Labor Day the U.S. appears ready to shift away from negotiated agreements and instead unilaterally set tariffs for countries on a case-by-case basis.
Globally, digital service taxes are gaining traction as governments seek to ensure Big Tech pays for access to their markets. The UK implemented its DST without disrupting its trade agreement with the U.S., and several European nations have either enacted or proposed similar taxes.
