President Donald Trump has suddenly ended trade talks with Canada, pointing to a new tax on big tech companies as the key issue. He described the digital services tax as unfair and harmful to the U.S. economy.
Trump also warned that new tariffs on Canadian goods will be introduced soon.
Despite this unexpected decision, Canadian Prime Minister Mark Carney stressed that talks will carry on, underlining the need to address challenges and safeguard both nations’ economic well-being.
U.S.-Canada Trade Clash Escalates
Trade relations between the U.S. and Canada are worsening. Both countries have added tariffs on each other’s goods.
The U.S. targeted cars and raw materials, citing issues like drug smuggling and unfair trade. Canada responded with taxes on American products.
While such actions happened before, Trump’s decision to end talks marks a serious change. Experts warn this could disrupt businesses that rely on cross-border cooperation.
Although the two countries have traded well in the past, the current tone is more hostile.
Canada’s Big Tech Tax Sparks U.S. Tariff Threat
Canada’s digital services tax has caused strong U.S. criticism, especially since it affects big American tech firms. The tax aims to ensure companies pay fairly where they operate. U.S. officials say the tax is unfair and targets their firms disproportionately.
Treasury Secretary Scott Bessent expressed frustration that Canada moved forward with this tax during ongoing trade talks.
Business groups in both countries worry this tax could harm economic cooperation. However, some believe this issue might push both sides to resume talks and reach a compromise.