US President Trump terminates all discussions on trade with Canada
Washington D.C. – June 27, 2025
In a significant escalation of trade tensions, U.S. President Donald Trump has officially called off all ongoing trade talks with Canada, pointing to the country’s newly introduced Digital Services Tax as a “direct attack on American businesses.”
In a post published on Truth Social Friday morning, President Trump wrote:
Effective immediately, I am terminating ALL discussions on trade with Canada. Their Digital Tax is a disgraceful move against American innovation. Tariff rates for Canadian products will be announced next week.”
What Triggered the Breakdown?
The sudden freeze is a reaction to Canada’s contentious 3% Digital Services Tax, which specifically targets major tech companies like Google, Amazon, and Meta—most of which are based in the U.S. This tax is set to take effect this coming Monday.
The Trump administration sees the tax as discriminatory, arguing that it unfairly punishes American companies that lead the digital market.
“Canada has been a very difficult country to trade with,” Trump added, referencing dairy tariffs as high as 400% that have long been a sticking point in U.S.-Canada trade relations.
What’s at Stake ?
➤ Economic Consequences
This decision could disrupt trade worth over $800 billion annually, impacting sectors like:
Agriculture (especially dairy, grains)
Automotive supply chains
Steel and aluminum
Cross-border tech and e-commerce services
After the announcement, the market reacted swiftly:
The U.S. dollar surged by 0.7% against the Canadian dollar.
We saw some early ups and downs in auto and tech stocks.
Analysts are cautioning that if tariffs are put in place, it could lead to a wider trade shock across North America.
Canada’s Response :
Canadian Prime Minister Mark Carney hasn’t made an official statement yet, but sources within the government indicate that Ottawa is gearing up to file a complaint with the World Trade Organization (WTO) and might even look into imposing retaliatory tariffs.
Carney previously defended the tax, calling it a “necessary measure to ensure fairness in the modern digital economy.”
What Happens Next?
The White House is set to unveil new tariff details in the next week.
Trade experts are speculating about potential U.S. tariffs on Canadian cars, maple syrup, and aluminum.
Canada is expected to rally support from its EU and G7 partners, especially as similar digital tax disputes are heating up around the world.
Expert Insight
“This isn’t just about trade — it’s a powerful move ahead of the election,” said former U.S. Trade Representative Carla Hills.
“Trump is presenting Canada’s move as an attack on America’s tech dominance, which plays well with his base.”
Final Word :
Trump’s sudden choice to halt trade discussions marks a clear shift from negotiation to confrontation.
With Canada being one of America’s biggest trading partners, it now finds itself at the center of a renewed North American trade war.
The next few days will be critical in figuring out if this is just a temporary political tactic or the start of a long-lasting economic struggle.