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Donald Trump said the US was “terminating” trade talks with Canada in retaliation against a new digital services tax on tech companies, reopening a trade war between the countries after months of détente.
“We have just been informed that Canada, a very difficult Country to TRADE with . . . has just announced that they are putting a Digital Services Tax on our American Technology Companies, which is a direct and blatant attack on our Country,” the US president posted on his Truth Social platform.
“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,” Trump said, adding that he would set a new tariff rate on Canadian imports “within the next seven day period”.
His announcement reignites a trade war with the US’s northern neighbour, ending a period of more cordial relations that followed the election of Mark Carney as Canadian prime minister.
Canadian finance minister François-Philippe Champagne indicated last week that Ottawa would proceed with plans to impose a digital services tax despite pressure from the US to abandon it.
The measure would hit tech groups with a 3 per cent levy on revenue earned from Canadian users, and has been opposed by Silicon Valley.
The Canadian dollar fell on the announcement, leaving it down 0.7 per cent against the US dollar on the day.
This is a developing story
