U.S. President Donald Trump has called an immediate halt to trade talks with Canada to end a tariffs war over a decision by Ottawa to start collecting a digital services tax on American tech giants.
“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,” Trump wrote Friday on his Truth Social site.
“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately. We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period,” Trump added.
Canada’s digital services levy on American digital platforms was introduced last year and was expected to direct $200 million a year into Canadian video and audio programming. And the federal finance department in Ottawa was set to start collecting the tax from foreign tech platforms like Netflix and Amazon Prime from June 30.
The bill for American tech players, which comes from a 3 percent levy imposed on their revenues from doing business in Canada and due on Monday, is retroactive to 2022.
With the major studios and film, TV and music streamers inextricably tied to the Canadian market, the digital services tax was always seen by Ottawa as likely part of a broader negotiations between the U.S. and Canada to set a new trade policy between the two major economic partners.
And compelling local American tech giants to put dollars into homegrown films, TV and music product has long been sought by Canadian content creators. Trump ending talks with Canada follows the U.S. President and Canadian Prime Minister Mark Carney agreeing earlier this month after a G7 Summit in Alberta to pursue negotiations toward a new trade and security deal by mid-July.
