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Trump cuts off US trade talks with Canada, shattering optimism over tariff deals
Published by Global Banking & Finance Review®
Posted on June 27, 2025
2 min readLast updated: January 23, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on June 27, 2025
2 min readLast updated: January 23, 2026
Trump stops US-Canada trade talks due to Canada's new tax on US tech firms, with new tariffs on Canadian goods expected soon, straining relations.
By David Lawder, Susan Heavey and Manoj Kumar
WASHINGTON (Reuters) -U.S. President Donald Trump on Friday abruptly cut off trade talks with Canada over its new tax targeting U.S. technology firms, calling it a "blatant attack" and saying that he would set a new tariff rate on Canadian goods within the next week.
The move, which plunges U.S. relations with its second-largest trading partner back into chaos after a period of relative calm, came just hours after Trump's Treasury secretary, Scott Bessent, struck an upbeat tone on trade.
It also follows a June 19 announcement by Canadian Finance Minister Francois-Philippe Champagne that Canada would not pause its longstanding plans to implement a digital services tax starting June 30 on U.S. technology firms including Amazon, Meta, Google and Apple, among others.
Trump, in a post on his Truth Social media platform, called the tax "a direct and blatant attack on our country" and said Canada was a "very difficult country to TRADE with."
"Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately," Trump said. "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."
Canada is the second-largest U.S. trading partner after Mexico, buying $349.4 billion of U.S. goods last year and exporting $412.7 billion to the U.S., according to U.S. Census Bureau data.
Canadian Prime Minister Mark Carney said on June 16 he had agreed with Trump that their two nations should try to wrap up a new economic and security deal within 30 days.
Earlier on Friday, Bessent said the Trump administration's various trade deals with other countries could be done by the Sept. 1 Labor Day holiday, citing talks with 18 top trade partners and another revision to a deal with China to reopen the flow of rare earth minerals and magnets.
(Reporting by Susan Heavey and Doina Chiacu; Editing by William Maclean and Sandra Maler)
Trump cut off trade talks due to Canada's new tax targeting U.S. technology firms, which he called a 'blatant attack' on the U.S.
Canadian Finance Minister Francois-Philippe Champagne announced that Canada would proceed with its digital services tax, which was set to start on June 30.
Canada is the second-largest trading partner for the U.S., with $349.4 billion in U.S. goods purchased last year and $412.7 billion exported to the U.S.
Trump stated that based on the new tax, he was terminating all discussions on trade with Canada, effective immediately.
Canadian Prime Minister Mark Carney had agreed with Trump to try to finalize a new economic and security deal within 30 days prior to the trade talks being cut off.
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