Trump halts Canada trade talks over digital services tax on Big Tech

President Trump announced on Fox News Jun. 29, 2025, that trade talks with Canada were 'stopped until they drop certain taxes,' specifically targeting Canada's digital services tax on U.S. tech companies.

Trump threatened new tariffs within seven days while his global tariff moratorium expires Jul. 9, 2025, potentially triggering 25-50% tariffs on imports from dozens of countries.

Canada's digital services tax targets large tech companies' revenues from Canadian users, affecting Google, Apple, Meta, and Amazon with a 3% levy that would have generated $2 billion in retroactive payments.

The U.S. currently applies 25% 'fentanyl' tariffs on most imports from Canada and Mexico under trade authorities Congress delegated to the executive branch.

Prime Minister MCMark Carney responded that Canada would 'continue to conduct complex negotiations in the best interests of Canadian workers and businesses' despite Trump's ultimatum.

Canada rescinded the digital services tax on Jun. 30, 2025, with Finance Minister FCFrançois-Philippe Champagne announcing legislation to repeal the Digital Services Tax Act entirely.

Trump and Carney resumed trade negotiations after a phone call Jun. 30, agreeing to work toward a Jul. 21 deadline set at the G7 Leaders' Summit in Kananaskis.

The U.S.-Mexico-Canada Agreement governs current trade relations among the three countries, having replaced NAFTA in 2020 with built-in review mechanisms and dispute settlement procedures.