President Donald Trump said Friday that he would cut off all trade negotiations with Canada and institute a new tariff rate on it within the next week.
Trump’s threat came after Canada announced that it would maintain its digital service taxes on U.S. companies.
“We have just been informed that Canada, a very difficult Country to TRADE with, including the fact that they have charged our Farmers as much as 400% Tariffs, for years, on Dairy Products, 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 said Friday afternoon on Truth Social.
“They are obviously copying the European Union, which has done the same thing, and is currently under discussion with us, also. Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,” he continued. “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. Thank you for your attention to this matter!”
Trump directly inflamed tensions with Canada upon entering office, slapping a 25% tariff on Canada and Mexico ahead of his April “Liberation Day” announcement and repeatedly threatening to annex Canada and make it the 51st state.
White House officials declined to comment or provide additional details regarding Trump’s announcement on Friday.
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On Thursday, Treasury Secretary Scott Bessent announced that the United States and the other G7 countries agreed to exempt U.S. companies from certain taxes outlined by the Organisation for Economic Co-operation and Development in exchange for dropping a “revenge tax” provision included in Trump’s tax and spending reconciliation legislation, which is still working its way through Congress.
However, Canada’s Finance Department said Friday that its DSTs for all U.S. companies are still due this coming Monday.