Tensions between the United States and Canada have flared once again after President Donald Trump acc:used Canada of launching a “blatant att.ack.”
Canadian Prime Minister Mark Carney, 60, who achieved a surprising election victory in April, had maintained relatively calm relations with the 79-year-old Republican president, partly due to Trump’s respect for Carney’s background as a former banker.
However, a new tax measure has thrown that delicate balance into turmoil.
At the center of the dispute is Canada’s decision to impose a 3% digital services tax on companies like Amazon, Google, Meta, Uber, and Airbnb, retroactively dating back to 2022.
According to NBC News, this move leaves major U.S. tech firms facing a $2 billion payment due by the end of the month.
The tax targets revenue earned from Canadian users if that revenue surpasses $14.6 million in a calendar year.
Reacting on June 27 on Truth Social, Trump wrote angrily:
“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.
“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.
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!”
Prime Minister Carney was soon questioned about Trump’s comments and responded sharply
“We’ll continue to conduct these complex negotiations in the best interests of Canadians.”
Trump did not stop there. Speaking to reporters later in the Oval Office, he warned:
“Economically we have such power over Canada. We’d rather not use it. It’s not going to work out well for Canada. They were foolish to do it,” according to the Independent.
When asked if Canada could do anything to restart trade negotiations, Trump suggested they could remove the tax, saying he expected them to, but added, “It doesn’t matter to me.”
His remarks followed a recent letter from a group of House lawmakers who had urged him to act quickly against what they called an “unprecedented, retroactive tax” by Canada, arguing it would create a harmful precedent for global tax and trade norms.
“Allowing Canada to proceed with this unprecedented, retroactive tax on U.S. firms would send a signal to the rest of the world that they have the green light to proceed with similar discriminatory cash grabs targeting our firms, workers, and tax base,” they wrote.
Even though trade between the U.S. and Canada amounted to approximately $762 billion last year, according to the Guardian, Canada is still one of America’s largest trading partners — making Trump’s abrupt halt to trade talks a significant disruption.
In that same Oval Office appearance, Trump also aimed Europe’s proposed digital taxes, declaring:
“They have been unbelievably bad to us. If you look at past presidents, they’ve treated them very badly. They’re being very nice to me, because I get it. I know the system, and we have the cards. We have the cards far more than they do, and they have not treated us well, and they’re coming to us right now.”
He added:
“They’re nasty people, and I don’t want them affecting U.S. companies. I don’t want that — if anybody’s going to affect a U.S. company, I want it to be us, and if they’re going to have to pay a penalty or fine, let it be to us.”
