Canada’s Prime Minister Mark Carney appeared unshaken, saying, “We will continue to conduct these complex negotiations in the best interest of Canadians

By Titilope Adako

US President Donald Trump has abruptly ended trade negotiations with Canada, citing a “grossly unfair” digital services tax imposed by the Canadian government.

In a social media post on Friday, Trump said, “We are hereby terminating ALL discussions on Trade with Canada, effective immediately,” adding that new tariffs on Canadian goods would be announced within a week.

The move comes as both countries were working toward a trade agreement by mid-July.

However, tensions have escalated following Canada’s implementation of a 3% tax on large tech companies, which is expected to cost American firms like Amazon, Apple, and Google over $2 billion annually. The first payments are due Monday.

Canada’s Prime Minister Mark Carney appeared unshaken, saying, “We will continue to conduct these complex negotiations in the best interest of Canadians.”

Despite their meeting at the White House in May, Trump’s latest action casts doubt on the future of the trade deal. He has previously used public threats to pressure negotiating partners, with varying outcomes.

Business groups on both sides of the border have voiced concerns. Candace Laing, head of the Canadian Chamber of Commerce, warned of “last-minute surprises” but expressed hope for progress, noting a recent improvement in talks.

Trade expert Inu Malak from the Council on Foreign Relations said Trump’s move appears to be a pressure tactic but could ironically “open space” for a quicker resolution, though likely not on Canada’s preferred terms.

The US remains Canada’s largest trading partner, with over $400 billion in goods exchanged last year.

However, the relationship has been strained by US tariffs on cars, steel, and aluminium, and Canada has retaliated with levies of its own.

Markets initially dipped after Trump’s announcement but later recovered, with the S&P 500 closing at a record high.

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