Donald Trump has reignited a fresh trade war with Canada after it imposed a digital service tax on American tech firms.
Less than two weeks after his G7 love-in with Prime Minister Mark Carney and other world leaders, Trump announced on Friday that he was immediately “terminating ALL discussions on Trade with Canada” and accused the country of a “blatant attack” on the U.S.
He added that he would announce new tariffs against Canada within the next week.
“We have just been informed that Canada, a very difficult Country to TRADE with … 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 in a Truth Social post.
“They are obviously copying the European Union, which has done the same thing. 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!”
The president’s declaration threatens America’s trade relationship with its northern ally and a key global trading partner.
But questions remain as to whether Trump will go through with the plan, given his tendency to backtrack on threats, which has earned him the nickname “TACO”: Trump Always Chickens Out.
In March, for example, after talking tough on trade, Trump granted a one-month exemption on new tariffs impacting goods from Mexico and Canada for U.S. automakers.
He also postponed 25% tariffs on many imports from Mexico and some imports from Canada for one month, and lowered the tariff rate on potash provided the goods were compliant with the United States-Mexico-Canada Agreement.
The Daily Beast has reached out to Carney’s office for a response to the latest salvo.
It comes after the Canadian Prime Minister privately courted Trump in the weeks leading up to the G7 summit, calling and texting Trump and his allies to ease past tensions between the two countries.
Those tensions ignited earlier this year, when Trump repeatedly called for Canada to become America’s 51st state.
This is pure stupidity pic.twitter.com/Oh6nwSsGOG
— Rep. Steven Horsford (@RepHorsford) June 27, 2025
“It’s not for sale,” a defiant Carney told Trump during an Oval Office meeting in May. “Won’t be for sale, ever.”
Canada’s Digital Services Tax imposes a 3% tax on large foreign and domestic digital companies that make over $20 million (Canadian dollars) in revenue. It is expected to come into force on Saturday.
But Trump’s decision to suspend the trade tax has been criticized by some.
“This is pure stupidity,” said Nevada Democrat Congressman Steven Horsford.
The post Trump Shoves Canada Out in the Cold in New Trade Freeze appeared first on The Daily Beast.
