Trade tensions flare: Trump halts negotiations with Canada over digital tax dispute

In a surprise move, U.S. President Donald Trump announced the immediate suspension of trade talks with Canada, escalating tensions between the two countries.

“Canada is a very difficult country to trade with,” Trump said, citing longstanding grievances over tariffs on U.S. agricultural products. “For years, they’ve imposed tariffs of up to 400% on our dairy exports.”

The announcement comes in response to Ottawa’s decision to impose a digital services tax on major American tech firms — a measure Trump slammed as “a direct and clear attack on our country.” The U.S. president accused Canada of copying the European Union, which has implemented similar digital taxation policies.

“As a result of this exorbitant tax, we are ending all trade discussions with Canada effective immediately,” Trump stated. He added that within the next seven days, the White House will inform the Canadian government of new tariffs to be applied on Canadian goods.

The move casts fresh uncertainty over global trade dynamics, just as markets had begun to stabilize following positive developments in U.S.-EU negotiations and recent progress with China on rare earth exports.