U.S. President Trump Cuts Trade Talks with Canada

By David Lawder, Susan Heavey and Manoj Kumar

WASHINGTON (Reuters) – U.S. President Donald Trump abruptly cut off trade talks with Canada over its new tax aimed at U.S. technology firms, labeling it a “blatant attack.” Trump announced that he would set a new tariff rate on Canadian goods within a week.

This decision has pushed U.S.-Canada relations, the second-largest trading partnership, back into turmoil after a period of relative calm. This action came just hours after Treasury Secretary Scott Bessent expressed optimism regarding trade.

The move also follows Canada’s announcement, made by Finance Minister Francois-Philippe Champagne on June 19, about implementing a digital services tax affecting tech giants like Amazon, Meta, Google, and Apple, starting June 30.

Trump referred to the tax as “a direct and blatant attack on our country” and criticized Canada as a “very difficult country to TRADE with.” He announced, “Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately.” He stated that Canada would soon be informed of the tariffs applicable to doing business with the U.S.

Canada had been the U.S.’s second-largest trading partner after Mexico, purchasing $349.4 billion in U.S. goods last year and exporting $412.7 billion.

Earlier on June 16, Canadian Prime Minister Mark Carney mentioned an agreement with Trump to finalize a new economic and security deal in 30 days. On the same day, Bessent noted that the Trump administration aimed to complete various trade deals with other nations by the Labor Day holiday, including revisions to a deal with China regarding rare earth minerals and magnets.