In a big move, U.S. President Donald Trump has ended trade talks with Canada. The reason? Canada introduced a new tax on big U.S. tech companies like Apple, Google, Microsoft, Amazon, and others.
Trump announced this decision on his social media platform, Truth Social. He said Canada’s new 3% digital services tax is a “direct and unfair attack” on American tech businesses. Trump also said Canada is a “very difficult country to trade with.”
This tax applies to online companies that earn money from Canadian users — including Canadian and foreign businesses. It includes platforms like Google, Meta, Uber, and Airbnb. The new rule will charge 3% of their revenue made in Canada and will be applied retroactively, meaning companies have to pay for past earnings too. The total retroactive amount is expected to be around $2 billion USD, due by the end of this month.
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Trump responded strongly and promised to impose new tariffs (extra taxes) on Canadian products within the next week. However, he hasn’t shared the details yet.
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Canada’s Finance Minister, Francois-Philippe Champagne, confirmed that the tax would go ahead despite pushback from the U.S. and Silicon Valley.
The news caused an immediate reaction in the financial market — the Canadian dollar fell by 0.7% compared to the U.S. dollar. Many experts worry this fight could hurt the close economic relationship between the U.S. and Canada and lead to more trade issues in the future.
