Trump halts trade talks with Canada over tax policy
Donald Trump has officially and uncompromisingly announced a pause in all trade talks with Canada in response to the country’s introduction of a digital services tax, which the American leader said was a direct attack on US interests. He made the announcement via his personal Truth Social platform, sparking widespread debate and long-term concern in trade circles. In his post, Trump stressed that the decision to halt talks would take effect immediately, and that within the next seven days the United States would notify Canada of the new tariffs its companies would have to pay to do business in the US market. This radical reaction was in response to Canada’s introduction of a digital services tax, which is 3% of revenue generated by Canadian users over 20 million Canadian dollars or more, or about 14.6 million dollars. This tax regime will be a major blow to American IT companies, which are mostly of American origin, and is aimed at increasing their payment in the Canadian digital space. In turn, Canada has previously expressed concerns about the potential change or abolition of this tax as part of trade negotiations with the United States. Finance Minister François-Philippe Champagne hinted that a review of tax policy on digital services could occur, possibly in the context of trade discussions between the two countries. This has caused additional concern in the business community and increased tensions between the two neighbors. Earlier on Friday, Trump said that his administration would soon disseminate information about new trade tariffs for countries with which a customs regime has already been introduced - except for Canada and Mexico. Although the US is already engaged in separate negotiations with these two countries over the fentanyl trade and migration issues, the relevant reports emphasized that the new tariffs will not affect Canada and Mexico, since the issue of their trade is being resolved in a different way. Obviously, these steps are of a strategic nature and emphasize how tense the situation is in the bilateral relations between the US and Canada over trade and digital issues. At the same time, the neighboring country is still in the spotlight of the American administration, which continues to plan to act harshly against any manifestations of trade policy that could harm US interests. The question remains to what extent this sharp confrontation will affect future negotiations and economic ties between the two nations, as disputes over taxes and tariffs have become one of the key ones in modern international relations.