Trump says U.S. will cease trade negotiations with Canada
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Canadian Prime Minister Mark Carney and President Trump in the Oval Office. Photo: Anna Moneymaker/Getty Images
President Trump said on Friday that the U.S. would terminate trade discussions with Canada and assign a tariff rate on Canadian goods within the next week.
Why it matters: It is a fresh blow to the U.S.-Canadian economic relationship, which has come under historic strain since Trump took office.
What they're saying: In a post on Truth Social, Trump said "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," Trump wrote.
State of play: Trump pointed to Canada's digital services tax on U.S. tech firms as the driver of the breakdown.
- Treasury Secretary Scott Bessent told CNBC on Friday that he expects the U.S. Trade Representative will open an investigation into the tax — a procedure that could lead to further restrictions or tariffs on Canadian goods.
Reality check: Payments related to Canada's Digital Services Tax are due on Monday. Business and tech groups have been pressing the Trump administration to push Canada to delay the payment date, or to renegotiate the policy together as part of broader trade talks.
- "We were hoping that as a sign of goodwill that the new [Mark] Carney administration would at least put a brake on that during the trade talks," Bessent said.
The intrigue: The cut-off in trade talks comes less than two weeks before the "Liberation Day" tariff pause for a slew of nations is set to expire, though Bessent said on Friday that deadline could be extended — possibly to Labor Day.
- Instead of trade deals, top White House officials have previously suggested that the administration will simply tell certain nations what the tariff rate will be.
What to watch: Digital service taxes, which seek to make Big Tech companies pay a share of their revenue for costs related to using them in different countries, have grown increasingly popular globally.
- The UK's own digital service tax was able to go into effect without impacting the UK-US trade deal.
- Some European countries have implemented or proposed DSTs.
Editor's note: This story has been updated with comments by Treasury Secretary Scott Bessent.
