Sat Jun 28 01:20:11 UTC 2025: ## Trump Abruptly Halts Trade Talks with Canada Over Digital Tax, While Reaching Framework Deal with China
**Washington, June 28, 2025 (The Hindu)** – In a dramatic shift in international trade relations, President Donald Trump has announced the immediate termination of all trade discussions with Canada. The move comes in direct response to Canada’s digital services tax, a 3% levy on large multinational tech companies like Alphabet, Amazon, and Meta, impacting U.S. firms.
“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,” President Trump stated on his Truth Social platform on Friday. He added that Ottawa will be informed of new U.S. tariff rates within the week.
The Canadian government, led by Prime Minister Mark Carney, responded by stating its commitment to conducting negotiations in the best interest of Canadians. They will adjust the 25% counter-tariffs on U.S. steel and aluminium imposed in response to a doubling of U.S. levies on those metals, if a bilateral trade deal is not reached in the next 30 days.
U.S. Treasury Secretary Scott Bessent expressed Washington’s disappointment that Canada did not halt the tax “as a sign of goodwill.” He indicated that the U.S. Trade Representative will initiate a probe into the economic harm caused by Canada’s digital tax.
The announcement of the trade halt with Canada occurred shortly after Washington and Beijing confirmed a framework agreement to move forward on trade. A key priority for the U.S. in these negotiations was ensuring the supply of rare earths, essential components for various industries, including electric vehicles and national defense. China has committed to easing some non-tariff measures and will review export applications for controlled items. In return, the U.S. will cancel a series of restrictive measures against China.
Despite the positive development with China, uncertainty remains regarding trade with other nations. Dozens of economies face a deadline of July 9 for steep tariff increases. U.S. Treasury Secretary Bessent indicated that Washington aims to finalize trade deals with 10 to 12 of its 18 key partners by Labor Day (September 1).
Wall Street’s major indexes reached new records, as markets reacted positively to the progress in U.S.-China trade, seemingly dismissing the concerns surrounding the situation with Canada.
First Piper 