Sat Jun 28 11:41:31 UTC 2025: **Summary:**

President Trump is escalating trade tensions with Canada over its new Digital Services Tax Act (DSTA), which imposes a 3% levy on revenues of large tech companies with global and Canadian revenue thresholds. Trump views the tax as an attack on US tech companies and has threatened to impose new tariffs on Canadian exports and terminate all trade discussions. This move marks a sharp reversal from a more cooperative period and threatens to disrupt the significant bilateral trade relationship between the two countries. The DSTA targets digital service revenues from Canadian users, including online marketplaces, social media platforms, digital advertising, and user data sales. The US government has opposed these taxes, leading to potential punitive measures. Canada maintains that it will continue to engage in trade negotiations in the best interests of Canadian workers and businesses.

**News Article:**

**Trump Threatens Tariffs, Ends Trade Talks with Canada Over Digital Tax**

**Washington, D.C.** – President Donald Trump announced Friday he is ending all trade discussions with Canada and plans to impose new tariffs on Canadian exports in response to Canada’s new Digital Services Tax Act (DSTA). Trump claims the tax unfairly targets American tech companies and constitutes “a direct and blatant attack” on the United States.

The DSTA, which came into force in June 2024, imposes a 3% levy on revenues earned from Canadian users by large technology firms with global revenues exceeding $820 million and Canadian revenues exceeding $14.7 million. US companies like Amazon, Meta, Google, and Uber are estimated to face $2 billion in bills under the new tax.

“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,” Trump wrote on his Truth Social platform. He added that new tariffs for Canada would be announced within days.

The US is Canada’s largest trading partner, with over 80% of Canadian exports destined for the US. In 2024, total bilateral goods trade exceeded US$762 billion. A disruption due to tariffs could have significant economic consequences for both countries.

Critics warn Trump’s actions could undo recent progress in US-Canada relations under Canadian Prime Minister Carney.

The DSTA has also faced domestic pushback in Canada, with businesses warning of increased costs and potential US retaliation.

Canada has maintained that the tax is part of broader trade discussions with the US, but the future of those discussions is now uncertain.

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