Canada Will Scrap Tax That Prompted Trump to Suspend Trade TalksChina wrote: Sun Jun 29, 2025 11:36 am90 deals in 90 days, right?
'We have all the cards' - Trump says he is ending Canada trade talks
US President Donald Trump has said he is cutting off trade talks with Canada "immediately" as the country looks to start enforcing a tax policy targeting big tech companies.
The latest move, which he announced on social media, comes as the neighbouring nations had been working to agree a trade deal by mid-July.
Both countries have imposed tariffs on each other's goods after Trump sparked a trade war earlier this year and threatened to annex Canada using "economic force".
On Friday, the US president said he was ending talks due to what he called an "egregious tax" on tech companies and added he would announce new tariffs on goods crossing the border within the next week.
"We are hereby terminating ALL discussions on Trade with Canada, effective immediately," he wrote on social media.
"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."
Later in the Oval Office, President Trump told reporters that the US has "all the cards".
"Economically, we have such power over Canada. I'd rather not use it," he added.
In brief comments to reporters, Prime Minister Mark Carney suggested that talks would grind on.
"We will continue to conduct these complex negotiations in the best interest of Canadians," he said.
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Canada’s government announced on Sunday night that it would cancel a tax on American technology companies that led President Trump to suspend trade talks between the two countries, handing an important victory to Mr. Trump.
Prime Minister Mark Carney discussed the decision to scrap Canada’s digital services tax with Mr. Trump on Sunday, Mr. Carney’s office said. In a sign that trade talks were resuming, Canada’s finance minister, François-Philippe Champagne, spoke with the U.S. Trade Representative, Jamieson Greer, on Sunday, according to Mr. Carney’s office.
The tax, which had been due to take effect on Monday, became the latest flashpoint in difficult negotiations between the United States and Canada on Friday, when Mr. Trump said the talks were off. On social media, Mr. Trump called the levy a “blatant attack” and said he would inform Canada within a week about the duties “they will be paying to do business with the United States of America.”
Forty-eight hours later, the Canadian government folded, announcing it would not go ahead with the tax.
Technically, the cancellation of the tax needs to be approved in legislation, so until that time, the government is suspending its collection. Politically, canceling the tax should be a simple matter for the government.
Canada’s 3 percent digital services tax has been in place since last year, but the first payments were only due beginning on Monday. Because the tax is retroactive, American companies were preparing to turn over roughly $2.7 billion to the Canadian government, according to a trade group for large American tech companies.
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