Tensions Rise as Trump Slams Canada Over Digital Tax

Just as U.S.–Canada relations seemed stable, former President Donald Trump reignited tensions, calling Canada’s new 3% digital services tax a “blatant attack” on American tech firms like Amazon, Google, Meta, and others. The tax, retroactive to 2022, could cost these companies $2 billion by month’s end.

In a post on Truth Social (June 27), Trump accused Canada of being difficult to trade with and suspended all trade talks, threatening new tariffs.

Canadian Prime Minister Mark Carney responded calmly: “We’ll continue to negotiate in the best interests of Canadians.” Trump doubled down, saying the U.S. holds economic power over Canada and predicting Ottawa would back down.

Under growing pressure from U.S. lawmakers, who called the tax “unprecedented and retroactive,” Trump also criticized Europe for similar actions, insisting only the U.S. should tax its own companies.

Following a tense phone call between Trump and Carney, Canada backed off the tax, announcing a pause to resume trade talks, just before the tax payments were due. Carney confirmed the move aligns with negotiations ahead of the G7 deadline in July 2025.