Daijiworld Media Network - Washington

Washington, Jun 28: US President Donald Trump has abruptly terminated all trade discussions with Canada, lashing out against the country’s newly enacted Digital Services Tax (DST), which is set to take effect from June 30. The move comes amid heightened tensions as the tax directly targets large tech and e-commerce companies—many of which are based in the United States.

The DST imposes a 3% tax on revenue earned through digital services such as online advertising, social media, data sales, and online marketplaces. It applies to companies with global revenues over €750 million and Canadian digital revenues exceeding CAD 20 million. Notably, the tax is retroactive to January 1, 2022.

Trump, posting on Truth Social, called the policy "disrespectful" and "discriminatory," claiming it unfairly penalizes American businesses. He warned of further action and confirmed that all ongoing trade talks with Canada had been called off.

Canadian Finance Minister François-Philippe Champagne defended the tax, saying it was passed through Parliament and is necessary due to continued delays in a global digital tax framework. Canada expects to earn approximately CAD 7.2 billion in five years through this measure.

Despite previous objections raised under the US-Mexico-Canada Agreement (USMCA), Canada is moving forward. The US had earlier threatened retaliatory tariffs and launched dispute settlement consultations over what it deems a breach of trade obligations.

Trump's latest reaction, just days ahead of the tax's implementation, underscores the deepening rift between Washington and Ottawa as both countries prepare for another round of economic standoff.