Trump Ends Trade Talks With Canada Over Digital Services Tax

US President Donald Trump said he was ending all trade discussions with Canada in retaliation for the country's digital services tax, and threatened to impose a fresh tariff rate within the next week.

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WASHINGTON -

"Based on this egregious tax, we are hereby terminating all discussions on trade with Canada, effective immediately," he posted on social media on June 27.

"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."

Canada and the US have one of the world's largest bilateral trading relationships, exchanging more than US$900 billion (S$1.15 trillion) of goods and services in 2024.

Canadian Prime Minister Mark Carney, speaking briefly to a television reporter, said on June 27 that he had not spoken to Mr Trump yet.

"We'll continue to conduct these complex negotiations in the best interests of Canadians," he said.

The Canadian dollar dropped more than 0.5 per cent almost immediately after Mr Trump's post before paring those losses. Canada's benchmark equity index fell, and the shares of companies that rely on moving goods across the border, including General Motors and apparel maker Canada Goose Holdings, also took a hit.

Dozens of countries face a July 9 deadline for the higher tariffs to kick back into place and have been engaged in negotiations with the US.

That deadline does not apply to Canada and Mexico.