American technology companies find themselves at the center of an escalating trade war between the United States and Canada, as President Trump terminated bilateral trade negotiations over a controversial digital tax. The abrupt end to diplomatic talks threatens to reshape North American economic relationships.
Canada’s digital services tax, set to take effect Monday, will extract an estimated $3 billion from major US technology firms including Google’s parent company Alphabet, e-commerce giant Amazon, and social media platform Meta. Trump condemned this measure as an “egregious tax” that unfairly targets American innovation and competitiveness.
The collapse of trade talks marks a dramatic shift from the optimistic tone established at the recent G7 summit in Alberta. Prime Minister Mark Carney had successfully negotiated a 30-day window for reaching a comprehensive trade agreement, but those efforts have now been completely abandoned due to the tax dispute.
Trump’s announcement via Truth Social included broader criticisms of Canadian trade practices, particularly highlighting dairy tariffs that can reach 400% and significantly impact American farmers. The president has demanded that Canada be notified of retaliatory tariffs within seven days, suggesting an imminent escalation in trade tensions between the two nations.