President Donald Trump says the United States will suspend trade negotiations with Canada after Canada implemented a digital services tax on U.S. based companies.
Trump wrote on social media that because Canada has chosen to implement a tax on U.S.-based digital services, the U.S. would be ending trade discussion.
"Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately. We will let Canada know the Tariff that the will be paying to do business with the United States of America within the next seven day period."
The 3% tax will apply to revenue that U.S. tech companies generate from Canadian users. It applies retroactively, meaning companies like Apple, Google and Netflix will owe Canada $2 billion for services already rendered through June.
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A White House official told Scripps News the decision aligned with policies set out in a memorandum from President Trump on February 21.
"My Administration will not allow American companies and workers and American economic and national security interests to be compromised by one-sided, anti-competitive policies and practices of foreign governments. American businesses will no longer prop up failed foreign economies through extortive fines and taxes," the memorandum reads.
Scripps News has reached out to the White House for further comment.
"Digital Services Taxes are designed to unfairly target U.S. tech companies — punishing American innovation and costing our economy and companies tens of billions," Commerce Secretary Howard Lutnick wrote. "Why do countries think they can attack our technology companies and then turn around and try to take advantage of our 30 Trillion dollar economy?"
