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‘We have all the cards’: Trump ending all trade talks with Canada ‘immediately’ over digital services tax

By Spencer Van Dyk

Updated: June 27, 2025 at 5:29PM EDT

Published: June 27, 2025 at 1:53PM EDT

U.S. President Donald Trump says his team is ending all trade talks with Canada, “effective immediately,” citing disagreement over Canada’s controversial digital services tax as the reason for shutting down negotiations.

He made the announcement in a post Friday on Truth Social, calling the levy “a direct and blatant attack” on the U.S. and its technology companies.

Trump’s announcement is a wrench in ongoing trade discussions between the two countries, which have been in the throes of a trade war for months, since the president’s first slate of tariffs on Canadian goods in February.

Trump has since levied a series of sweeping and stacked tariffs on Canadian products, targeting a range of industries. Canadian countermeasures are also in place.

Prime Minister Mark Carney, meanwhile, held a closed-to-media meeting with members of the Prime Minister’s Council on Canada-U.S. Relations earlier Friday.

On his way out of the meeting, the prime minister told reporters he had not spoken with the president since the latter posted to Truth Social.

“The Canadian government will continue to engage in these complex negotiations with the United States in the best interests of Canadian workers and businesses,” reads a statement from the Prime Minister’s Office Friday afternoon.

Following the G7 meetings in Kananaskis, Alta. earlier this month, Trump and Carney said they would pursue negotiations toward a new trade and security deal by mid-July, a 30-day deadline from their discussions in the Rockies.

Trump, however, now says he’s ending the talks.

“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,” Trump wrote in his Truth Social post.

Speaking to reporters in the Oval Office Friday afternoon, Trump initially refused to answer a question about Canada, saying he was dealing with a “much more important subject,” signing a peace agreement between Rwanda and the Democratic Republic of the Congo.

When he was asked again about trade negotiations, however, he said: “Canada has been a very difficult country to deal with over the years,” and calling the government “foolish” for implementing the tax.

“They put a tax on companies that were American companies that they shouldn’t. A very, very severe tax,” Trump said. “And, yeah, I guess they could remove it. They will. But I mean, it doesn’t matter to me.”

“We have all the cards. We have all the cards,” he added. “You know, we do a lot of business with Canada, but relatively little. They do most of their businesses with us. And when you have that circumstance, you treat people better.”

Digital services tax ‘discriminatory’: former U.S. trade rep

The tax — first pitched by the Liberals in their 2021 budget — sees the federal government impose a three per cent levy on revenues over $20 million from tech giants earning money off Canadian content and Canadian users.

It has been deeply unpopular and widely criticized by American lawmakers for years. They argue the policy disproportionately impacts U.S. companies, with former Biden administration U.S. trade representative Katherine Tai calling the levy “discriminatory.”

The first payment of the tax is due Monday and will charge retroactively to 2022.

In an interview on CTV’s Question Period in December, former Liberal finance minister Bill Morneau told host Vassy Kapelos that if the Canadian government wanted to make headway with the U.S. administration, it should look at scrapping some sticking-point policies, namely the digital services tax.

Feds standing by controversial tax

Asked about the levy by reporters on Parliament Hill last week, Finance Minister François-Philippe Champagne said the government was still planning to “go ahead” with the digital services tax.

In French, asked whether his government is willing to scrap the tax, Champagne said “we’re not there at all.” He added the tax was a topic of conversation at the G7 meeting earlier this month, and called it a “neutral” tax, which “isn’t directed toward any particular country.”

Foreign Affairs Minister Anita Anand said in an interview with CTV News Friday that Canada will continue to “press in terms of Canadian interests.”

“I want to stress that our negotiations occur behind closed doors for a reason, that we need to continue to ensure that Canadian interests are protected at every turn, and we are disadvantaged if we continue to share strategy externally with the media,” Anand said. “But, I will say that the guiding principle of these negotiations is to ensure that these unjustified tariffs are removed, and that is our fundamental starting point.”

Anand also pointed to the U.K. and France having digital services taxes of their own, an argument often cited by the previous Liberal government under former prime minister Justin Trudeau when faced with criticisms of the policy.

Tax should be ‘expendable’ in negotiations: Manley

In a statement to CTV News, Business Council of Canada president and CEO Goldy Hyder said his organization has been calling for the federal government to scrap the tax for years.

“Bottom line is, (Internal Trade Minister) Chrystia Freeland, when she was finance minister, booked the revenues, and now they’re due,” Hyder said. “And these American companies have been asking that we align with the OECD and determine how to manage this.”

Hyder said he’s been in contact with Champagne about the business council’s position on the tax, and while he wouldn’t divulge the contents of those conversations, said “suffice to say, he has no intention of removing it.”

“And, if we were bluffing, the bluff just got called, and we’ve got to midnight Monday to get through this,” Hyder added.

Meanwhile, former Liberal finance minister John Manley said Canada should “keep calm and carry on” in the face of Trump’s reversal, telling CTV News “it’s not a trade negotiation unless somebody throws a tantrum.”

“We’re dealing with Donald Trump, after all,” he said.

Manley said the Carney government should be willing to concede the digital services tax if it gets the two countries closer to a deal, calling the levy “expendable,” but adding negotiators should hold out until there are concessions from the U.S. side before putting the levy on the table.

“If you’ve got something in a negotiation that you’re willing to give up, you don’t offer that off the top,” he said. “You hold back for the end.”

The parliamentary budget officer has estimated the tax will generate $7.2 billion in revenues for the federal government over five years.

With files from CTV News’ Judy Trinh and Luca Caruso-Moro

cross-posted from: https://lemmy.ml/post/31832650

from The Toronto Star
By Michele Landsberg, Contributor
Michele Landsberg is a journalist and author based in Toronto.
June 15, 2025

[excellent article]

"When I knew I had to do something, anything, about the war crimes in Gaza (I was haunted by my lifelong grief and outrage that no-one, no-one, no-one stood up for us when we were being annihilated in Europe) I was immediately attacked online by right-wing Jews. The usual condescending reproaches and violent insults were trotted out: I was giving aid to our enemies; I was spreading a “blood libel”; I was a Jew-hater; I was “pro-rape”. None of these insults could touch me because I knew how ludicrously false they were. As painful as it is to lose cherished friends, I asked myself: Is this intense social pressure why so very few Germans stood up against the Nazis?"

cross-posted from: https://lemmygrad.ml/post/8184918

What do you all think of this?

Especially you? @yogthos@lemmygrad.ml

I don't mind Carney's approach, but it definitely wants to use experimentation in the Ukraine War as a springboard for the further enhancement of Canada's military capabilities, I think.

I would glance through the article. Here it is in full (the article on the web page has links here and there, if you want to check it out):

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Prime Minister Mark Carney is busy navigating the choppy waters of international diplomacy, including hosting the G-7 leaders’ summit, with a full cast including Donald Trump, trying to strike a new accord with the European Union, and heading to the Hague for a major summit of the North Atlantic Treaty Organization. He has attempted to get ahead of one issue that could threaten the achievement of good outcomes for Canada—namely, deficiencies in our hard power.

On June 9, Carney stepped up to a podium at the Munk School of International Affairs, at the University of Toronto, to tell Canadians they are confronting a “hinge” moment in the unravelling of the international order, and that his government is going to rapidly accelerate defence spending and reorient Canadian defence posture. He said his government is going to shift from emphasizing the strength of Canadian values to emphasizing the value of Canadian strength. It was the closest thing to a call to arms from a prime minister since September 1939—the start of World War II.

The prime minister announced new and immediate dollars for defence capabilities, to the tune of 9 billion, along with an accelerated timetable to meet the NATO baseline spending commitment of 2 percent of gross domestic product (which dates from 2014). This is now to be reached five years ahead of schedule—by the end of the fiscal year.

Carney also promised the “immediate design” of a new defence policy. Given that the ink has just dried on the last defence policy, “Our North, Strong and Free,” released in April 2024, what’s the urgency? Partly, it’s framed by politics—the desire of a new government, with a new guy in charge, to put its stamp on an ambitious agenda for change. There is a need to provide a strategic rationale for major spending increases that go beyond the promises that littered the pages of the 2024 defence policy. Trump has played his part as well. The determination of the Carney government to diversify its sources of defence procurement, to escape being reliant for three quarters of its military gear on American manufacturers, while trying to reach some kind of new security bargain with the United States, has also helped render the 2024 defence policy obsolete.

In addition to these political imperatives, the fast-flowing lessons from the Ukraine war—both those adopted directly from the war fighting and lessons borrowed from others—force changes in thinking.

The audacious Ukrainian drone attack of June 1 against several Russian strategic bomber bases scattered throughout the country is the single most striking example yet of a key lesson of the war: the centrality of this new weapon of war. Although precise battle damage may never be known, these drone attacks, which reached as far as the Russian Arctic and the Mongolian border region, apparently destroyed or disabled a substantial number of Russian long-range strategic bombers, the ones Russian president Vladimir Putin’s air force relies on to deliver devastating cruise missile attacks against civilian infrastructure and people in Ukraine. The attack has been dubbed Russia’s “Pearl Harbor.”

The Ukraine drone war, and its wider geopolitical threat, has moved to the centre of defence thinking amongst many of our European allies. Britain is one of the first NATO countries out of the gate to try to consciously and deeply apply the evolving lessons of the Ukraine war to its own strategic thinking and rearmament. It published its “Strategic Defence Review” on June 2, the day after the Ukraine drone strike. The SDR is meant to move the UK to a posture of “war-fighting readiness,” with a focus on its role as a leading NATO power able to defend the “Euro-Atlantic” space. The document is suffused with an appreciation of the current vulnerabilities of Britain, the importance of drone warfare, and the surrounding requirements of a technologically enabled military.

Canada is typically good at learning lessons from other first movers. You can be sure that the SDR will be an important reference for the new Canadian defence policy, even while the designs are different. Canada is not yet focused on “war-fighting readiness.” But the commitment to Euro-Atlantic security is shared.

Much of the Canadian push on defence will go into the “four pillars” Carney has described: the human capital of the military, improving defence capabilities, building out a Canadian defence industrial base, and diversifying defence partnerships to reduce Canada’s historic overdependence on the US.

As Canada pursues these four pillars, what are the copious lessons on offer from the SDR and from the experiences of the Ukraine war?

First, acquisition of the most expensive, technologically sophisticated weapons systems cannot be the only force that drives rearmament. Watch out for the cheap giant killers, especially drones, now at the cutting edge of warfare and hybrid threats. A capable Canadian military is going to need an entirely new drone capacity in the air, on land, at sea, and under the seas. Canada is also going to need an unprecedented capacity to defend against drones.

Second. The deterrence calculation is changing. There is now an arms race to use data efficiently and at speed. The SDR puts its money on the importance of establishing what it calls a “digital targeting web” to fuse and sort collected intelligence on targets, apply AI, get information to users at all levels at speed, and assist rapid decision making, all relying on a secure cloud architecture. This is called, in the British document, connecting “sensors, deciders and effecters.”

A third lesson takes stock of how the Ukraine war has forced the development of a civilian–industrial innovation complex, based on a radical reshaping of defence procurement, as a key enabler. Both the UK, in the SDR, and Canada have taken this to heart.

Finally, there is the question of how to pay for a massive program of defence modernization. To ameliorate the impact of tax hikes or the undermining of social services, the UK and Canadian governments place their faith in the idea of a “defence dividend,” achieved through the economic boost of a reinvigorated domestic defence manufacturing base.

Whatever the fiscal solution, rebuilding Canadian military capacity, defending our sovereignty and security, and restoring a hard-power role for Canada in the world will ultimately depend on a new willingness on the part of Canadians to pay the price.

Ukrainians simply have no choice in the matter. The UK government, with its eyes firmly fixed on the Ukraine war, believes it has no choice either.

For Canada, the starting point will have to be a deeper appreciation that we really live in a dangerous world—at a “hinge” moment. Canadians must have a genuine dialogue about the threats from every compass point, and the government will have to step forward as a key educator. We could take inspiration from the SDR’s call for a “national conversation,” involving a two-year series of public-outreach events across the country, led by the government. Any Canadian version would need to address not only new geopolitical threats and the requirements of the military but also the challenge of maintaining information integrity in the face of foreign espionage, interference operations, and the pernicious effects of misinformation.

Publishing a new defence policy, as promised by the prime minister, should help. It may well be folded into the forthcoming national security strategy. The SDR tries to show how defence “deters and protects” and why defence needs support to “strengthen the nation’s resilience.”

These are important questions for Canadians to understand and address. For many Canadians, spending on defence is spending on war fighting. The perception has to change: we’re spending to prevent war fighting.

We have the luxury of seeking answers about our defence capability needs and not having them brutally forced on us by an outside aggressor. At least for now.

Reprinted, with permission, from the Centre for International Governance Innovation.

What could be a better Canadian alternative to Canada Post?

What would that service look like? Should it be Public or Private?