Fact Check: Trump Threatens to End Trade Talks Over Canada's Digital Tax on U.S. Tech Giants
What We Know
On June 27, 2025, President Donald Trump announced that he would be "terminating ALL discussions on Trade with Canada" due to Canada's decision to proceed with a digital services tax that would affect U.S. technology companies. This tax, which was set to take effect shortly, imposed a 3% levy on revenues generated by companies like Amazon, Google, and Meta from Canadian users, retroactively applying to earnings from 2022. Trump characterized the tax as "a direct and blatant attack on our country" and stated that Canada had informed the U.S. of its intention to implement the tax, prompting his decision to suspend trade negotiations (AP News, CNBC).
Analysis
The claim that Trump threatened to end trade talks over Canada's digital tax is supported by multiple credible sources. According to AP News, Trump explicitly stated that he would suspend trade talks in response to Canada's tax plans. Furthermore, Reuters reported that the Canadian government subsequently rescinded the digital services tax to facilitate the resumption of trade negotiations, indicating the seriousness of Trump's threat.
The digital services tax was controversial, as it was perceived to disproportionately target U.S. tech firms. U.S. Treasury Secretary Scott Bessent expressed concerns about the tax's fairness and its potential impact on U.S. companies (CNBC). This context adds weight to Trump's assertion that the tax was an attack on the U.S. economy.
The sources used in this analysis are reliable news organizations with a history of accurate reporting. AP News and Reuters are both well-respected for their journalistic integrity and adherence to factual reporting standards.
Conclusion
The claim that Trump threatened to end trade talks over Canada's digital tax on U.S. tech giants is True. Trump's statements and subsequent actions clearly indicate that he viewed the digital services tax as a significant barrier to trade negotiations, leading to his decision to suspend discussions with Canada.
