Mr. Trump abruptly announced on Friday that he was ending tariff discussions because of Canada’s plan to go ahead with collecting Digital Services Tax.ANDREW CABALLERO-REYNOLDS/AFP/Getty Images
U.S. President Donald Trump raised his longstanding objections to Canada’s supply-management policies when he was asked in an interview about his sudden Friday announcement that he would call off trade talks between the two countries.
Mr. Trump made the comments in a prerecorded interview with Fox News Channel host Maria Bartiromo that aired Sunday morning.
Prime Minister Mark Carney and Mr. Trump agreed earlier this month at the G7 summit in Kananaskis, Alta., to negotiate an economic and security deal within 30 days.
The deadline raised expectations that Canada might be able to eliminate or reduce the series of tariffs the Trump administration has imposed on Canada this year. The G7 meeting’s conclusion also suggested that relations between Mr. Trump and Mr. Carney were moving in a positive direction and that a quick deal was possible.
But that tone has shifted sharply in recent days, first with Mr. Trump abruptly announcing Friday that he was ending those talks because of Canada’s plan to go ahead with collecting a digital services tax (DST) from large multinationals such as Netflix and Amazon as of Monday, retroactive to 2022.
Mr. Trump’s statement had also mentioned supply management, Canada’s policy of strictly controlling imports of eggs, dairy and poultry to protect domestic producers. But he said the “egregious” DST was the reason he was “terminating” trade discussions with Canada.
In the Fox interview, Mr. Trump was asked about his plan to stop all trade discussions with Canada.
“Until such time as they drop certain taxes, yeah,” he answered. “People don’t realize, Canada is very nasty to deal with.”
He then repeated his previously stated objections to Canada’s agricultural policies, which set high tariffs on imports above certain exempted levels. He did not explicitly say whether Canadian changes to supply management were a precondition for resuming talks.
He also said, “I love Canada” and “hopefully we’ll be fine with Canada” before reiterating his desire for Canada to be part of the U.S.
Parliament, prior to breaking for summer, approved the Bloc Québécois’s Bill C-202, related to supply management.
The short bill aims to hamstring the government’s ability to make concessions related to the existing tariffs or quotas in any trade negotiations.
Audrey Champoux, the Prime Minister’s press secretary, declined to comment further Sunday on the President’s position on trade talks, pointing instead to the statement the Prime Minister’s Office issued Friday.
That brief statement said the Canadian government “will continue to engage in these complex negotiations with the United States in the best interests of Canadian workers and businesses.”
As of Monday, companies affected by the DST will be required to file a return and submit taxes owed, retroactive to 2022. The tax is a 3-per-cent charge on services provided by major technology companies in Canada.
Former Quebec premier Jean Charest, who is a member of the Prime Minister’s Council on Canada-U.S. Relations, said in an interview Sunday that Canada should take the President’s comments seriously, while not overreacting.
“I agree with those who argue that we shouldn’t be jumping up and down every time Mr. Trump says something,” he said.
The council was just wrapping up a virtual meeting Friday afternoon with the Prime Minister when Mr. Trump announced he was terminating the talks.
Mr. Charest said the panel members have come to expect these types of developments as part of the negotiation process.
“I don’t want to sound cynical about it, because we do take this very seriously, but I think we all now accept the fact that this is the way Mr. Trump operates,” he said.
Mr. Charest said it’s clear by the all-party support for the Bloc’s bill that supply management is not up for negotiation by Canada.
However, he said the DST could potentially be delayed or altered in exchange for concessions by the U.S. side.
The Parliamentary Budget Officer has previously estimated that the DST would bring in about $1.2-billion per year if implemented. Last year’s federal budget provided a lower estimate, saying it would bring in $2.3-billion in 2024-25, covering the 2022, 2023 and 2024 taxation years, and then $900-million in each of the following four years.
Many of the large multinationals who would be required to pay the DST have long lobbied against the move.
Joel Kaplan, the chief global affairs officer for Meta, praised Mr. Trump on X Friday for calling off trade talks with Canada because of the DST.
“Thank you, President Trump, for standing up for American tech companies in the face of unprecedented attacks from other governments,” he wrote.
Unifor national president Lana Payne, who is also a member of the Prime Minister’s Council on Canada-U.S. Relations, responded online by saying Mr. Trump keeps changing what his issue is with Canada.
“First he said it was about fentanyl and the border. Then supply management. Then autos. Then lumber. Then banks. Then steel and aluminum. Now it’s our tax system – which other countries and sovereign nations do,” she wrote on X Friday.
“There is no rational consistent objective other than to break us. And as for the tech bros needing protecting from a little tax. Come on.”
A 2024 report by the U.S.-based Tax Foundation said at the time that 18 countries in addition to Canada have implemented some form of DST, including Austria, France, India and Britain.
The report said that about half of all European countries have either announced, proposed or implemented a DST.
Canadian business groups, including the Business Council of Canada, have long warned that the unilateral implementation of a DST could risk undermining Canada’s economic relationship with the U.S.
Last month, the U.S. and Britain announced a trade deal related to a range of products. But Britain’s 2-per-cent DST was not affected.
In a statement at the time, U.S. Trade Representative Jamieson Greer said the U.S. “is disappointed that Britain was unwilling to agree to fully address its discriminatory Digital Services Tax.”