Trump terminates US-Canada negotiations! DST becomes the trigger point, US Treasury Secretary: New round of tariff measures to be announced soon.

Since U.S. Secretary of Commerce Howard Lutnick announced on June 27 that a new round of negotiations would be initiated with 10 major trading partners within the next two weeks, it seems that the opening has not gone smoothly. U.S. President Donald Trump announced on June 28 that all negotiations with Canada would be immediately halted due to Canada proposing to impose a digital services tax (DST) on tech companies and refusing to postpone the tax. In response, the U.S. Treasury Secretary stated in an interview on the same day that a "new round of tariff measures" against Canada would be announced within a week, causing turbulence in the Canadian stock market.

DST becomes the key to halting negotiations, opening a new round of talks within a week.

Trump stated on Truth Social:

"Canada not only imposes a 400% tariff on our dairy products, but now also wants to impose a digital services tax on our tech industry, immediately halting all trade negotiations with Canada."

Last week, Trump met with Canadian Prime Minister Mark Carney at the G7 summit, during which he requested Carney to postpone the implementation of DST by 30 days, but it was refused.

U.S. Treasury Secretary Scott Bessent ( stated in an interview on the same day:

The United States is preparing to initiate a Section 301 investigation and will impose additional import taxes on Canada, launching a new round of tariff measures.

What is DST? Why are tech companies complaining incessantly?

Digital Services Tax )DST( is a type of tax levied on the revenue generated by multinational digital enterprises providing digital services in specific countries or regions. Traditional tax systems are based on "physical presence," making it difficult to effectively tax digital technology companies like )Google, Apple, Facebook, Amazon(. Therefore, this tax was established to ensure that these companies pay taxes "where they earn money."

The following is a summary table of the implementation of DST or similar tax policies in major countries for the years 2024-2025:

Although Canada's Digital Services Tax (DST) was legislated a year ago, businesses have yet to comply, so the Canadian government plans to officially impose it starting July 1. It is understood that if a tech company’s digital revenue in Canada exceeds 20 million CAD ), which is roughly 14.6 million USD (, they will have to pay a 3% tax. Uber has also expressed dissatisfaction with the DST, and Amazon issued a statement saying it is a "discriminatory" tax system that harms Canadian consumers who bear the transferred costs.

Kahn's attitude is tough, and various sectors are demanding a withdrawal of taxes in exchange for tariff exemptions.

After Trump pressured Canada, the Canadian dollar fell against the US dollar by more than 0.5% at one point during the day, later recovering somewhat but not fully returning to the opening level. The S&P/TSX Composite Index in Toronto, Canada closed at 26,692.32 points that day, down 59.58 points, a decrease of approximately 0.22%.

Immediately following, Canadian business groups and political figures also began calling on Prime Minister Carney to cancel the tax system to avoid retaliatory tariffs. Ontario Premier Doug Ford ) also once again urged the Canadian government to abandon the DST. Meanwhile, the Canadian Innovators Association bluntly stated that the tax is essentially passed on to advertisers and consumers, while tech giants are hardly affected.

In response, Carney did not comment on Trump's post but stated that he would prioritize "domestic interests" and continue negotiations. The Canadian finance minister has not responded as to whether there will be adjustments to the tax system, but has hinted that the DST could become part of the US-Canada trade negotiations. Investors should continue to pay attention to the upcoming new round of tariffs from the US on Canada.

This article Trump ends US-Canada negotiations! DST becomes the trigger point, US Treasury Secretary: New round of tariff measures will be announced soon, first appeared in Chain News ABMedia.