Trump Ends Canada Trade Talks Over Tech Tax as July 9 Tariff Deadline Looms | Court Blocks Reciprocal Tariffs, China-US Reach London Trade Framework

Key Points

It seems likely that President Trump will not extend the July 9 deadline for trade deals, though he has suggested some flexibility.
Research suggests Canada has scrapped its digital services tax, effective June 30, 2025, to advance trade talks with the U.S.
The evidence leans toward ongoing trade negotiations, with potential new agreements by July 21, amid some controversy over tariffs.

Background

President Trump has set a July 9 deadline for trade deals, particularly with the EU, and has indicated he might not extend it, though he has also suggested the deadline could be flexible. This comes as part of broader tariff discussions, with recent developments showing limited agreements with countries like China and the UK, described as frameworks rather than finalized deals. Meanwhile, Canada has decided to scrap its planned digital services tax, which was set to take effect on June 30, 2025, in an effort to resume stalled trade negotiations with the U.S., aiming for a new economic agreement by July 21. This decision follows tensions, including Trump’s threats of new tariffs on Canadian goods, highlighting the complexity and sensitivity of these trade relations.

Details on Tariffs

Trump’s stance includes a July 9 deadline for negotiations, with a related July 8 end to a 90-day tariff pause, potentially reverting to higher rates if not updated. He has claimed deals with several countries, but details remain unclear, and there is legal contention, with a federal trade court ruling against his tariff authority in late May 2025, though an appeals court paused this ruling. The situation is dynamic, with potential global economic impacts if tariffs escalate.

Canada’s Decision

Canada’s scrapping of the digital services tax, a 3% levy on U.S. tech firms’ revenue from Canadian users, was announced late on June 29, 2025, just hours before it was due. This tax, retroactive to 2022, targeted companies like Amazon, Meta, and Google, and was seen as a point of contention by the U.S. The decision aims to smooth trade talks, with Canada facing existing U.S. tariffs like 50% on steel and aluminum, and seeking to avoid further escalation.

Survey Note: Comprehensive Analysis of Trump Tariffs and Canada’s Tech Tax Developments

This note provides a detailed examination of recent developments concerning President Trump’s tariff policies, particularly the July 9 deadline, and Canada’s decision to scrap its digital services tax, as of June 30, 2025. The analysis is grounded in recent news reports, government statements, and social media discussions, offering a holistic view of the trade landscape between the U.S. and Canada, as well as broader international implications.

Trump’s Tariff Deadline and Stance

President Trump has set a significant deadline of July 9, 2025, for trade negotiations, particularly with the European Union, as part of his tariff strategy. Recent reports, such as those from CNBC and Bloomberg, indicate that Trump has expressed a reluctance to extend this deadline, stating, “No, we can do whatever we want,” suggesting flexibility in his approach. This deadline is tied to a broader policy where, if no deals are reached, tariffs could escalate, potentially triggering a 50% tariff on EU imports.

A related timeline includes a July 8 deadline, marking the end of a 90-day pause on “reciprocal tariffs” initiated by an executive order signed on April 9, 2025, reducing tariffs to 10% temporarily , though these are not finalized.

Legal challenges add complexity, with a federal trade court striking down the tariffs in late May 2025, ruling Trump lacked authority, though an appeals court paused this ruling . The White House press secretary, Karoline Leavitt, has indicated that an extension is possible, leaving the decision to the president, as reported in CNBC.

Canada’s Decision to Scrap the Digital Services Tax

Parallel to these developments, Canada has taken a significant step by scrapping its digital services tax (DST), announced late on June 29, 2025, just hours before it was due to take effect on June 30, 2025. This decision, detailed in Reuters and the Government of Canada, aims to advance stalled trade negotiations with the U.S.

The DST was a 3% levy on digital services revenue for firms with over $20 million from Canadian users in a calendar year, retroactive to 2022, targeting major U.S. tech companies like Amazon, Meta, Alphabet’s Google, and Apple. Introduced in 2020 to address tax revenue from tech giants operating in Canada without paying taxes on Canadian-generated revenue, it became a point of contention, with the U.S. viewing it as a “blatant attack,” as noted in recent X posts (e.g., boiagentone, selinawangtv).

Trump’s reaction included terminating trade talks with Canada, threatening new tariffs within a week, as seen in X posts from June 27 and 28, 2025, estimating costs to U.S. tech giants at over $2 billion annuall. This escalation followed a breakdown after the G7 meeting in mid-June, where leaders agreed to wrap up a new economic agreement within 30 days, as reported in Reuters.

Canada’s decision to scrap the DST is part of a broader context, with existing U.S. tariffs like 50% on Canadian steel and aluminum, and last year’s trade volume showing Canada buying $349.4 billion of U.S. goods while exporting $412.7 billion to the U.S. The Biden administration had requested consultations in 2024, citing inconsistency with North American trade deal obligations, adding to the tension .

Finance Minister François-Philippe Champagne will bring forward legislation to rescind the Digital Services Tax Act, halting the June 30, 2025, collection, as stated in the government’s official release. This move is seen as a victory for the Trump administration, aiming for a deal by July 21, amidst ongoing negotiations and potential tariff escalations.

Comparative Analysis and Implications

To organize the key developments, the following table summarizes the timelines and stakes:

Aspect	Details
Trump’s Tariff Deadline	July 9, 2025, for EU deals; July 8 end of 90-day pause; potential 50% tariffs if no deal
Trump’s Flexibility	May extend or shorten deadline; legal challenges ongoing, court rulings paused
Canada’s DST	3% tax on U.S. tech firms, scrapped June 29, 2025, retroactive to 2022, targeting Amazon, Meta, etc.
Trade Volume (2024)	Canada: $349.4B U.S. imports, $412.7B exports; U.S. tariffs at 50% on steel/aluminum
Negotiation Goals	Canada aims for deal by July 21; U.S. threatens new tariffs, ongoing talks

The interplay between these developments highlights the dynamic nature of international trade, with Canada’s decision potentially easing tensions but not resolving underlying disputes. Trump’s tariff strategy, while assertive, faces legal and economic challenges, with global implications if tariffs escalate. The situation remains fluid, with X posts reflecting public and political reactions, such as Canadian MP Charlie Angus’s criticism of Trump’s tariff threats in January 2025 , underscoring the controversy.

Conclusion

As of June 30, 2025, the trade landscape is marked by Trump’s firm yet flexible stance on the July 9 deadline and Canada’s strategic move to scrap the DST to resume talks. Both developments are interconnected, with potential for new agreements by July 21, though uncertainties and legal challenges persist. This analysis, drawing from news reports, government statements, and social media, provides a comprehensive view for stakeholders monitoring these critical trade relations.