Ag Policy Blog

President Donald Trump on Friday posted on social media that he was ending any trade talks with Canada over negotiations tied to both U.S. dairy farmers and a tax on U.S. technology companies.

In a post on Truth Social, Trump began by highlighting the issues with dairy, but his main issue was the tax on digital services. Trump stated in his post that the U.S. government will inform Canada of its new tariffs next week. If anything, Trump's post reflected these two issues remain difficult sticking points in trade talks between the two countries.

"We have just been informed that Canada, a very difficult Country to TRADE with, including the fact that they have charged our Farmers as much as 400% Tariffs, for years, on Dairy Products, has just announced that they are putting a Digital Services Tax on our American Technology Companies, which is a direct and blatant attack on our Country," Trump posted. "They are copying the European Union, which has done the same thing, and is currently under discussion with us also."

The U.S. and Canada did $762.1 billion in back and forth trade last year, which included $29.5 billion in U.S. agricultural sales to Canada.

Canada is also the second-largest market for U.S. dairy exports, behind only Mexico. Dairy exports to Canada picked up with the U.S.-Mexico-Canada Agreement (USMCA), increasing from $736 million in 2020 to nearly $1.18 billion in 2024. Through the first four months of 2025, dairy exports to Canada were $467.3 million, a 25% increase from a year earlier.

Still, U.S. dairy groups have argued that Canada has not abided by tariff-rate quota obligations. Dairy groups also challenge Canada's policies regarding milk classifications.

Trump's bigger issue appeared to be the digital services tax. He added in his post. "Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately. 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. Thank you for your attention to this matter!"

Everyone was already waiting until July 9 to see what was going to happen with a range of tariffs Trump originally announced in May. According to the Wall Street Journal, Trump said the July 9 deadline is open-ended right now. "We can do whatever we want. We can extend it, we can make it shorter," Trump said at a White House news conference.

Trump has repeatedly said the U.S. is close to reaching some trade deals. Treasury Secretary Scott Bessent said Friday the administration may extend the July 9 deadline, potentially pushing it closer to Labor Day,

India is one of those key countries where the Trump administration wants a trade deal, but reports out of India indicate "agriculture remains the most contentious issue." The U.S. wants to increase sales of commodities such as corn, soybeans, wheat, sugar, dairy products and others. But India continues to balk at lowering tariffs and other barriers for those commodities.

India wants to protect its own farmers and opening up imports of commodities such as rice and wheat are considered non-starters by Indian officials, an Indian business publication stated. Soy oil, however, could be a potential product India may open up.

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on social platform X @ChrislClaytonDTN

(c) Copyright 2025 DTN, LLC. All rights reserved.