WASHINGTON: The White House said on Monday that Canadian Prime Minister Mark Carney had “caved” to President Donald Trump, after Canada dropped a tax on US tech firms that prompted Trump to call off trade talks.

“It’s very simple. Prime Minister Carney and Canada caved to President Trump and the United States of America,” Press Secretary Karoline Leavitt said in a daily briefing.

Leavitt said Trump “knows how to negotiate,” adding that “every country on the planet needs to have good trade relationships with the United States.” “And it was a mistake for Canada to vow to implement that tax that would have hurt our tech companies here in the United States.” Canada announced on Sunday that it would rescind taxes impacting US tech firms and said trade negotiations with Washington would resume.

The digital services tax, enacted last year, would have seen US service providers such as Alphabet and Amazon on the hook for a multi-billion-dollar payment in Canada by Monday.

But Trump, who has weaponised US economic power in the form of tariffs, abruptly said on Friday that he was ending trade talks with Canada in retaliation for the levy.

Then over the weekend Trump revived his rhetoric about wanting Canada to become the 51st US state, which had strained ties between the two countries.

“Frankly, Canada should be the 51st state, okay? It really should, because Canada relies entirely on the United States. We don’t rely on Canada,” Trump told Fox News show “Sunday Morning Futures.” The blow-up over the tech tariffs came despite what had been warming relations between Trump and Carney.

The Canadian leader came to the White House on May 6 and had a cordial meeting with Trump in the Oval Office.

They met again at the Group of Seven summit earlier this month in Canada, where leaders pushed Trump to back away from his punishing trade war. A July 9 deadline that Trump has set for countries to negotiate trade deals is now rapidly approaching before harsh tariffs kick in.

“He is going to set the rates for many of these countries if they don’t come to the table to negotiate in good faith, and he is meeting with his trade team this week to do that,” Leavitt said.

Published in Dawn, July 1st, 2025