U.S. President Donald Trump has terminated all trade discussions with Canada “effective immediately.”

Trump is taking issue with Ottawa’s digital services tax, calling it a “direct and blatant attack” on his country.

“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,” Trump announced in a post on his Truth Social platform on Friday afternoon.

“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.”

Large domestic and foreign companies will have to pay a three per cent tax on certain revenue earned from engaging with Canadian online users.

The news comes as the two countries had appeared to be getting closer to some sort of trade deal.

Following the G7 meetings in Alberta earlier in July, Trump and Prime Minister Mark Carney had agreed to move forward with formal negotiations on a new Canada–U.S. economic and security agreement, aiming for a framework deal within 30 days.