Trump Sides With Meta in Growing Clash Over Canada’s Digital Tax Policy

It appears Mark Zuckerberg may finally be reaping some return on his strategic alliance with U.S. President Donald Trump — though perhaps not in the way Meta might have envisioned.
President Trump has announced the suspension of all trade discussions with Canada, in retaliation for what he describes as unfair taxes imposed by the Canadian government on U.S. tech giants, particularly Meta.
At the heart of this latest standoff is Canada’s "Online News Act," introduced in 2023. The legislation was designed to force major digital platforms, like Meta and Google, to compensate local publishers for news content shared on their services. Both companies argued the measures were out of step with today’s news ecosystem and refused to comply. In response, Meta pulled all Canadian news outlets from its platforms — a ban that remains in effect.
To recoup what it viewed as lost revenue opportunities for domestic publishers, Canada introduced an additional "Digital Services Tax" last year. The law imposes a 3% tax on local earnings exceeding $20 million for digital services operating in the region. The first payments under this tax are due next week.
Trump, seizing on this as an affront to American interests, took to Truth Social to announce the U.S. would halt all trade negotiations with Canada, accusing the country of copying the European Union in targeting U.S. tech companies with what he called "egregious" taxes. He further warned Canada to expect retaliatory tariffs within a week.
It remains to be seen how impactful Trump’s intervention will be. The Canadian government appears unlikely to reverse course, and Meta’s Canadian news ban effectively sidestepped the "Online News Act" costs. Yet the White House’s action, no matter how belated, is exactly the kind of muscular backing Meta has hoped to secure by aligning itself with Trump’s second administration.
For Zuckerberg and Meta, the real battleground remains Europe. EU regulators have fined Meta an average of $1 billion annually over the past several years, largely under the bloc’s sweeping Digital Services Act. Zuckerberg has framed these fines as a de facto tariff targeting U.S. innovation and has repeatedly called for the U.S. government to step in.
Earlier this year, senior U.S. officials, including FCC chairman Brendan Carr and Vice President JD Vance, criticized the EU’s regulatory regime, with Carr describing the DSA as fundamentally at odds with American free speech values. Trump himself has threatened tariffs on European imports but has yet to translate those threats into policy.
In this light, Trump’s crackdown on Canada may be more symbolic than substantive — a convenient punching bag in an already tense trade relationship. But for Meta, it offers a glimpse of the political backing it hopes will soon turn toward Brussels, where the stakes, and the potential penalties, are far higher.
Whether Trump will follow through on those threats against Europe remains to be seen. But as Meta continues to battle rising regulatory pressure overseas, any sign of U.S. resolve will likely be welcomed in Menlo Park — even if it means enduring the fallout from supporting one of the most polarizing political figures in modern history.
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