US President Donald Trump said on Friday he is calling off trade negotiations with Canada in retaliation for taxes impacting US tech firms, adding that Ottawa will learn of their new tariff rate within a week.

Trump was referring to Canada's digital services tax, which was enacted last year and forecast to bring in US$4.2 billion over five years.

While the measure is not new, US service providers will be "on the hook for a multi-billion dollar payment in Canada" come June 30, noted the Computer & Communications Industry Association recently.

The three percent tax applies to large or multinational companies such as Alphabet, Amazon and Meta that provide digital services to Canadians, and Washington has previously requested dispute settlement talks over the matter.

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

He called the country "very difficult" to trade with.

Canada may have been spared some of Trump's most sweeping duties, such as a 10 percent levy on nearly all US trading partners, but it faces a separate tariff regime.

Trump has also imposed steep levies on imports of steel, aluminium and autos.

Last week, Canadian Prime Minister Mark Carney said Ottawa will adjust its 25 percent counter tariffs on US steel and aluminium – in response to a doubling of US levies on the metals to 50 percent – if a bilateral trade deal was not reached in 30 days.

"We will continue to conduct these complex negotiations in the best interest of Canadians," Carney said on Friday, adding that he had not spoken to Trump following the US president's announcement. (AFP)