Tensions between the U.S. and Canada flared after Canadian Prime Minister Mark Carney announced a 3% digital services tax on major U.S. tech companies like Amazon and Google—retroactive to 2022. The move could’ve cost American firms nearly $2 billion.

Former President Donald Trump didn’t hold back. In a fiery Truth Social post, he called the tax a “blatant attack” on the U.S. and announced the immediate suspension of trade talks, warning of looming tariffs on Canadian goods.

The fallout was swift. Trump doubled down in interviews, calling Canada “foolish” and warning of economic consequences. U.S. lawmakers also pushed back, calling the tax “discriminatory” and urging action.

In a surprise reversal, Canada backed down just one day before the tax payments were due. In a Sunday night statement, Carney said the tax would be paused “in anticipation” of a renewed trade deal with the U.S.

Though brief, the clash showed how fragile trade relations can be—even between allies.