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Donald Trump mentioned the US was “terminating” commerce talks with Canada in retaliation in opposition to a brand new digital companies tax on tech corporations, reigniting a bitter North American commerce struggle after months of détente.
“Canada, a really troublesome Nation to TRADE with . . . has simply introduced that they’re placing a Digital Providers Tax on our American Expertise Firms, which is a direct and blatant assault on our Nation,” the US president posted on his Reality Social platform on Friday.
“Based mostly on this egregious Tax, we’re hereby terminating ALL discussions on Commerce with Canada, efficient instantly,” Trump added.
The president mentioned he would set a brand new tariff fee on Canadian imports “inside the subsequent seven day interval”.
Friday’s announcement plunges the 2 nations again right into a commerce struggle, bringing an abrupt finish to a interval of extra cordial relations that adopted the election of Mark Carney as Canadian prime minister in March.
Carney — who was propelled to the premiership on a surge of anti-US sentiment — sought to reset relations with Washington that had grown strained beneath his predecessor Justin Trudeau. Early conferences between the pair proved pleasant, however Trump’s outburst threatens to undo the progress.
A spokesperson for Carney mentioned on Friday that they had been reviewing Trump’s put up “concurrently everybody” and would reply quickly.
The Canadian greenback fell on Trump’s assertion as merchants reacted to the recent escalation of the commerce dispute, leaving it down 0.7 per cent in opposition to the US greenback on the day. The S&P 500 additionally fell from its highs of the day, however the blue-chip index remained up about 0.3 per cent.
Canada hosted Trump on the G7 summit earlier this month. Following their talks, Carney posted on X that the 2 international locations had “agreed to pursue negotiations in the direction of a deal inside the coming 30 days”.
Trump’s broadside comes after Canadian finance minister François-Philippe Champagne mentioned this month that Ottawa was “going forward” with plans for a digital companies tax regardless of the misgivings of the Trump administration.
The measure would hit tech teams with a 3 per cent levy on income earned from Canadian customers and has been opposed by Silicon Valley.
International corporations resembling Meta, Netflix and Amazon, in addition to native companies, should file a return for the tax by the tip of the month or face a high-quality.
Trump additionally hit out at Canadian agricultural coverage, a long-standing space of rivalry between the international locations courting again to the president’s first time period.
“They’ve charged our Farmers as a lot as 400% Tariffs, for years, on Dairy Merchandise,” he wrote in his Reality Social put up on Friday.
Canada lately handed laws on “provide administration” measures to guard its dairy business by way of worth setting and manufacturing quotas — a system described by Trump in 2017 as a “shame”.
Trump’s return to workplace sparked a tit-for-tat commerce struggle between Washington and Ottawa after he introduced sweeping 25 per cent tariffs on Canadian items. These levies had been later amended with carve-outs for items coated by the USMCA commerce deal, however new sectoral tariffs on metal and aluminium have hit Canada arduous.
The commerce acrimony — alongside the president’s menace to annex Canada because the 51st US state — has triggered a surge of resentment north of the border.
Canadian business teams slammed the digital companies tax on Friday and urged the federal government to scrap it as a way to placate Trump.
“For a few years, we’ve warned that the implementation of a unilateral digital companies tax may threat undermining Canada’s financial relationship with its most vital buying and selling accomplice, america,” mentioned Goldy Hyder, president of the Enterprise Council of Canada. “That unlucky growth has now come to go.”
