Trade relations between the US and Canada sour as Trump threatens new tariffs amid ongoing tax disputes.
**Trump Halts Trade Negotiations with Canada Over Digital Tax Dispute**
**Trump Halts Trade Negotiations with Canada Over Digital Tax Dispute**
US President declares an immediate end to trade talks citing Canada's tax policy on tech firms.
Given the escalating tensions over trade policy, US President Donald Trump announced that he is terminating trade discussions with Canada "immediately." This decision follows Canada's move to enforce a digital services tax targeting major American tech companies, which Trump labelled an "egregious tax." The two countries had aimed to finalize a trade deal by mid-July, but the imposition of tariffs and escalating trade conflict since the beginning of the year have complicated negotiations.
In a social media post, Trump emphasized the finality of his decision, stating, "We are hereby terminating ALL discussions on Trade with Canada, effective immediately." He mentioned his plans to announce new tariffs on goods being imported from Canada within the week, asserting, "We have all the cards." This stance suggests a strong economic leverage over Canada, although Trump expressed a reluctance to utilize this power aggressively.
Prime Minister Mark Carney, responding to Trump's announcement, indicated that Canada would continue its negotiations, emphasizing the need to proceed for the benefit of Canadians. The digital tax, which was introduced last year, has been a contentious issue, with American companies facing potential costs exceeding $2 billion annually due to the tax.
Canadian business leaders are divided on the issue, with some urging the government to scrap the digital services tax to facilitate smoother negotiations. The President of the Business Council of Canada, Goldy Hyder, highlighted the adverse effects of the tax on US-Canada relations.
Despite the deteriorating situation, some analysts suggest that there could still be room for negotiation. Inu Malak from the Council on Foreign Relations speculated that Trump's aggressive tactics might aim to create leverage in the discussions and facilitate a future deal.
Trade relations between the two nations are critical, with the US being Canada's largest trading partner, and Trump's previous tariffs on various goods have raised significant concern among businesses on both sides. As Trump’s latest announcement caused a stir in the markets, the outcome of these trade talks remains uncertain, with significant implications for both economies as they navigate this complex relationship.
In a social media post, Trump emphasized the finality of his decision, stating, "We are hereby terminating ALL discussions on Trade with Canada, effective immediately." He mentioned his plans to announce new tariffs on goods being imported from Canada within the week, asserting, "We have all the cards." This stance suggests a strong economic leverage over Canada, although Trump expressed a reluctance to utilize this power aggressively.
Prime Minister Mark Carney, responding to Trump's announcement, indicated that Canada would continue its negotiations, emphasizing the need to proceed for the benefit of Canadians. The digital tax, which was introduced last year, has been a contentious issue, with American companies facing potential costs exceeding $2 billion annually due to the tax.
Canadian business leaders are divided on the issue, with some urging the government to scrap the digital services tax to facilitate smoother negotiations. The President of the Business Council of Canada, Goldy Hyder, highlighted the adverse effects of the tax on US-Canada relations.
Despite the deteriorating situation, some analysts suggest that there could still be room for negotiation. Inu Malak from the Council on Foreign Relations speculated that Trump's aggressive tactics might aim to create leverage in the discussions and facilitate a future deal.
Trade relations between the two nations are critical, with the US being Canada's largest trading partner, and Trump's previous tariffs on various goods have raised significant concern among businesses on both sides. As Trump’s latest announcement caused a stir in the markets, the outcome of these trade talks remains uncertain, with significant implications for both economies as they navigate this complex relationship.
