President Donald Trump has now reportedly announced the termination of trade discussions with Canada, citing the impending implementation of a new tax on U.S. technology companies as the primary reason for his decision.
In a post on his Truth Social platform, Trump described the Canadian tax as a “direct and blatant attack” on American interests.
The tax, which will impose a 3% levy on companies earning over $15 million from Canadian internet users, is set to take effect soon, with the first payments due on June 30.
This move has been met with significant backlash from U.S. tech firms, with industry representatives estimating that the tax could cost American companies up to $3 billion.
Trump characterized Canada as “a very difficult country to trade with” and emphasized that the new tax was unacceptable. “Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,” he declared.
He further indicated that the U.S. would announce new tariffs on Canadian goods in response to this tax within the next week.
Historically, Canada has been a vital trading partner for the United States, ranking as the second-largest source of imports. Currently, the U.S. imposes a 25% tariff on non-USMCA goods from Canada, along with a 10% tariff on energy products.
Moreover, Canada has been significantly impacted by Trump’s 50% tariffs on steel and aluminum imports, making it the largest foreign supplier of these materials to the U.S.
In response to Trump’s announcement, the office of Canadian Prime Minister Mark Carney did not immediately provide a comment. This lack of response highlights the escalating tensions between the two nations over trade issues.
Last week, Canada’s Finance Minister had stated that the implementation of the digital services tax would proceed as planned, despite ongoing discussions with U.S. officials.
This decision underscores Canada’s commitment to pursuing its own economic policies, even in the face of potential repercussions from the U.S.
As Trump’s administration navigates this contentious landscape, the implications of halting trade talks could reverberate throughout both countries’ economies.
The decision reflects a broader trend of increasing friction over trade policies, particularly as nations grapple with the evolving challenges of the global economy. With major industries at stake, the fallout from this trade dispute may have lasting effects on U.S.-Canada relations in the months to come.
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