Washington: President Donald Trump said Friday that he’s suspending trade talks with Canada over its plans to continue with its tax on technology firms, which he called “a direct and blatant attack on our country.” Trump, in a post on his social media network, said Canada had just informed the US that it was sticking to its plan to impose the digital services tax, which applies to Canadian and foreign businesses that engage with online users in Canada. The tax is set to go into effect Monday.
“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately. We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period,” Trump said in his post.
Canadian Prime Minister Mark Carney said his country would “continue to conduct these complex negotiations in the best interests of Canadians. It’s a negotiation.” Trump’s announcement was the latest swerve in the trade war he’s launched since taking office for a second term in January. Progress with Canada has been a roller coaster, starting with the US president poking at the nation’s northern neighbour and repeatedly suggesting it would be absorbed as a US state.
Carney visited Trump in May at the White House, where he was polite but firm with Trump. Trump last week travelled to Canada for the G7 summit in Alberta, where Carney said that Canada and the US had set a 30-day deadline for trade talks.
The digital services tax will hit companies including Amazon, Google, Meta, Uber and Airbnb with a 3 per cent levy on revenue from Canadian users. It will apply retroactively, leaving US companies with a USD 2 billion US bill due at the end of the month.
Canada and the US have been discussing easing a series of steep tariffs Trump imposed on goods from America’s neighbour.
The Republican president earlier told reporters that the US was soon preparing to send letters to different countries, informing them of the new tariff rate his administration would impose on them.
Trump has imposed 50 per cent tariffs on steel and aluminum as well as 25 per cent tariffs on autos. He is also charging a 10 per cent tax on imports from most countries, though he could raise rates on July 9, after the 90-day negotiating period set by him would expire.
Canada and Mexico face separate tariffs of as much as 25 per cent that Trump put into place under the auspices of stopping fentanyl smuggling, though some products are still protected under the 2020 US-Mexico-Canada Agreement signed during Trump’s first term.
