Trump trade war escalates as raging US president warns he'll block deal with Canada
President Donald Trump has reignited a trade war with Canada by saying he will suspend trade talks over plans to tax tech firms, which he called a “direct and blatant attack” on the United States. A furious Trump announced on Friday he would end negotiations with the Canadians “effective immediately” in a statement on his TruthSocial platform.
Trump’s statement read: “We have just been informed that Canada, a very difficult Country to TRADE with, including the fact that they have charged our Farmers as much as 400% Tariffs, for years, on Dairy Products, has just announced that they are putting a Digital Services Tax on our American Technology Companies, which is a direct and blatant attack on our Country.”
The American leader added that he thought Canada was “obviously copying the European Union” which he said had done the same thing, adding: “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.
The new Canadian tax on tech firms is due to come into effect on Monday. It will hit companies including Amazon, Google, Meta, Uber, and Airbnb with a 3% levy on revenue from Canadian users. The tax will apply retroactively, leaving US companies with a $2 billion bill due at the end of the month.
Trump’s verbal broadside against Canada is the latest salvo in trade disputes which have been rumbling since he took office at the White House in January.
The US President has previously suggested Canada could be absorbed into the US and become the 51st state. He also referred to the previous Canadian Prime Minister, Justin Trudeau, as a “governor”.
Trudeau’s successor, Mark Carney, said on Friday that his country would “continue to conduct these complex negotiations in the best interests of Canadians. It’s a negotiation.”
But Trump later doubled down on his comments on social media, telling reporters in the Oval Office that Canada was “foolish” to push forward with the tax on tech firms.
He said: “Economically we have such power over Canada. We’d rather not use it. It’s not going to work out well for Canada. They were foolish to do it.”
When asked if Canada could do anything to restart talks, he suggested Canada could remove the tax, predicted it will but said, “It doesn’t matter to me.”
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.
Matt Schruers, chief executive of the American Computer & Communications Industry Association, said US firms backed Trump’s hardline stance against the new tax. He said: “We appreciate the Administration’s decisive response to Canada’s discriminatory tax on US digital exports.”
About 60% of US crude oil imports are from Canada, and 85% of US electricity imports as well. Canada is also the largest foreign supplier of steel, aluminum and uranium to the U.S. and has 34 critical minerals and metals that the Pentagon is eager to obtain.
About 80% of Canada’s exports go to the US.