President Donald Trump announced on social media that the United States is terminating all trade discussions with Canada as the latter moves forward with a digital services tax targeting major U.S. technology companies.
“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,” Trump stated in a post on Truth Social, adding that tariffs would soon be communicated to Canada.
This development follows a flurry of recent tariff announcements from the White House, including a new trade agreement with China and potential delays to a previously set July 8 tariff deadline.
The recent turmoil over tariffs is part of an ongoing, chaotic series of trade negotiations, which have fluctuated significantly in recent months.
Imposing higher tariffs was a key campaign promise of President Trump, who framed it as a strategy to bring manufacturing back to the United States and increase government revenue.
However, these objectives are often at odds, as increasing tariffs can also raise prices for consumers.
The digital services tax referenced in Trump’s post is scheduled to take effect on June 30, targeting multinational tech companies that generate revenue from Canadian users, commonly through advertising services.
This tax has drawn inspiration from similar measures adopted by several European nations, leading to escalating tensions between the U.S. and Canada.
During a recent G7 summit in Canada, President Trump and Canadian Prime Minister Mark Carney expressed intentions to negotiate a tariff agreement within 30 days.
Tensions have been on the rise between the two nations ever since Trump announced potential 25% tariffs on Canadian goods on his first day in office, resulting in months of retaliatory measures and strained relations.
The president has even suggested at times that Canada could become the ’51st state’, showcasing the unconventional rhetoric from his administration.
Hours after his announcement regarding Canada, Trump spoke to reporters about a potential delay in setting tariff levels for other countries by the self-imposed July 9 deadline.
Trump emphasized the flexibility of this deadline, saying, “We can extend it, we can make it shorter. I’d like to make it shorter.”
He expressed a desire to simplify the process by notifying countries of their respective tariff rates through straightforward letters.
The deadline affects many countries and follows an April 2 announcement from Trump regarding tariffs that could exceed 40%.
Shortly after, a 90-day “pause” was declared, temporarily reducing tariffs to 10%, which is set to end on July 9.
This pause has led to uncertainty about the future of tariffs post-July, raising questions about the direction of U.S. trade policy.
Although Trump suggested that longer-term tariff deals with various countries would be established during the 90-day period, only one agreement has been finalized to date with the United Kingdom.
On Thursday, Trump made headlines with a trade agreement with China, although officials later clarified that this was merely a framework and not a comprehensive agreement on tariffs or issues surrounding trade of rare earth minerals.
Commerce Secretary Howard Lutnick confirmed during an interview that China would be responsible for delivering rare earth materials, and indicated that countermeasures from the U.S. would subsequently be lifted.
China’s Ministry of Commerce corroborated that they would evaluate and approve export applications for controlled items according to their laws, while noting that the U.S. would lift a series of restrictive measures it had previously imposed.
The tariffs placed on Chinese goods have historically had the potential to destabilize global markets, with some tariffs previously reaching as high as 145%.
Just last month, U.S. and Chinese officials discussed a temporary deal to bring tariffs down to 30%, with an August 12 deadline set for reaching a more stable solution.
The high tariffs imposed by both nations have triggered market fluctuations, causing American consumers to face rising prices on everyday goods like clothing and car seats, while American farmers worry about decreased demand for their more costly food exports in China.
image source from：npr
