US President Donald Trump said he was reducing trade talks with Canada “immediately” as the country seems to start implementing a tax policy aimed at large technology companies.
The last move he announced on social media is coming as the neighboring nations worked to coordinate a trade deal by mid -July.
Both sides imposed the tariffs of the goods on each other after Trump sparked a trade war earlier this year and threatened to annex Canada using “economic power”.
On Friday, the US President said he was terminating talks because of what he calls an “outrageous tax” on technology companies and added that he would announce new rates for goods crossing the border within next week.
“We end all discussions about the trade with Canada, in force immediately,” he wrote on social media.
“We will notify Canada at the tariff that they will pay to do business with the United States of America during the next seven -day period.”
Later in the oval office, President Trump told reporters that the United States has “all cards”.
“We have such power economically over Canada. I prefer not to use it,” he added.
In short comments to reporters, Prime Minister Mark Carney suggested that the conversations would be ground.
“We will continue to conduct these complex negotiations in the best interest of the Canadians,” he said.
The tax on digital services in Canada was stopped in its relations with the United States as the law had entered into force last year. The first payments are due on Monday.
Business groups believe it will cost US companies such as Amazon, Apple and Google, more than $ 2 billion a year. Other countries have a similar tax, including the UK, France and Italy.
Canadian officials have said they are expecting to deal with the problem as part of trade conversations with the United States.
There was hope that a relatively warm connection that the newly elected Carney has built with Trump can help these negotiations.
The president's last move raises a future transaction, although Trump often uses threats on social media to try to win leverage in conversations or to accelerate the negotiations he sees as a stop.
Last month, for example, he threatened to increase the rates for goods arriving to the US coast of the European Union just to retreat A few days later.
Candace Laing, CEO of the Canadian Chamber of Commerce, which is critical of digital tax tax, said “the last -minute surprises” should be expected when the deal is approaching.
“The tone and tenor of conversations have improved in recent months and we hope to see the progress will continue,” she added.
Canadian Senator Hasan Yussuf, who sits at a Canada and US Advisory Board in front of Prime Minister Carney, told Globe and Mail that he believed Trump was trying to win a “lever” in conversations, putting pressure on Canada.
“I think we don't respond to this,” Yusf said.
Meanwhile, some of the Canada business community has called on Carney to eliminate the tax on digital services. Goldie Hyher, President of Canada Business Council, said on Friday that taxes undermine Canada's relations with the United States and he must be canceled “to return trade negotiations.”
In the G7 in mid-June, Trump and Carney had set a 30-day deadline for reaching a commercial transaction. It is unclear whether Trump's latest comments have affected this time line.
During the first term of Trump, the White House was struggling hard as many countries began to consider taxes on digital services.
But Inu Malak, an associate of commercial policy at the Council of Foreign Relations, noted that the issue was left unresolved in the trade deal that the United States and the United Kingdom reached earlier this year, which implies some flexibility.
She said Trump's threat seemed like a move to increase the pressure from his typical negotiation book – but it was also a sign that the president had diverted Canada, which could open the way for a deal.
“This provides a little opening – maybe not the one that Prime Minister Carney wanted … But this gives them a little space to speed up these conversations,” she said.
The United States is the best trading partner in Canada, which buys over $ 400 billion in goods last year under a long -term free trade agreement.
But Trump hit this trading with a new 25% tariff this year, citing concerns about border drug trafficking.
The new American car, steel and aluminum rates have also transferred relationships. The parts of cars, for example, sift us, Mexican and Canadian borders repeatedly, before the vehicle is fully assembled and such taxes on imports threaten the supply chains.
Later, Trump brought exceptions to some goods in front of a widespread business alarm in both the United States and Canada, withdrawing from its own tariffs for some US products.
Shares in the US fell on Friday after Trump said he was cutting off negotiations, but later bounced with the S&P 500 closing record high.