The President of the United States, Donald Trump, announced on Friday the immediate end of all trade negotiations with Canada, after accusing the Canadian government of "directly and blatantly attacking our country" by imposing a new tax on digital services.
He did it, as is customary, through a message posted on his Social Truth network, where he stated that the measure will affect American tech giants such as Amazon, Apple, and Google.
"Obviously, they are copying the European Union," Trump wrote in his post, "and that will have consequences."
The official announced that within seven days he will reveal the new tariffs that the United States will impose on imports from the neighboring country.
The trigger for this escalation has been Ottawa's plan to implement, starting Monday, a 3% tax on the profits earned in Canada by large digital platforms.
Trump called the measure "an insult" and justified the break by stating that Canada is "a country that's very difficult to trade with," recalling that for years it has imposed tariffs of up to 400% on U.S. dairy products.
This is not the first trade dispute between the two countries since Trump's return to the White House.
At the beginning of the year, the president already imposed tariffs on Mexican and Canadian products, citing the inaction of both governments regarding irregular immigration and fentanyl trafficking.
Although after a conversation with then-Canadian Prime Minister Justin Trudeau those measures were eased, the tension has remained latent.
Trump's decision comes at a time of turmoil within his own trade policy.
While Treasury Secretary Scott Bessent has acknowledged that deadlines for closing agreements with other countries could be pushed back until September, the president adds further uncertainty by stating that he might “shorten or extend” the timelines as he sees fit.
Canada, whose largest trading partner is the United States, has previously responded with retaliatory tariffs to similar measures. Furthermore, it has firmly stated that it is not for sale following Trump's proposal to annex it as the 51st state of the country.
The impact of this new rupture could be significant, both for bilateral relations and for economic stability in North America, at a time when the free trade agreement (USMCA) is still in place, albeit with increasing tensions.
Frequently Asked Questions About the Trade Breakdown Between the United States and Canada
Why did Donald Trump suspend trade negotiations with Canada?
Donald Trump suspended trade negotiations with Canada due to the imposition of a new 3% tax on digital services by the Canadian government, which affects American tech companies such as Amazon, Apple, and Google. Trump regarded this measure as a "direct attack" on the United States.
What are the possible economic consequences of this trade break between the United States and Canada?
The trade rupture can have significant consequences for economic stability in North America. Canada, being the largest trading partner of the United States, could respond with retaliatory tariffs, which would affect several industries and could increase the prices of basic goods. Furthermore, these tensions could negatively influence the USMCA, generating uncertainty in the markets.
What measures has Canada taken in response to Trump's actions?
Canada has announced a 25% tariff on U.S. products in retaliation to Trump’s trade measures. Additionally, it has strengthened its border security and appointed a "fentanyl czar" to combat drug trafficking. It has also filed complaints with the WTO and the USMCA against the United States.
How has this situation affected diplomatic relations between Canada and the United States?
Tensions between the two countries have significantly increased, with mutual accusations and retaliatory measures. Trump has even threatened to destroy the Canadian automotive industry if Canada does not agree to be annexed by the U.S., which Trudeau has firmly rejected. These actions have created an atmosphere of mistrust and have hindered diplomatic negotiations.
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