Why President Trump terminated trade talks with Canada

President Trump said that he terminated trade talks with Canada over what he called an egregious digital-services tax on US tech companies. This puts relations with America’s 2nd largest trading partner back in turmoil.

Posting on Truth Social Friday afternoon, the President said the U.S. will let Canada know what their tariff rate will be in the next week. The trade talks blowup comes only a week after the president met with Canadian Prime Minister Mark Carney at the Group of Seven economic summit in Alberta. 

“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 president wrote.

“They are obviously copying the European Union, which has done the same thing, and is currently under discussion with us, also. Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately.”

The post came shortly after Mr. Trump told reporters in a press conference at the White House that he will soon be sending letters to countries with whom trade talks aren’t going well, and tell them what their tariff rate is. 

U.S. goods trade with Canada totaled roughly $762 billion last year, according to the office of the U.S. trade representative. Following Trump’s announcement, the S&P 500 and the Nasdaq Composite both turned negative, retreating from the record highs they had reached earlier in the day.

As has been the case for a while, President Trump is likely looking for leverage on Canada to cut a deal. Whether he will be successful after the continuous back and forth in his words and actions towards Canada is up in the air.