AFP/GettyU.S. President Donald Trump said he would “immediately” negotiate deals with Canada as the country hopes to start implementing tax policies for large tech companies.
His latest move announced on social media is because neighbors have been agreeing to a trade deal in mid-July.
After Trump sparked a trade war earlier this year, the two countries imposed tariffs on each other’s goods and threatened to use “economic power” to annex Canada.
On Friday, the U.S. president said he would end talks due to his “severe taxes” on tech companies, adding that he would announce tariffs on goods across the border next week.
“We hereby terminate all discussions on trade with Canada and will take effect immediately,” he wrote on social media.
“We will let Canada know the tariffs that they will do business with the United States of America over the next seven days.”
Canada’s 3% digital service tax has been a key point in its relationship with the United States since the law was enacted last year. The first payment will expire on Monday.
Canada’s Treasury Secretary confirmed that the country would continue to pay taxes, and he did not immediately respond to a request for comment from the BBC.
The business group estimates that this will cost U.S. companies more than $20 billion a year.
Canadian officials said they hope to resolve the issue as part of trade talks with the United States.
Hopefully the relatively warm relationship that newly elected Prime Minister Mark Carney has established with Trump may help these negotiations.
The president’s latest move has skeptical of future deals, although Trump often uses social media threats to try to gain leverage in negotiations or speed up negotiations he believes are stalled.
For example, last month he threatened to raise tariffs on goods reaching the U.S. coast from the EU, just to climb A few days later.
The United States is Canada’s top trading partner, buying more than $40 billion in goods under a long-term free trade agreement last year.
But Trump reached trade earlier this year with a 25% tariff, citing concerns about drug trafficking at the border.
New U.S. tariffs on automobiles, steel and aluminum have also joined the relationship. For example, auto parts crossed our, Mexico and Canada borders many times before they were fully assembled out of the vehicle, and this import tax threatens the supply chain.
Trump then faced widespread alerts from businesses in the United States and Canada, and exempted certain commodities, which hit the tariffs on certain U.S. products.
U.S. stocks fell on Friday after Trump said he was cutting talks.
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