Trump Cuts Off US Trade Talks With Canada

Source Credit : CNBC

U.S. President Donald Trump abruptly cut off trade talks with Canada on Friday over its tax targeting U.S. technology firms, saying that it was a "blatant attack" and that he would set a new tariff rate on Canadian goods within the next week.

The move plunges U.S.-Canada relations back into chaos after a period of relative calm that included a cordial G7 meeting in mid-June where Trump and Canadian Prime Minister Mark Carney agreed to wrap up a new economic agreement within 30 days.

It also came just hours after U.S. Treasury Secretary Scott Bessent struck an upbeat tone on trade, touting progress had been made with China on reviving the flow of critical minerals for the U.S. manufacturing sector and in other key tariff negotiations.

The often-chaotic rollout of Trump's import levies since his return to office this year has frequently whipsawed financial markets, and have begun to weigh on consumer spending, the bedrock of the U.S. economy.

U.S. stocks were briefly batted lower by his broadside against Canada, but the S&P 500 and Nasdaq managed to close out the week at record highs.

Trump's action comes ahead of Canada's plans to begin collecting on Monday a previously enacted digital services tax on U.S. technology firms, including Amazon , Meta, Alphabet's Google and Apple, among others.

The tax is 3% of the digital services revenue a firm takes in from Canadian users above $20 million in a calendar year, and payments will be retroactive to 2022.