Donald Trump Cuts Ties with Canada, Threatens New Tariffs: Another Battle in the Trade Wars
Trade negotiations between the U.S. and Canada halted - Tariffs on the table - Trade negotiations with Canada halted by Trump, potential tariffs loom large
Hey there! Let's dive into the latest news about trade relations between the US and Canada.
Bad news for our neighbors up north — ex-Prez Donald Trump has severed all trade negotiations with Canada and is threatening to impose fresh tariffs on Canadian imports. The magnitude of these tariffs will be communicated to Canada within the week, as Trump recently announced on his Truth Social platform.
Why the ruckus? Trump isn't too pleased about Canada's plans to introduce a digital tax targeting business dealings with US corporations. He calls it a "direct attack" on the US and accuses Canada of copying the EU, which has already implemented this type of tax. Ongoing talks between the US and the EU aim to settle this matter.
You might think Canada's just following the crowd here: they introduced a new digital services tax (DST) over a year ago, even during Joe Biden's time as US President. This DST requires large domestic and foreign companies to cough up a 3% tax on certain revenues derived from Canadian users. The idea is to tax digital companies where they make their profits, in this case, across the border in the US.
By the way, Canada relies heavily on the US as its most significant trading partner.
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Oh, and if you're curious about the current state of play with tariffs on Canadian goods, here's a quick recap:
- Back in March 2025, the US imposed tariffs on Canadian goods, which triggered Canadian retaliatory tariffs on US goods [3].
- The US has kept these tariffs in place, and Canada continues to enforce reciprocal tariffs on various US consumer and industrial goods [3].
- Despite tensions, trade talks between the US and Canada have been terminated as of late June 2025, with no imminent resolution or tariff removals on the horizon [1].
- In addition, no rollback of tariffs on Canadian goods has been indicated since the talks ended [2].
In a nutshell, the tariffs on Canadian imports remain in effect, with no immediate plans for a resolution. The trade war between the two countries continues, with tariffs acting as leverage [1][2][3]. Stay tuned for more updates on this developing story!
- Tensions between the US and Canada escalate as Donald Trump, a former US President, accuses Canada's employment policy of being influenced by EU politics, specifically their employment policy on digital taxes, which he deems a "direct attack" on US corporations.
- Meanwhile, the EC countries, including the EU, are engaged in ongoing discussions with the US to settle this issue, shedding light on the intricate complexities of world trade relations and the intertwined nature of employment and trade policies among neighboring nations.
