Trump cuts off US trade talks with Canada
WASHINGTON: US President Donald Trump abruptly cut off trade talks with Canada on Friday over its tax targeting US 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 US-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 US 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 US 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 US economy.
US 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 US 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.
Trump, in a post on his Truth Social media platform, called the tax "a direct and blatant attack on our country" and said Canada was a "very difficult country to TRADE with."
"Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately," Trump said. "We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven-day period."
Speaking to reporters at the White House, Trump said that the negotiations with Canada would not resume "until they straighten out their act," adding that the US holds "such power over Canada."
Canada is the second-largest US trading partner after Mexico, and the largest buyer of US exports. It bought $349.4 billion of US goods last year and exported $412.7 billion to the US, according to US Census Bureau data.
Carney's office responded to Trump's announcement by saying: "The Canadian government will continue to engage in these complex negotiations with the United States in the best interests of Canadian workers and businesses."
Bessent sought to downplay the U.S.-Canadian dispute in a CNBC interview, saying US Trade Representative Jamieson Greer would likely open a Section 301 probe into Canada's digital tax that would clear the way for tariff retaliation in the amount of harm to U.S. firms, which he said was roughly $2 billion.
The US has prepared similar retaliation against European countries that have imposed digital taxes. A USTR spokesperson did not immediately respond to a request for comment. — Reuters
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Observer
5 hours ago
- Observer
UN: GAZANS DESERVE FOOD, NOT DEATH
United Nations Secretary-General Antonio Guterres said on Friday that a US-backed aid operation in Gaza is 'inherently unsafe,' giving a blunt assessment: 'It is killing people.' He also said UN-led humanitarian efforts are being 'strangled,' aid workers themselves are starving and Israel — as the occupying power — is required to agree to and facilitate aid deliveries into and throughout the Palestinian enclave. 'People are being killed simply trying to feed themselves and their families. The search for food must never be a death sentence,' Guterres told reporters. Meanwhile, Israel's Prime Minister Benjamin Netanyahu on Friday rejected a report that the country's military commanders ordered their soldiers to fire at Palestinians seeking humanitarian aid in Gaza. Left-leaning daily Haaretz earlier quoted unnamed soldiers as saying commanders ordered troops to shoot at crowds near aid distribution centres to disperse them even when they posed no threat. 'The State of Israel absolutely rejects the contemptible blood libels that have been published in the Haaretz newspaper,' Netanyahu said in a joint statement with Defence Minister Israel Katz. Meanwhile, Gaza's civil defence agency said that Israeli forces killed at least 62 people on Friday, including 10 who were waiting for aid in the war-ravaged Palestinian territory. The reported killing of people seeking aid marks the latest in a string of deadly incidents near aid sites in Gaza, where a US- and Israeli-backed foundation has largely replaced established humanitarian organisations. Civil defence spokesman Mahmud Bassal said that 62 Palestinians had been killed on Friday by Israeli strikes or fire across the Palestinian territory. When asked for comment, the Israeli military said it was looking into the incidents and denied its troops fired in one of the locations in central Gaza where rescuers said one aid seeker was killed. Bassal said that six people were killed in southern Gaza near one of the distribution sites operated by the Gaza Humanitarian Foundation (GHF) and one more in a separate incident in the centre of the territory, where the army denied shooting 'at all'. Another three people were killed by a strike while waiting for aid southwest of Gaza City, Bassal said. — Reuters/AFP
Observer
5 hours ago
- Observer
Rwanda, DR Congo sign peace deal in US
Rwanda and the Democratic Republic of Congo signed a peace agreement on Friday in Washington to end fighting that has killed thousands, with the two countries pledging to pull back support for guerrillas — and President Donald Trump boasting of securing mineral wealth. "Today, the violence and destruction comes to an end, and the entire region begins a new chapter of hope and opportunity," Trump said as he welcomed the two nations' foreign ministers to the White House. "This is a wonderful day." The agreement comes after the M23, an ethnic Tutsi rebel force linked to Rwanda, sprinted across the mineral-rich east of the DRC this year, seizing vast territory including the key city of Goma. The deal — negotiated through Qatar since before Trump took office — does not explicitly address the gains of the M23 in the area torn by decades of on-off war but calls for Rwanda to end "defensive measures" it has taken. Rwanda has denied directly supporting the M23 but has demanded an end to another armed group, the Democratic Forces for the Liberation of Rwanda (FDLR), which was established by ethnic Hutus linked to the massacres of Tutsis in the 1994 Rwanda genocide. The agreement calls for the "neutralisation" of the FDLR, with Rwandan Foreign Minister Olivier Nduhungirehe saying the "irreversible and verifiable end to state support" to the Hutu militants should be the "first order of business." The process would be "accompanied by a lifting of Rwanda's defensive measures," Nduhungirehe said at a signing ceremony at the State Department. But he added: "We must acknowledge that there is a great deal of uncertainty in our region, and beyond because many previous agreements have not been implemented." His Congolese counterpart, Therese Kayikwamba Wagner, highlighted the agreement's call for respecting state sovereignty. "It offers a rare chance to turn the page, not just with words but with real change on the ground. Some wounds will heal, but they will never fully disappear," she said. The agreement also sets up a joint security coordination body to monitor progress and calls vaguely for a "regional economic integration framework" within three months. Trump has trumpeted the diplomacy that led to the deal, and started his White House event by bringing up a journalist who said he deserved the Nobel Peace Prize. Speaking to reporters earlier on Friday, Trump said the United States will be able to secure "a lot of mineral rights from the Congo." The DRC has enormous mineral reserves that include lithium and cobalt, vital in electric vehicles and other advanced technologies, with US rival China now a key player in securing the resources. Trump said he had been unfamiliar with the conflict as he appeared to allude to the horrors of the 1994 Rwanda genocide, in which hundreds of thousands of people, mostly Tutsis, were killed in just 100 days. "I'm a little out of my league on that one because I didn't know too much about it. I knew one thing — they were going at it for many years with machetes," Trump said. The agreement drew wide but not universal praise. UN Secretary-General Antonio Guterres called the deal "a significant step towards de-escalation, peace and stability" in the eastern DRC and the Great Lakes region. "I urge the parties to honour in full the commitments they have undertaken in the Peace Agreement... including the cessation of hostilities and all other agreed measures," Guterres said in a statement.
Observer
6 hours ago
- Observer
Another check on Trump's power fades
The Supreme Court ruling barring judges from swiftly blocking government actions, even when they may be illegal, is yet another way that checks on executive authority have eroded as President Trump pushes to amass more power. The decision will allow Trump's executive order seeking to end birthright citizenship to take effect in some parts of the country — even though every court that has looked at the directive has ruled it unconstitutional. That means some infants born to undocumented immigrants or foreign visitors without green cards can be denied citizenship-affirming documentation like Social Security numbers. But the diminishing of judicial authority as a potential counterweight to exercises of presidential power carries implications far beyond the issue of citizenship. The Supreme Court is effectively tying the hands of lower-court judges at a time when they are trying to respond to a steady geyser of aggressive executive branch orders and policies. Presidential power historically goes through ebbs and flows, with fundamental implications for the functioning of the system of checks and balances that defines American-style democracy. But it has generally been on an upward path since the middle of the 20th century. The growth of the administrative state inside the executive branch and the large standing armies left in place as World War II segued into the Cold War, inaugurated what the historian Arthur Schlesinger Jr coined the 'imperial presidency'. Presidential power waned in the 1970s, in the period encompassing the Watergate scandal and the end of the Vietnam War. Courts proved willing to rule against the presidency, as when the Supreme Court forced President Richard M Nixon to turn over his Oval Office tapes. Members of both parties worked together to enact laws imposing new or restored limits on the exercise of executive power. But the present era is very different. Presidential power began to grow again in the Reagan era and after the terrorist attacks of September 11, 2001. And now Trump, rejecting norms of self-restraint, has pushed to eliminate checks on his authority and stamp out pockets of independence within the government while only rarely encountering resistance from a Supreme Court he reshaped and a Congress controlled by a party in his thrall. The decision by the Supreme Court's conservative majority comes as other constraints on Trump's power have also eroded. The administration has steamrolled internal executive branch checks, including firing inspectors-general and sidelining the Justice Department's Office of Legal Counsel, which traditionally set guardrails for proposed policies and executive orders. And Congress, under the control of Trump's fellow Republicans, has done little to defend its constitutional role against his encroachments. This includes unilaterally dismantling agencies Congress had said shall exist as a matter of law, firing civil servants in defiance of statutory limits and refusing to spend funds that lawmakers had authorised and appropriated. Last week, when Trump unilaterally bombed Iranian nuclear sites without getting prior authorisation from Congress or making any claim of an imminent threat, one Republican, Representative Thomas Massie of Kentucky, stepped forward to call the move unconstitutional since Congress has the power to declare war. Trump reacted ferociously, declaring that he would back a primary challenger to end Massie's political career, a clear warning shot to any other Republican considering objecting to his actions. Senator Lisa Murkowski, Republican of Alaska, recently told her constituents that 'we are all afraid' of Trump. But while the immediate beneficiary of the Supreme Court's ruling is Trump, the decision also promises to free his successors from what has been a growing trend of district court intervention into presidential policymaking. In the citizenship case, the justices stripped district court judges of the authority to issue so-called universal injunctions, a tool that lower courts have used to block government actions they deem most likely illegal from taking effect nationwide as legal challenges to them play out. The frequency of such orders has sharply increased in recent years, bedeviling presidents of both parties. Going forward, the justices said, lower courts may only grant injunctive relief to the specific plaintiffs who have filed lawsuits. That means the Trump administration may start enforcing Trump's birthright citizenship order in the 28 states that have not challenged it, unless individual parents have the wherewithal and gumption to bring their own lawsuits. The full scope of the ruling remains to be seen given that it will not take effect for 30 days. It is possible that plaintiffs and lower-court judges will expand the use of class-action lawsuits as a different path to orders with a nationwide effect. Such an option, Justice Amy Coney Barrett wrote in the majority opinion, would be proper so long as they obey procedural limits for class-action cases. In a rare move that signalled unusually intense opposition, Justice Sonia Sotomayor read aloud a summary of her dissenting opinion from the bench on Friday. Calling the ruling a grave attack on the American system of law, she said it endangered constitutional rights for everyone who is not a party to lawsuits defending them. 'Today, the threat is to birthright citizenship,' she wrote. 'Tomorrow, a different administration may try to seize firearms from law-abiding citizens or prevent people of certain faiths from gathering to worship. The majority holds that, absent cumbersome class-action litigation, courts cannot completely enjoin even such plainly unlawful policies unless doing so is necessary to afford the formal parties complete relief.' She, like the other two justices who joined her dissent, is a Democratic appointee. — The New York Times Charlie Savage The writer has been writing about presidential power and legal policy for more than two decades
