US President Donald Trump has said he is cutting off trade talks with Canada “immediately” as the country looks to start enforcing a tax policy targeting big tech companies.
The latest move, which he announced on social media, comes as the neighbouring nations had been working to agree a trade deal by mid-July.
Both countries have imposed tariffs on each other’s goods after Trump sparked a trade war earlier this year and threatened to annex Canada using “economic force”.
On Friday, the US President said he was ending talks due to what he called an “egregious tax” on tech companies and added he would announce new tariffs on goods crossing the border within the next week.
“We are hereby terminating ALL discussions on Trade with Canada, effective immediately,” he wrote on social media.
“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.”
In brief comments to reporters, Prime Minister Mark Carney suggested that talks would continue.
“We will continue to conduct these complex negotiations in the best interest of Canadians,” he said.
Canada’s 3% digital services tax has been a sticking point in its relationship with the US since the law was enacted last year. The first payments are due on Monday.
Business groups estimate it will cost American companies more than $2bn a year.
Canadian officials had said they expected to address the issue as part of trade talks with the US.
There were hopes that the relatively warm relationship that newly-elected Carney has forged with Trump might help those negotiations.
The President’s latest move casts doubt on a future deal, though Trump has often used social media threats to try to gain leverage in talks or speed up negotiations he sees as stalling.
Last month, for example, he threatened to ramp up tariffs on goods arriving to US shores from the European Union, only to climb down a few days later.
