Canadian prime minister Mark Carney has responded to President Donald Trump's allegation that he has launched an attack on the US.
Since the 60-year-old unlikely win at the polls toward the end of April, tensions had cooled between the North American neighbors - with a likely explanation being that the 79-year-old Republican respects the former banker, with Trump being a businessman.
However, the two nations have been trying to broker a trade deal that will work for both countries, but as talks were ongoing Canada introduced a digital services tax which will hit companies including Amazon, Google, Meta, Uber and Airbnb with a three percent levy on revenue from Canadian users.
It will apply retroactively, leaving US companies with a $2 billion (£1.4 billion) bill due at the end of the month.
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Reacting to the news, Trump took to Truth Social yesterday (June 27) to slam the Canadian Government for its introduction, claiming it was an 'attack' on America.
"We have just been informed that Canada, a very difficult Country to TRADE with, including the fact that they have charged our Farmers as much as 400% Tariffs, for years, on Dairy Products, has just announced that they are putting a Digital Services Tax on our American Technology Companies, which is a direct and blatant attack on our Country," his post read.
"They are obviously copying the European Union, which has done the same thing, and is currently under discussion with us, also. Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately.
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"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. Thank you for your attention to this matter!"
In response, roughly an hour later, Carney was asked about the claim - to which the cool-headed PM responded rather bluntly: "We'll continue to conduct these complex negotiations in the best interests of Canadians."
With Trump later hitting back again, telling reporters in his Oval Office: “Economically we have such power over Canada. We’d rather not use it.
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"It’s not going to work out well for Canada. They were foolish to do it."
When asked if Canada could do anything to restart talks, he suggested Canada could remove the tax and predicted it will, but said: “It doesn’t matter to me.”
Daniel Beland, a political science professor at McGill University in Montreal, said it is a domestic tax issue, but it has been a source of tensions between Canada and the US for a while because it targets US tech giants.
“The Digital Services Tax Act was signed into law a year ago so the advent of this new tax has been known for a long time,” Mr Beland said. “Yet, President Trump waited just before its implementation to create drama over it in the context of ongoing and highly uncertain trade negotiations between the two countries.”
Topics: Canada, Donald Trump, Mark Carney, Politics
Joe Yates