The US is Canada’s top trade partner, buying more than $400bn in goods last year under a longstanding free trade agreement.

But Trump hit that trade with a new 25% tariff earlier this year, citing concerns about drug trafficking at the border.

New US tariffs on cars, steel and aluminium have also scrambled relations. Car parts, for example, cross US, Mexican and Canadian borders multiple times before a vehicle is completely assembled and such import taxes threaten supply chains.

Trump later carved out exemptions for some goods in the face of widespread alarm from businesses in both the US and Canada, which has hit back with tariffs of its own on some US products.

Shares in the US fell on Friday after Trump said he was cutting off talks, but later bounced back with the S&P 500 closing at a record high.

Video Transcript:

so this particular uh tiff fight disagreement whatever you want to call it started in 2019 under the reign of the idiot king Justin Trudeau It was bad policy then it’s bad policy now It’s causing a major rift at 3% tax on tech companies operating in Canada Um you know this whole thing between Canada and United States the whole thing’s stupid There should be no tariffs in either direction Here’s why These these jurisdictions these geographies are joined You don’t have to sell the country You don’t have to merge the countries But Canada has all the power the water the paper the minerals rare earths everything And the US has the largest market There should be no tariffs in any direction north south east west It’s a unique situation And you do that to create wealth for both countries to fight off China We’re in a war with China because China’s coming over the north So the whole idea of all this crapola is a waste of time And so really um I look at this saying it’s just more negotiation It’s irrelevant It’s going to get worked out But the whole thing’s stupid You know there’s still a tariff on on butter coming out of Vermont at 200% going into Quebec How stupid is that it’s all stupid It’s all stupid And at the end of the day that’s why they got rid of the idiot king They put a new prime minister in place and he’s trying to fix things But the Canadian economy has been decimated zero GDP growth massive debt It took 9 years to wipe it out But the idiot king is gone and there’s a new guy now and he’s got to get this thing worked out fast This bill and I’ve been following it closely as many have you know House to Senate back and forth This bill has to get passed primarily because it puts in place something very important for the economy the tax platform And so there’s a lot of bells and whistles including what she’s complaining about Everybody has a beef with the bill but in the end everybody knows this thing has to pass I’d prefer to see it done by July 4 It may last longer but there’s no way on earth this isn’t getting passed There’s lots of elements in it that have everybody you know fighting for their peace but this is this is the bill It’s got to get passed And so you know whether it’s salt or whether it’s her issues Okay Everybody has to give up something and that’s what’s going on But I’m very optimistic and so is the market by the way the ultimate index that this thing is going to get put through And it’s very important that it does You may not like the $2 trillion deficit but if we can grow the economy then we get rid of that by growing out of it And so nothing’s perfect in these bills but this is the unique thing about Trump and many people don’t like it is he wants this done in front of the cameras And so you’re getting to watch sausage being made and a lot of people are uncomfortable but this bill is a giant piece of sausage It’s a piece of meat and you’re going to be eating it soon after it’s finished 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 neighboring 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 7-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 such as Amazon Apple and Google more than $2 billion 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 use 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 Candace Lang chief executive of the Canadian Chamber of Commerce which has been critical of the digital services tax said that lastminute surprises should be expected as the deadline for a deal approaches The tone and tenor of talks has improved in recent months and we hope to see progress continue she added During Trump’s first term the White House fought hard as many countries began considering taxes on digital services But Enumalac fellow for trade policy at the Council on Foreign Relations noted that the issue was left unresolved in the trade deal the US and the UK reached earlier this year suggesting some flexibility She said Trump’s threat seemed like a move to ramp up pressure out of his typical negotiating playbook but was also a sign the president had refocused on Canada which could open the way for a deal It does provide a bit of an opening Maybe not the one that Prime Minister Carney wanted but it does provide some space for them to hasten those talks She said the US is Canada’s top trade partner buying more than $400 billion in goods last year under a long-standing free trade agreement But Trump hit that trade with a new 25% tariff earlier this year citing concerns about drug trafficking at the border New US tariffs on cars steel and aluminium have also scrambled relations Car parts for example cross US Mexican and Canadian borders multiple times before a vehicle is completely assembled and such import taxes threaten supply chains Trump later carved out exemptions for some goods in the face of widespread alarm from businesses in both the US and Canada which has hit back with tariffs of its own on some US products Shares in the US fell on Friday after Trump said he was cutting off talks but later bounced back with the SNP500 closing at a record high If you enjoyed today’s video don’t forget to give it a thumbs up and share your thoughts in the comments below Make sure to subscribe and click the notification bell so you never miss out on our latest content