Trump cancels trade talks with Canada | Forexlive

So much for that. CAD down sharply.

Trump’s message:

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. 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. 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!

Canada and the US had laid out at the start of last week a 30-day period to make a deal.

I imagine this is all theatre as Trump lays the groundwork for a deal. Canada is obviously prepared to drop this tax if the US drops tariffs.

USD/CAD is up 87 pips to 1.3727 after touching 1.3758.

Risk sentiment is worsening on several fronts after this message with the S&P 500 trimming its gain to 21 points. It will be an interesting finish to see if it can hold the record high of 6147 into the close (last at 6162).

There have been rumblings this week of a lack of progress on US-Canada trade talks in part due to Trump’s insistence on tariffs but I have a strong belief that this is an effort for Trump to get the best terms possible and get Canada to accept some kind of baseline tariffs or tariffs on steel products.

It’s long been known that the Canadian digital services tax was scheduled to go into effect in July.