Description: Canada’s Prime Minister, Mark Carney, has rescinded the Digital Tax Services Act on US tech companies operating in Canada, effectively relaunching the trade negotiations. Carney’s press secretary has confirmed that he and President Donald Trump through representatives from both countries would engage in a broad trade negotiations process which would also take on other disputable issues related to bilateral economic and strategic ties. Carney abandoned the idea after Trump’s direct threats that the US would completely cease negotiations with Canada regarding trade. Both countries over the years have developed largely dependent economies through the regional USMCA (United States, Mexico, Canada Agreement) and bilateral ties independent of the regional trade alliance.
Impact: Trump’s conditioning and overimposing foreign policy methods have once again resulted in forcing one of the US largest trade partners to succumb to pressure regarding the tariff negotiations. Carney is still trying to carefully navigate the unpredictive decisions made by the US President and reengage with the US in a broader aspect of negotiations in order to reestablish the strategic partnership ruined by the tariffs. Trump would most likely continue to abuse the economically dominant position the US possess in aspect of other trade partners and adversaries while engaging in trade talks, forcing countries to agree to demeaning concessions and damaging other aspects of multilateral relations. The recently concluded trade deal with China over their rare earth minerals exports towards the US would most probably further embolden Trump to impose conditions that operate unilaterally and solely in the national interests of the US. Carney would have to approach trade and other disputable bilateral issues with extreme caution, as Canada is currently mostly reliable on the US in terms of trade, while recent refinement of relations with Europe would also be favorable in developing a diverse strategic portfolio and lowering Canada’s dependence on trade with the US.