Trump cuts off US trade talks with Canada, shattering optimism over tariff deals
US President Donald Trump has abruptly cut off trade talks with Canada over its tax targeting US technology firms, calling it a "blatant attack".
The move on Friday, local time, plunged US-Canada relations back into chaos after a period of relative calm that included a cordial G7 meeting in mid-June where Mr Trump and Canadian Prime Minister Mark Carney agreed to wrap up a new economic agreement within 30 days.
It also came just hours after US Treasury Secretary Scott Bessent struck an upbeat tone on trade, touting that progress had been made with China on reviving the flow of critical minerals for the US manufacturing sector, and in other key tariff negotiations.
The often-chaotic rollout of Mr Trump's import levies since his return to office this year has frequently whipsawed financial markets, and have begun to weigh on consumer spending, the bedrock of the US economy.
US stocks were briefly batted lower by his broadside against Canada, but the S&P 500 and Nasdaq managed to close out the week at record highs.
Mr Trump's action comes ahead of Canada's plans to begin collecting on Monday a previously enacted digital services tax on US technology firms, including Amazon, Meta, Alphabet's Google and Apple, among others.
The tax is 3 per cent of the digital services revenue a firm takes in from Canadian users above $US20 million ($30 million) in a calendar year, and payments will be retroactive to 2022.
Mr Trump, in a post on his Truth Social media platform, called the tax "a direct and blatant attack on our country" and said Canada was a "very difficult country to TRADE with".
"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."
Speaking to reporters at the White House, Mr Trump said that the negotiations with Canada would not resume "until they straighten out their act," adding that the US holds "such power over Canada".
Canada is the second-largest US trading partner after Mexico, and the largest buyer of US exports. It bought $US349.4 billion of US goods last year and exported $US412.7 billion to the US, according to US Census Bureau data.
Mr Carney's office responded to Mr Trump's announcement by saying: "The Canadian government will continue to engage in these complex negotiations with the United States in the best interests of Canadian workers and businesses."
Mr Bessent sought to downplay the US-Canadian dispute in a CNBC interview, saying US Trade Representative (USTR) Jamieson Greer would likely open a Section 301 probe into Canada's digital tax that would clear the way for tariff retaliation in the amount of harm to US firms, which he said was roughly $US2 billion.
The US has prepared similar retaliation against European countries that have imposed digital taxes. A USTR spokesperson did not immediately respond to a request for comment.
Earlier on Friday, Mr Bessent said the Trump administration's various trade deals with other countries could be done by the September 1 Labor Day holiday, citing talks with 18 top trade partners and another revision to a deal with China to reopen the flow of rare earth minerals and magnets.
After a week where tariffs took a back seat to the US strike on Iran's nuclear facilities and the massive tax and spending bill in the US Congress, the Trump administration's trade negotiations have picked up.
The US sent a new proposal to the European Union on Thursday and India sent a delegation to Washington for more talks.
"So we have countries approaching us with very good deals," Mr Bessent said on Fox Business Network.
"We have 18 important trading partners. … If we can ink 10 or 12 of the important 18, there are another important 20 relationships, then I think we could have trade wrapped up by Labor Day," Mr Bessent said.
He did not mention any changes to a July 9 deadline for countries to reach deals with the US or see tariffs spike higher, but Mr Trump said at the White House that he could extend the tariff deadline or "make it shorter".
Mr Trump said that he would notify countries of their tariff rates within the next week and a half, adding: "I'd like to just send letters out to everybody: Congratulations. You're paying 25 per cent."
Mr Bessent said the US and China had resolved issues surrounding shipments of Chinese rare earth minerals and magnets to America, further modifying a deal reached in May in Geneva.
As part of its retaliation against new US tariffs, China suspended exports of a wide range of critical minerals and magnets, up-ending supply chains central to automakers, aerospace manufacturers, semiconductor companies and military contractors around the world.
During US-China talks in May in Geneva, Beijing committed to removing the measures imposed since April 2, but those critical materials were not moving as fast as agreed, Mr Bessent said, so the US put countermeasures in place.
"I am confident now that … as agreed, the magnets will flow," Mr Bessent said, adding that these materials would go to US firms that had received them previously on a regular basis.
He later said that the US would begin shipping withheld materials to China when the rare earths shipments resumed.
China's Commerce Ministry said on Friday the two countries have confirmed details on the framework of implementing the Geneva trade talks consensus.
It said China will approve export applications of controlled items in accordance with the law. It did not mention rare earths.
Trump administration officials also held trade talks on Friday with India and Japan, two other countries in advanced negotiations with the US
The Japanese government said in a statement that the two sides will continue to work to "reach an agreement that benefits both Japan and the United States".
Reuters
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ABC News
2 hours ago
- ABC News
Rwanda and Democratic Republic of Congo sign US-mediated peace deal aimed at ending decades of bloody conflict
Rwanda and the Democratic Republic of Congo (DRC) have signed a US-facilitated peace deal intended to help end deadly fighting in eastern Congo, while also helping the US government and American companies gain access to critical minerals in the region. The agreement has provisions on territorial integrity, prohibition of hostilities and the disengagement, disarmament and conditional integration of non-state armed groups. "Today, the violence and destruction comes to an end, and the entire region begins a new chapter of hope and opportunity, harmony, prosperity and peace," US President Donald Trump told the two countries' foreign ministers at a White House meeting on Friday. The agreement was signed earlier at the State Department's Treaty Room beneath a portrait of Colin Powell, the first African-American to serve as top US diplomat. There, current Secretary of State Marco Rubio called it "an important moment after 30 years of war". Over the past few decades, the DRC has been wracked by conflict between the government and more than 100 armed groups — the most potent backed by neighbouring Rwanda — leading to the deaths of millions of people. However, while the deal could be a turning point in the struggle to end the conflict, many Congolese see it mainly as an opportunity for the US to acquire Congo's critical minerals, after their government reached out to Mr Trump for support in fighting the rebels. The US president has pushed to gain access to those minerals at a time when the United States and China are actively competing for influence in Africa. So, will this deal mark the beginning of the end of the decades-long conflict, or is it destined to fail due to the absence of a major player? With 7 million people displaced in the DRC, the United Nations has called the situation "one of the most protracted, complex, serious humanitarian crises on Earth". The conflict can be traced to the aftermath of the 1994 genocide in Rwanda, where Hutu militias killed between 500,000 and 1 million ethnic Tutsi, as well as moderate Hutus and Twa, Indigenous people. When Tutsi-led forces fought back, nearly 2 million Hutus crossed into Congo, fearing reprisals. Rwandan authorities have accused the Hutus who fled of participating in the genocide, and alleged that elements of the Congolese army protected them. They have also argued that the militias formed by a small fraction of the Hutus are a threat to Rwanda's Tutsi population. Since then, the ongoing fighting in eastern Congo has killed 6 million people, in attacks, famines and unchecked disease outbreaks stemming from the fighting. The M23 rebel group is the most prominent armed group involved in the conflict, and its major advance early this year left bodies on the streets. Rwanda is also estimated to have up to 4,000 troops in the region supporting M23, though it maintains it is simply defending its territorial interests. While signing the agreement, Congo's Foreign Minister Therese Kayikwamba Wagner invoked the millions of victims of the conflict. She expressed optimism, but stressed significant work was yet to be done in order to end the fighting. "Some wounds will heal, but they will never fully disappear," Ms Wagner said. Rwandan Foreign Minister Olivier Nduhungirehe was similarly cautious, nothing there was still a "great deal of uncertainty" because previous agreements were never implemented. "There is no doubt that the road ahead will not be easy," he said. "But with the continued support of the United States and other partners, we believe that a turning point has been reached." While the two foreign ministers appeared to be guardedly optimistic, most analysts do not believe the deal will quickly end the fighting — because rebel group M23, the most prominent of the armed groups fighting the government in Congo, says the deal does not apply to it. Asked in the Oval Office about potential violations of the agreement, Mr Trump said he didn't think that would happen but also warned of "very severe penalties, financial and otherwise", if it did. The DRC hopes the deal with Rwanda — which includes access to critical minerals for US companies — will lead the US to provide it with the security support it believes it needs to fight the rebels, and possibly get them to withdraw from the key cities of Goma and Bukavu. M23 rebels, however, say they won't abide by it as they weren't directly involved in the deal's development, though they have been part of other ongoing peace talks. Corneille Nangaa, who leads the Congo River Alliance — which includes M23 — said in March that direct peace talks with the DRC could only be held if the government acknowledges the rebels' grievances, as well as the principle that "anything regarding us which [is] done without us, it's against us". An M23 spokesperson, Oscar Balinda, echoed those sentiments to the Associated Press this week. Mr Nduhungirehe pointed to separate talks happening in Qatar that are meant to get both Congo and the M23 rebels to agree among themselves how they will end the fighting. He also said Rwanda had agreed to lift its "defensive measures", though it was not clear if he meant withdrawing troops that Rwanda has previously said were in Congo to defend its interests. The new deal is also at the heart of the US government's push to counter China in Africa. For many years, Chinese companies have been a key player in Congo's minerals sector. Chinese cobalt refineries, which account for a majority of the global supply, rely heavily on Congo. Rwanda has also been accused of exploiting eastern Congo's critical minerals, which are used in smartphones, advanced fighter jets and much more. Congo's foreign minister said the US had proven to be a "reliable partner" during the peace process, as well as during talks on other issues in the relationship between the two countries. "So there is no doubt in this moment, if you want, when it comes to the credibility of the US as a partner — be it for a peace process, where we have signed a very important agreement today, or for investment from the US," Ms Wagner said on Friday. However, analysts say the US government's commitment might depend on how much access it has to the minerals being discussed under separate negotiations between the American and Congolese governments. The mostly untapped minerals are estimated to be worth as much as $US24 trillion ($36.8 trillion) by the US Department of Commerce. Christian Moleka, a political scientist at the Congolese think tank Dypol, called the deal a "major turning point" but said it could "in no way eliminate all the issues of the conflict". "This seems like a trigger-happy proposition and cannot establish lasting peace without justice and reparation." In Congo's North Kivu province, the hardest-hit by the fighting, some believe that the peace deal will help resolve the violence — but warn justice must still be served for an enduring peace. "I don't think the Americans should be trusted 100 per cent," said Hope Muhinuka, an activist from the province. "It is up to us to capitalise on all we have now as an opportunity." ABC/AP
The Advertiser
3 hours ago
- The Advertiser
Deadly strikes in Gaza as Trump flags possible truce
At least 34 people were killed across Gaza by Israeli strikes, health staff say, as Palestinians face a growing humanitarian crisis in Gaza and ceasefire prospects inch closer. The strikes began late on Friday and continued into Saturday morning, among others killing 12 people at the Palestine Stadium in Gaza City, which was sheltering displaced people, and eight more living in apartments, according to staff at Shifa hospital where the bodies were brought. Six others were killed in southern Gaza when a strike hit their tent in Muwasi, according to the hospital. The strikes come as US President Donald Trump says there could be a ceasefire agreement within the next week. Taking questions from reporters in the Oval Office Friday, the president said, "We're working on Gaza and trying to get it taken care of." Talks have been on again, off again since Israel broke the latest ceasefire in March, continuing its military campaign in Gaza and furthering the Strip's dire humanitarian crisis. Some 50 hostages remain in Gaza, fewer than half of them believed to still be alive. They were part of some 250 hostages taken when Hamas attacked Israel on October 7, 2023, sparking the 21-month-long war. The war has killed more than 56,000 Palestinians, according to Gaza's health ministry, which does not distinguish between civilians and combatants. It says more than half of the dead were women and children. There is hope among hostage families that Trump's involvement in securing the recent ceasefire between Israel and Iran might exert more pressure for a deal in Gaza. Israeli Prime Minister Benjamin Netanyahu is riding a wave of public support for the Iran war and its achievements, and he could feel he has more space to move towards ending the war in Gaza, something his far-right governing partners oppose. Hamas has repeatedly said it is prepared to free all hostages in exchange for an end to the war, while Netanyahu says he will end the war only when Hamas is disarmed and exiled, something the group has rejected. Hungry Palestinians are enduring a catastrophic situation in Gaza. After blocking all food for two-and-a-half months, Israel has allowed only a trickle of supplies into the territory since mid-May. Palestinians have been shot and wounded while on their way to get food at newly formed aid sites, run by the American and Israeli backed Gaza Humanitarian Foundation, according to Gaza's health officials and witnesses. Palestinian witnesses say Israeli troops have opened fire at crowds heading towards the sites. Israel's military said it was investigating incidents in which civilians had been harmed while approaching the sites. At least 34 people were killed across Gaza by Israeli strikes, health staff say, as Palestinians face a growing humanitarian crisis in Gaza and ceasefire prospects inch closer. The strikes began late on Friday and continued into Saturday morning, among others killing 12 people at the Palestine Stadium in Gaza City, which was sheltering displaced people, and eight more living in apartments, according to staff at Shifa hospital where the bodies were brought. Six others were killed in southern Gaza when a strike hit their tent in Muwasi, according to the hospital. The strikes come as US President Donald Trump says there could be a ceasefire agreement within the next week. Taking questions from reporters in the Oval Office Friday, the president said, "We're working on Gaza and trying to get it taken care of." Talks have been on again, off again since Israel broke the latest ceasefire in March, continuing its military campaign in Gaza and furthering the Strip's dire humanitarian crisis. Some 50 hostages remain in Gaza, fewer than half of them believed to still be alive. They were part of some 250 hostages taken when Hamas attacked Israel on October 7, 2023, sparking the 21-month-long war. The war has killed more than 56,000 Palestinians, according to Gaza's health ministry, which does not distinguish between civilians and combatants. It says more than half of the dead were women and children. There is hope among hostage families that Trump's involvement in securing the recent ceasefire between Israel and Iran might exert more pressure for a deal in Gaza. Israeli Prime Minister Benjamin Netanyahu is riding a wave of public support for the Iran war and its achievements, and he could feel he has more space to move towards ending the war in Gaza, something his far-right governing partners oppose. Hamas has repeatedly said it is prepared to free all hostages in exchange for an end to the war, while Netanyahu says he will end the war only when Hamas is disarmed and exiled, something the group has rejected. Hungry Palestinians are enduring a catastrophic situation in Gaza. After blocking all food for two-and-a-half months, Israel has allowed only a trickle of supplies into the territory since mid-May. Palestinians have been shot and wounded while on their way to get food at newly formed aid sites, run by the American and Israeli backed Gaza Humanitarian Foundation, according to Gaza's health officials and witnesses. Palestinian witnesses say Israeli troops have opened fire at crowds heading towards the sites. Israel's military said it was investigating incidents in which civilians had been harmed while approaching the sites. At least 34 people were killed across Gaza by Israeli strikes, health staff say, as Palestinians face a growing humanitarian crisis in Gaza and ceasefire prospects inch closer. The strikes began late on Friday and continued into Saturday morning, among others killing 12 people at the Palestine Stadium in Gaza City, which was sheltering displaced people, and eight more living in apartments, according to staff at Shifa hospital where the bodies were brought. Six others were killed in southern Gaza when a strike hit their tent in Muwasi, according to the hospital. The strikes come as US President Donald Trump says there could be a ceasefire agreement within the next week. Taking questions from reporters in the Oval Office Friday, the president said, "We're working on Gaza and trying to get it taken care of." Talks have been on again, off again since Israel broke the latest ceasefire in March, continuing its military campaign in Gaza and furthering the Strip's dire humanitarian crisis. Some 50 hostages remain in Gaza, fewer than half of them believed to still be alive. They were part of some 250 hostages taken when Hamas attacked Israel on October 7, 2023, sparking the 21-month-long war. The war has killed more than 56,000 Palestinians, according to Gaza's health ministry, which does not distinguish between civilians and combatants. It says more than half of the dead were women and children. There is hope among hostage families that Trump's involvement in securing the recent ceasefire between Israel and Iran might exert more pressure for a deal in Gaza. Israeli Prime Minister Benjamin Netanyahu is riding a wave of public support for the Iran war and its achievements, and he could feel he has more space to move towards ending the war in Gaza, something his far-right governing partners oppose. Hamas has repeatedly said it is prepared to free all hostages in exchange for an end to the war, while Netanyahu says he will end the war only when Hamas is disarmed and exiled, something the group has rejected. Hungry Palestinians are enduring a catastrophic situation in Gaza. After blocking all food for two-and-a-half months, Israel has allowed only a trickle of supplies into the territory since mid-May. Palestinians have been shot and wounded while on their way to get food at newly formed aid sites, run by the American and Israeli backed Gaza Humanitarian Foundation, according to Gaza's health officials and witnesses. Palestinian witnesses say Israeli troops have opened fire at crowds heading towards the sites. Israel's military said it was investigating incidents in which civilians had been harmed while approaching the sites. At least 34 people were killed across Gaza by Israeli strikes, health staff say, as Palestinians face a growing humanitarian crisis in Gaza and ceasefire prospects inch closer. The strikes began late on Friday and continued into Saturday morning, among others killing 12 people at the Palestine Stadium in Gaza City, which was sheltering displaced people, and eight more living in apartments, according to staff at Shifa hospital where the bodies were brought. Six others were killed in southern Gaza when a strike hit their tent in Muwasi, according to the hospital. The strikes come as US President Donald Trump says there could be a ceasefire agreement within the next week. Taking questions from reporters in the Oval Office Friday, the president said, "We're working on Gaza and trying to get it taken care of." Talks have been on again, off again since Israel broke the latest ceasefire in March, continuing its military campaign in Gaza and furthering the Strip's dire humanitarian crisis. Some 50 hostages remain in Gaza, fewer than half of them believed to still be alive. They were part of some 250 hostages taken when Hamas attacked Israel on October 7, 2023, sparking the 21-month-long war. The war has killed more than 56,000 Palestinians, according to Gaza's health ministry, which does not distinguish between civilians and combatants. It says more than half of the dead were women and children. There is hope among hostage families that Trump's involvement in securing the recent ceasefire between Israel and Iran might exert more pressure for a deal in Gaza. Israeli Prime Minister Benjamin Netanyahu is riding a wave of public support for the Iran war and its achievements, and he could feel he has more space to move towards ending the war in Gaza, something his far-right governing partners oppose. Hamas has repeatedly said it is prepared to free all hostages in exchange for an end to the war, while Netanyahu says he will end the war only when Hamas is disarmed and exiled, something the group has rejected. Hungry Palestinians are enduring a catastrophic situation in Gaza. After blocking all food for two-and-a-half months, Israel has allowed only a trickle of supplies into the territory since mid-May. Palestinians have been shot and wounded while on their way to get food at newly formed aid sites, run by the American and Israeli backed Gaza Humanitarian Foundation, according to Gaza's health officials and witnesses. Palestinian witnesses say Israeli troops have opened fire at crowds heading towards the sites. Israel's military said it was investigating incidents in which civilians had been harmed while approaching the sites.
News.com.au
6 hours ago
- News.com.au
Rwanda, DR Congo sign peace deal in US after rebel sweep
Rwanda and the Democratic Republic of Congo signed a peace agreement Friday in Washington to end fighting that has killed thousands, with the two countries pledging to pull back support for guerrillas -- and President Donald Trump boasting of securing mineral wealth. "Today, the violence and destruction comes to an end, and the entire region begins a new chapter of hope and opportunity," Trump said as he welcomed the two nations' foreign ministers to the White House. "This is a wonderful day." The agreement comes after the M23, an ethnic Tutsi rebel force linked to Rwanda, sprinted across the mineral-rich east of the DRC this year, seizing vast territory including the key city of Goma. The deal -- negotiated through Qatar since before Trump took office -- does not explicitly address the gains of the M23 in the area torn by decades of on-off war but calls for Rwanda to end "defensive measures" it has taken. Rwanda has denied directly supporting the M23 but has demanded an end to another armed group, the Democratic Forces for the Liberation of Rwanda (FDLR), which was established by ethnic Hutus linked to the massacres of Tutsis in the 1994 Rwanda genocide. The agreement calls for the "neutralization" of the FDLR, with Rwandan Foreign Minister Olivier Nduhungirehe saying the "irreversible and verifiable end to state support" to the Hutu militants should be the "first order of business." The process would be "accompanied by a lifting of Rwanda's defensive measures," Nduhungirehe said at a signing ceremony at the State Department. But he added: "We must acknowledge that there is a great deal of uncertainty in our region, and beyond, because many previous agreements have not been implemented." His Congolese counterpart, Therese Kayikwamba Wagner, highlighted the agreement's call for respecting state sovereignty. "It offers a rare chance to turn the page, not just with words but with real change on the ground. Some wounds will heal, but they will never fully disappear," she said. The agreement also sets up a joint security coordination body to monitor progress and calls vaguely for a "regional economic integration framework" within three months. - Trump takes credit - Trump has trumpeted the diplomacy that led to the deal, and started his White House event by bringing up a journalist who said he deserved the Nobel Peace Prize. Speaking to reporters earlier Friday, Trump said the United States will be able to secure "a lot of mineral rights from the Congo." The DRC has enormous mineral reserves that include lithium and cobalt, vital in electric vehicles and other advanced technologies, with US rival China now a key player in securing the resources. Trump said he had been unfamiliar with the conflict as he appeared to allude to the horrors of the 1994 Rwanda genocide, in which hundreds of thousands of people, mostly Tutsis, were killed in just 100 days. "I'm a little out of my league on that one because I didn't know too much about it. I knew one thing -- they were going at it for many years with machetes," Trump said. The agreement drew wide but not universal praise. UN Secretary-General Antonio Guterres called the deal "a significant step towards de-escalation, peace and stability" in the eastern DRC and the Great Lakes region. "I urge the parties to honour in full the commitments they have undertaken in the Peace Agreement... including the cessation of hostilities and all other agreed measures," Guterres said in a statement. The landmark agreement was also praised by the chairman of the African Union Commission. Mahmoud Ali Youssouf, who witnessed the signing of the deal in Washington, "welcomed this significant milestone and commended all efforts aimed at advancing peace, stability, & reconciliation in the region," a statement said. But Denis Mukwege, a gynecologist who shared the 2018 Nobel Peace Prize for his work to end the DRC's epidemic of sexual violence in war, voiced alarm about the agreement, saying it effectively benefited Rwanda and the United States. The deal "would amount to granting a reward for aggression, legitimizing the plundering of Congolese natural resources, and forcing the victim to alienate their national heritage by sacrificing justice in order to ensure a precarious and fragile peace," he said in a statement ahead of the signing. Physicians for Human Rights, which has worked in the DRC, welcomed the de-escalation but said the agreement had "major omissions," including accountability for rights violations.
