Canada may be heading for a reality check after trying to take on both of its biggest trading partners at the same time
The Canadian government appears to be caught between “a rock and a hard place” after trying to introduce tough measures targeting both American and Chinese companies last week, analysts said.
Ottawa raised eyebrows by ordering a high-profile Chinese company to cease operations in the country due to national security concerns on Friday – the same day that US President Donald Trump announced he was breaking off trade negotiations with Canada over its proposed digital services tax.
“It’s always a risky choice to mess up relations with your biggest trade partners – Canada did with two,” said Xu Tianchen, senior China economist at the Economist Intelligence Unit. “If the US and China decide to play hardball with Canada, then it will be in trouble.”
Trump said he was terminating all trade talks with America’s northern neighbour on Friday, describing Canada as “a very difficult country to trade with” and blaming the breakdown on Canada’s digital services tax, which would impact American technology giants.
