Canada is playing a ‘risky’ game with tough moves against US and China: analysts
World

Canada is playing a ‘risky’ game with tough moves against US and China: analysts

Economy World



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.

But Canada has already had to abandon the tax policy to get relations with Washington back on track, and its problems could be exacerbated if Beijing chooses to take action over the national security ban, underlining the difficulties Ottawa faces as it tries to manage relations with the two powers amid a global trade war.

“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.

Just two days later, the Canadian government announced it had rescinded the digital services tax – which was due to go into effect on Monday – and that discussions with Washington had resumed over a potential trade deal.

Leave a Reply

Your email address will not be published. Required fields are marked *