Musar zu Dewarim 7:2

“You shall not grant them grace” (Deuteronomy 7:2). Our Rabbis, may their memory be blessed, explained [it] as do not give grace to the seven (Canaanite) nations.

Tossaphot also elaborate on this segment of the discussion in the Talmud. They understand that the Talmud's question לא סגי דלאו הכי, "isn't it sufficient that you must not collect interest from the Gentile?" means that the Torah tells us we should even pay him interest when borrowing from him? The prohibition to loan him without interest is based on Deut. 7,2 "do not give them any gifts" (Avodah Zarah 20). the Torah adds that one must lend the Gentiles money only against interest so as to weaken them economically. Should you ask why the Talmud chose to raise this query from the verse of Proverbs 28,8, seeing that that verse is only the basis for a Rabbinic injunction namely to prevent people from learning from the ways of the Gentiles? The answer is that since the Torah writes that one should charge a Gentile interest on his loan, the Rabbis felt that they could not countermand the Torah. By referring to the verse in Mishley however, the sages felt justified in banning a practice that appeared already to have been forbidden by a decree of Solomon. The reason for the prohibition of loaning to the Gentiles was to discourage trade with them and learning from their amoral ways. So far Tossaphot.