Former President Donald Trump has misrepresented the truth about Canada’s approach to trade, military spending, and banking ties. These comments come just a day before his meet up with the Canadian Prime Minister. These bold statements have caused many analysts and subject matter experts to raise their eyebrows over the inconsistencies in his assertions.
Trump’s remarks started when he went off script to rant about Canada’s tariff on dairy products. He incorrectly accused Canada of applying low tariffs to just one carton of milk brought into the country from the U.S. In practice, Canada erects high tariff barriers on virtually every other dairy product. His comments come as tensions between the two nations continue to surge over intensifying US-Sino trade relations.
Trump claimed to have worked out the dairy-tariff imbroglio before exiting office. He was direct in blaming President Joe Biden, suggesting that the administration should let Canada “just keep raising it. This assertion has been met with skepticism, as experts indicate that trade negotiations are complex and cannot be attributed solely to one administration.
Misleading Trade Deficit Claims
One of Trump’s oldest and most persistent protectionist claims is that the United States has a “$200 billion” trade deficit with Canada. This number is not backed up by credible national data. Canada’s federal statistics agency reported that the trade deficit amounts to $70.6 billion in goods and services trade, significantly lower than Trump’s assertion.
In his effort to win praise during those speeches, Trump seriously inflated Canada’s dependence on U.S. trade. He said it was so because Canada does “95% of their business” with the United States. This figure appears to be grossly exaggerated, as hard science shows that the true percentage is closer to 1.5 percent.
“We subsidize Canada to the tune of $200 billion a year.” – Donald Trump
Additionally, in a bid to emphasize Canada’s tariff rates, Trump claimed that Canada is “ONE OF THE HIGHEST TARIFFING NATIONS ANYWHERE IN THE WORLD.” However, this assertion contradicts available data. In 2022, Canada’s trade-weighted average tariff rate was only 1.37%. This rate is significantly lower than the United States’ rate of 1.49%. Additionally, Canada came in at 102nd place on a World Bank ranking of 137 countries on trade-weighted average tariff rates.
Military Spending and Defense Claims
Trump also made false claims regarding Canada’s military spending, asserting that Canada spends “less money on military than practically any nation in the world.” He went on to assert that Canadians pay less to NATO than any other country. These claims ignore the reality that Canada is currently deployed in NATO operations and meets its defense obligations.
“And by the way, Canada, they spend less money on military than practically any nation in the world. They pay NATO less than any nation.” – Donald Trump
That it makes Canada “practically” the lowest military spender in NATO doesn’t bear out. In real dollars, Canada is spending more on its defense budget and continues to be committed to meeting its NATO obligation of 2 per cent. In response, military experts have warned that such deceptive pronouncements erode credibility and damage confidence between allies.
Banking Relations and Agricultural Trade
In a second round of statements, Trump falsely asserted that Canada bans U.S. banks from doing business in Canada. This assertion is flat-out wrong. U.S. banks have been doing business in Canada for more than a century, further deepening the financial connections between our two nations.
Additionally, Trump asserted that Canada does not accept U.S. agricultural products, saying “they don’t take our agricultural product for the most part.” This statement could not be more misleading. In 2024, Canada will be the second-largest market for U.S. agricultural exports, buying nearly $28.4 billion of U.S. products.
“they don’t take our agricultural product for the most part.” – Donald Trump
Though this data is flawed, analysts say the U.S.-Canada economic relationship is as strong as ever. The two countries have historically reveled in their close trade ties and cooperation across a wide array of sectors.
