Former President Donald Trump made headlines just last month when he called for new tariffs on Canadian goods. He pointed out that the economic relationship between the U.S. and Canada has fundamentally changed. As for the auto and energy sectors, he doubled down on his often stated theme that U.S. no longer needs Canadian products. He furthermore suggested raising import duties on vehicles imported from Canada.
Similarly, in a jaw-droppingly brave prediction, Trump declared that Canada would be “no longer a country” without U.S. economic assistance. He articulated this view while discussing his administration’s trade policies and tariffs, which have been a contentious point in U.S.-Canada relations. Trump stated, “We don’t really want Canada to make cars for us, to put it bluntly. We want to make our own cars.”
Trump’s administration preceded this by unilaterally slapping a 25% tariff on all automobile imports into the United States. They had imposed additional, unrelated 25% tariffs on many other Canadian products. In fact, he went so far as to express his dismay over an existing trade deficit with Canada. He noted that his approach has really transformed their relationship over the last 40 years.
“So when I put tariffs on Canada, they’re paying 25%, but that could go up in terms of cars. When we put tariffs on, all we’re doing is we’re saying, ‘We don’t want your cars in all due respect.’” – Trump
While he acknowledged that discussions with Canadian officials, including former Bank of Canada Governor Mark Carney, have been productive, Trump has dialed back previous threats about making Canada the 51st state. He pointed out that he’s “getting along famously with Canada,” by which he implied the conversation continues on that front, even if the tensions are more subcutaneous.
Between the lines, Trump’s rhetoric reveals the more profound belief that the U.S.-Canada economic relationship has really changed and possibly for good under his watch. He’s long been aufait with the idea that Canada’s economy is far too reliant on U.S. purchases. He certainly bolstered this impression with his recent comments.
He was unapologetic and bold, offering a stirring vision of the kind of independent American economy he would create. He most certainly didn’t pull punches in advancing his notions. Trump emphasized that the U.S. could sustain itself without relying on Canadian goods, further asserting that “we can give ourselves far more than Donald Trump can ever take away,” a statement attributed to Carney.
The action taken by the former president should draw a comment on the incoming Canadian election. Instead, he’s rolling up his sleeves to tackle trade negotiations and economic development. His comments have opened up a floodgate of discussion between economists and policymakers alike on what such tariffs would do to both countries’ economies.
As U.S.-Canada relations become increasingly strained over U.S. trade policies, the future of this important binational collaboration is unclear. Trump’s position is a clear pivot away from bilateral cooperation toward a more insular economic strategy. His administration’s approach raises questions about the potential impacts on the automotive industry and other sectors reliant on cross-border trade.
