Alberta Premier Danielle Smith discusses Canada’s investment in securing their southern border and her willingness to work with Trump on ‘The Big Money Show.’
OTTAWA, Canada – President-elect Donald Trump said, “We don’t need their cars. We don’t need their lumber. We don’t need their dairy products,” about Canada at his Mar-a-Lago news conference last week, when he repeated his annexation thoughts on the U.S.’s northern neighbor and his plan to impose on it a “serious” and “substantial” tariff, which he has said would amount to 25% on Canadian exports.
The U.S. depends on trade with Canada, which provides 60% of U.S. crude oil imports. Last July, the output reached a record 4.3 million barrels per day.
“Who has the critical minerals? We do,” said Doug Ford, the premier of Canada’s largest province, Ontario, in an interview. “Who has high-grade nickel – which the U.S. needs for manufacturing and for the military? We do.”
According to the U.S. Census Bureau, the U.S. exported more than $322 billion in goods to Canada between January and November 2024. During the same period, the U.S. imported over $377 billion in goods from Canada, resulting in a trade deficit of nearly $55 billion.
TRUMP SAYS US SUBSIDIES TO CANADA MAKE ‘NO SENSE,’ SUGGESTS CANADIANS WANT ‘TO BECOME THE 51ST STATE’
Then-President Trump, left, and Canadian Prime Minister Justin Trudeau attend the NATO summit at the Grove Hotel on Dec. 4, 2019 in Watford, England. (Dan Kitwood/Getty Images) / Getty Images)
Trump has repeatedly mentioned the U.S. subsidizing Canada, the amount of which has increased from $100 million to $100 billion to “about $200 billion a year,” as he said at his recent Mar-a-Lago news conference.
Almost $2.7 billion worth of goods and services cross the Canada-U.S. border each day, and Canada is the top export destination for 36 U.S. states. Canada deeply depends on that economic partnership, with 75% of its exports destined for the U.S., University of Ottawa international business professor Tyler Chamberlin told FOX Business.
“Trade represents 67% of Canada’s economy,” he said. By comparison, foreign trade represented 25% of the U.S. gross domestic product, or economy, in 2023, according to World Bank data.
“Anything trade-related has an amplified impact on us compared to the United States, so the proposed tariffs are concerning for Canadians,” said Chamberlin. “It would be the greatest blow of all time.” He added that Americans should be concerned too.
“Industries in the U.S. relying on supplies coming from Canada will have to charge more for their products because of any tariffs imposed on them,” said Chamberlin.
Reuters recently reported that Trump is considering the use of the International Economic Emergency Powers Act to declare a national economic emergency to justify the imposition of tariffs on Canada.
CANADA’S TRUDEAU ANNOUNCES RESIGNATION FOLLOWING PARTY PRESSURE AMID CRITICISMS OF TRUMP, BUDGET HANDLING
President-elect Donald Trump announced on Monday his intention to charge Canada, China and Mexico significant tariffs for their goods entering the United States over the flow of illegal immigrants and drugs across the border. (Allison Robbert-Pool/Getty Images / Getty Images)
The same day, Ontario’s premier pitched an idea that could stave off Trump’s planned punitive measure against Canada. Ford’s government unveiled “Fortress Am-Can,” which is intended to achieve American-Canadian “energy security and power economic growth on both sides of the border.”
Energy accounts for about a third of Canada’s trade to the U.S. The plan includes streamlining approvals for pipelines, as well as large and small modular nuclear reactors. However, Ford told FOX Business that Ontario is also ready to take retaliatory measures “that will really send a message to the U.S.” in response to the imposition of sweeping U.S. tariffs.
He and his fellow Canadian premiers will meet with Prime Minister Justin Trudeau this coming Wednesday in Ottawa to discuss next steps.
Trudeau, on Friday, told CNN if Trump moves ahead with tariffs, Canada will respond like they did when Trump put tariffs on steel and aluminum several years ago. “We responded by putting tariffs on Heinz ketchup, on playing cards, on bourbon, on Harley-Davidson’s, on things that would hurt American workers” he explained.
CBC News reported last week that retaliatory tariffs could target steel products – manufactured in key swing states of Michigan and Pennsylvania – along with orange juice made in Trump’s home state of Florida, according to a senior, unnamed Canadian government source.
Energy exports could also be used as leverage to push the incoming Trump administration from imposing tariffs against Canada.
An oil pump jack pumps oil in a field near Calgary, Alberta, Canada, on July 21, 2014. (REUTERS/Todd Korol/File Photo / Reuters Photos)
Last month, the Ontario premier threatened to cut off Ontario’s energy supply to several U.S. states, including New York, Michigan and Minnesota. According to his spokesperson, Grace Lee, Ontario powered 1.5 million U.S. homes in 2023.
Next month, Ford and his provincial and territorial colleagues will travel to Washington, D.C., and meet with U.S. lawmakers in a bid to stop the tariffs.
WHO IS PIERRE POILIEVRE? CANADA’S CONSERVATIVE LEADER SEEKING TO BECOME NEXT PRIME MINISTER AFTER TRUDEAU EXIT
Alberta Premier Danielle Smith met with Trump over the weekend.
“We had a friendly and constructive conversation during which I emphasized the mutual importance of the U.S. – Canadian energy relationship, and specifically, how hundreds of thousands of American jobs are supported by energy exports from Alberta. I was also able to have similar discussions with several key allies of the incoming administration and was encouraged to hear their support for a strong energy and security relationship with Canada” she shared on X.
Prior to the meeting, former Canadian Cabinet Minister Perrin Beatty, who recently served as president and chief executive officer of the Canadian Chamber of Commerce, said that Trudeau should have been doing what Smith and Ford have done to present Canada’s position and “build a constituency in the United States and assure that Americans are aware of how it’s in their interests to maintain a strong relationship with Canada.”
An independent expert group on Canada-U.S. relations, which Beatty co-chairs, has called for a “Canada-First” response to Trump, and that “Canada cannot simply yield to his every whim and demand,” it said in a statement.
The group said that Canada should instead press “the new administration to act in areas that are important to our country, including curbing the flow of drugs and guns from the U.S. into Canada.”
An Air Canada airplane flies in front of the downtown skyline and CN Tower as it lands at Pearson International Airport on Dec. 10, 2023 in Toronto. (Gary Hershorn/Getty Images / Getty Images)
Beyond the tariff issue, Canada needs to prepare for the renegotiation of the United States-Mexico-Canada Agreement (USMCA), the 2020 successor to the North American Free Trade Agreement (NAFTA). Beatty – who served in the Cabinet of former Canadian Prime Minister Brian Mulroney’s Progressive Conservative government that helped craft NAFTA’s predecessor, the Canada-U.S. Free Trade Agreement, with the Reagan administration – said that this time next year, the Trump White House is expected to inform Congress that it wants to renegotiate the USMCA over the next decade.
Last October, Trump said that “upon taking office,” he would notify Canada and Mexico of his “intention to invoke the six-year renegotiation provision of the USMCA that I put in,” and as he told FOX Business Network anchor Maria Bartiromo in an interview, “make it a much better deal.”
‘SHARK TANK’ STAR KEVIN O’LEARY SUPPORTS TRUMP’S IDEA TO MAKE CANADA THE 51ST US STATE: ‘POTENTIAL IS MASSIVE’
Trucks lined up at the Blue Water Bridge that connects Port Huron, Michigan and Sarnia, Canada, in Port Huron, Michigan, on Feb. 10, 2022. (Photo by JEFF KOWALSKY/AFP via Getty Images / Getty Images)
Beatty, a former Canadian foreign minister, said that Trump’s references to a trade imbalance between the U.S. and Canada is “mostly made up of our selling Canadian energy to the U.S. at a discount from world prices.”
“Instead of the U.S. subsidizing Canada by buying this energy, Canada is subsidizing the U.S. because of the failure of our government to put in the infrastructure to allow us to properly serve global markets,” said Beatty.
Beatty, who also served as Canada’s defense minister, pointed out that Canada and the U.S. are security partners in the North American Aerospace Defense Command and share a partnership in the defense industrial base. “When Mr. Trump does damage to our economy, he is also damaging the security of the United States in the process,” said Beatty.
In his view, the past should guide the future.
A Canadian Pacific Kansas City Ltd. train car at the Canadian Pacific Railway Toronto Yard in Toronto on Tuesday, Aug. 20, 2024. (Cole Burston/Bloomberg via Getty Images / Getty Images)
Beatty referred to the Tariff Act – commonly known as the Smoot-Hawley Tariff, which Congress passed in 1930 – that implemented protectionist trade policies. Canada was the first country to respond by imposing new tariffs on 16 products, accounting for about 30% of U.S. exports to Canada.
CLICK HERE TO GET THE FOX NEWS APP
“Smoot-Hawley didn’t cause the Great Depression,” said Beatty. “But it lengthened and deepened it.”
“We don’t learn from history unfortunately,” he said, “In a trade war, there are no winners. There are only losers.”
Reuters contributed to this report.
