President Donald Trump asserted at the World Economic Forum that the US can do without Canadian energy, vehicles, or lumber. He reemphasized the possibility of imposing tariffs on Canada unless the country becomes a state of the US to avoid them. Trump highlighted, You can always become a state, and if you're a state, we won't have a deficit. We won't have to tariff you, prompting surprised reactions from the audience in Davos.
The President has threatened tariffs of up to 25% on Canadian imports by February 1. This aggressive stance has caused concern in Canada, leading to discussions of retaliatory measures, including matching tariffs if the US proceeds.
While Canada relies heavily on exports to the US, Trump argued that the US could manage without Canadian resources, citing the nation's self-sufficiency in car manufacturing, timber, and energy production. Trump continued to assert that there is a large trade deficit with Canada, despite uncertainties about the figures.
Trump connected the tariffs to concerns over border security and integrated supply chains, hinting at the importance of Canadian cooperation in meeting security demands. Canadian Prime Minister Justin Trudeau has stated readiness to respond to any tariffs, even considering energy embargoes, while still aiming to prevent tariffs altogether.
Canada is actively lobbying against tariffs, positioning itself as a dependable trade partner and energy supplier to the US. Economists underscore the importance of Canadian energy exports for US energy security, pointing out their significant contribution to the American market.
In his address, Trump encouraged businesses to manufacture goods in the US to steer clear of tariffs, which he views as vital for the nation's economic growth, job protection, and revenue generation. He has initiated a review of US trade relationships to identify any unfair practices before April 1st.