Canada is considering retaliatory tariffs on U.S. goods, including orange juice, toilets and certain steel products, if President-elect Donald Trump proceeds with his proposed 25 percent tariff on all Canadian imports, a senior official familiar with the discussions said Thursday to The Associated Press.
Why It Matters
Trump has threatened to implement a 25 percent tariff on all goods from Canada if the country does not clamp down on immigration and the flow of drugs across its border with the U.S.
The president-elect has also repeatedly suggested Canada and Greenland, an autonomous territory of Denmark, could join the U.S. He's even gone so far as to suggest Canada could become the 51st state of the U.S.
What To Know
During his Trump's first term, his tariff hikes prompted swift retaliation from other nations. In 2018, Canada imposed billions of dollars in new duties on U.S. goods in response to increased taxes on Canadian steel and aluminum.
Trump claimed this week that the U.S. has no need for Canadian goods, including automobiles, lumber and dairy products. However, the auto industry's supply chains tell a different story with parts produced in Ontario being used in cars assembled in Detroit and later sold back to Canada.
Doug Ford, premier of Canada's most populous province, pushed back against Trump's assertion that the U.S. does not rely on Canadian goods, calling it misinformed. Nearly a quarter of the oil consumed daily in the U.S. comes from Canada with Alberta alone exporting 4.3 million barrels per day. According to the U.S. Energy Information Administration, the U.S. uses approximately 20 million barrels daily while producing about 13.2 million barrels domestically.
Canada ranks as the top export destination for 36 U.S. states, with nearly CAD $3.6 billion (USD $2.7 billion) in goods and services exchanged across the border daily.
The list of potential retaliatory tariffs remains incomplete, according to the official, who spoke on condition of anonymity to The Associated Press due to a lack of authorization to discuss the matter publicly.
Florida, Trump's adopted home state, is a major hub for citrus production, including orange juice.
What People Are Saying
Dominic LeBlanc, Canada's finance minister previously responded to Trump's talk of making Canada part of the U.S., saying: "The joke is over...It's a way for him, I think, to sow confusion, to agitate people, to create chaos knowing this will never happen."
Canadian Immigration Minister Marc Miller dismissed Trump's comments about annexing Canada as "ridiculous."
"There is no chance of us becoming the 51st state. I think that this is beneath a president of the United States," Miller said. "I said a few weeks ago that this whole thing was like a South Park episode."
What's Next
The changes of Canada becoming part of the U.S. in the foreseeable future are remote at best. However, the president-elect's escalating rhetoric could signal a coming decline in U.S.-Canada relations, while his plan to impose across-the-board tariffs on all foreign goods is likely to have a major effect on trade.
This article includes reporting from The Associated Press.
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