What's New
Ontario Premier Doug Ford warned on Tuesday that President-elect Donald Trump's proposed 25 percent tariffs on Canadian products would be a looming "disaster" for U.S. stocks.
Why It Matters
Ford's warning came amid escalating tensions between Canada and the U.S., fueled by Trump's assertions that American trade deficits and unchecked migration from the north are undermining U.S. interests.
Trump has threatened to impose 25 percent tariffs on all Canadian goods if Canada and Mexico do not stem the flow of migrants and fentanyl from entering the U.S. border—even though far fewer of each crosses into the U.S. from Canada than from Mexico.
Nearly $2.7 billion in goods and services cross the U.S.-Canada border daily, making Canada the top export destination for 36 U.S. states. Trump's tariff threat, Ford argued, risks destabilizing a vital trading relationship.
What To Know
In an interview with The Associated Press (AP), Ford spoke on his concerns and how the tariffs could upend industries, particularly the auto sector, where components cross the border multiple times before final assembly.
"It is so integrated. I don't even know how you separate that in the supply chain. It would be a disaster," Ford told the AP. "It will affect the market. The market will drop and we have every CEO saying that is not the way to go."
What People Are Saying
Doug Ford said the market consequences will get Trump's attention.
"I know he has many scorecards, but one is the stock market," he said.
Early Wednesday, Trump doubled down on his rhetoric, posting on Truth Social, "No one can answer why we subsidize Canada to the tune of over $100,000,000 a year? Makes no sense!," Trump posted on Truth Social.
He continued, "Many Canadians want Canada to become the 51st State. They would save massively on taxes and military protection. I think it is a great idea. 51st State!!!"
This isn't the first time Trump has floated the idea of Canada joining the U.S., but his comments follow mounting trade disputes.
Kirsten Hillman, Canada's ambassador to Washington, pointed out that the U.S had a $75 billion trade deficit with Canada last year, with much of it coming from essential energy exports.
About 60 percent of U.S. crude oil imports and 85 percent of U.S. electricity imports are from Canada.
Hillman said trade balances are something that Trump focuses on so it's important to put it into context.
"We are one-tenth the size of the United States so a balanced trade deal would mean per capita we are buying 10 times more from the U.S. than they are buying from us. If that's his metric we will certainly engage on that," Hillman told The AP.
Energy and Economic Stakes
Ford also issued a stark warning that Ontario would reconsider electricity exports to U.S. states like Michigan and New York if tariffs are enacted.
"I want to sell them more energy, more critical minerals, but I'm going to always keep every tool in our tool box available" Ford said. "We have the energy. They need the energy."
He added: "We want to sit down and explain to Trump and inform him that we aren't the enemy." And as for Mexico I want to do a bilateral trade deal directly with the U.S."
Border and Deportation Concerns
Ford also expressed deep concern over Trump's plan for mass deportations, which he characterized as "the largest in history."
To address potential spillover effects, Ontario has mobilized a contingency force of provincial police to bolster border security.
"I am extremely concerned," Ford said. "We do have a plan ready. We have hundreds of provincial police officers that are ready within hours, if not immediately, to hit the borders."
"We'll make sure that we tighten up that border like we've never seen before," Ford said, detailing plans to coordinate with local and federal authorities.
While Trump has linked his tariff proposals to stemming migration and drug trafficking, data suggests the Canadian border accounts for a fraction of these issues compared to the Mexican border.
In the last fiscal year, U.S. customs agents seized 43 pounds of fentanyl at the northern border compared to 21,100 pounds at the southern border. Migrant encounters at the Canadian border were similarly negligible, with only 23,721 reported compared to 1.53 million at the Mexican border, according to the U.S Border Patrol.
What Happens Next
While it is unclear if the tariffs will be imposed once Trump is in office, Canada is unveiling a $1 billion border initiative to stave off U.S. tariffs, including enhanced aerial surveillance and a proposed joint strike force with the U.S. to combat cross-border crime.
Public Safety Minister Dominic LeBlanc emphasized that the measures aim to showcase Canada's commitment to cooperation without bowing to pressure.
"We have a lot of work ahead of us," LeBlanc said.
This article includes reporting from The Associated Press.
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