Quotulatiousness

January 9, 2025

Trump plays fast and loose with numbers over US/Canadian trade

Filed under: Cancon, Economics, Media, Politics, USA — Tags: , , , , — Nicholas @ 03:00

On her Substack, Tasha Kheiriddin refutes some of the big numbers US President-elect Donald Trump has been using in his “make Canada the 51st state” campaign:

US President-elect Donald Trump successfully trolled Justin Trudeau about Canada becoming the 51st state of the union.

“We don’t need their cars. … We don’t need their lumber”, Trump said. “We have massive fields of lumber … We don’t need their dairy products. We have more than they have.”

This is, of course, a giant lie. Canada has plenty of things America needs, including raw materials like oil and food that it refines and transforms. That transformation generates millions of well-paying US industrial and manufacturing jobs. The US also imports nearly $5 billion in fertilizer to boost agricultural production.

And if we don’t have anything America needs, why would Trump want to annex us? Because, he claims, the US trade deficit with Canada is a “subsidy.” Trump asks, “Why are we losing $200 billion dollars a year and more to protect Canada?”

This is a second lie. First of all, trade deficits are not subsidies. A trade deficit represents the difference in the value of imports and exports. Second, the US trade deficit with Canada isn’t $200 billion, or even the $100 billion figure Trump has previously used. In 2023, according to the US Bureau of Economic Analysis, it was $USD 41 billion. And if you remove energy exports, the US actually runs a surplus with us, not a deficit. Energy exports accounted for over $177 billion of Canada’s exports south of the border. Twenty-eight per cent of what we export is energy, namely, over four million barrels per day of oil, the largest amount from any country in the world.

Trump is correct that Canada has benefitted from the American military’s umbrella. We benefit by proximity, because we happen to be next to the US – just like Americans benefit from buying our discounted crude oil, because they happen to be next to us. The US would maintain their military whether we were neighbours or not. They wouldn’t have a smaller military if they annexed Canada; if anything, they’d spend more, because they would be actively engaged across our entire landmass, directly defending our borders. We have also been a steadfast ally in times of war, a fact Trump handily omits.

So Trump’s argument is a lie, but a clever lie. It’s something that will resonate with his voters, with the average American struggling to pay their bills. It’s purportedly about fairness, doing what’s right. Not taking over a sovereign nation, but returning to Americans what’s rightfully theirs.

It’s like Putin saying that the Donbas is full of Russians, so it really should be part of Russia. Or Xi Jinping saying that Taiwan is really part of China, so the two countries should be “reunified”.

It’s also cover for the real reason Trump would like to take over Canada: because we do have a lot of what the US needs, namely oil, water, and critical minerals. He would love to take control of the Arctic, ostensibly for security reasons, but really for the resources that lie beneath. Drill, baby, drill. But Trump can’t say that part out loud, because then he sounds like a communist dictator, not the leader of the free world.

Trump wants to use tariffs to break Canada. Our GDP could drop by two to four per cent and put us in an official recession. Two and half million jobs would be at risk. People would get poorer at a time when two million of us are already using food banks. Throw in a simultaneous diet of pro-annexation propaganda pumped out by Trump’s friends on social media, and the blathering of front groups funded by vested interests, and the 13% of Canadians who favour joining the US could swell to the point where they put political pressure on Ottawa to cave to Trump’s demands.

And then, all bets are off. Trump figures Canadians will beg to join the US, and he may not be wrong. Manifest destiny, achieved — and a YUGE legacy for him.

In the National Post, Carson Jerema wishes the Canadian media would calm the hell down and recognize that Trump is still trolling the heck out of them:

So it turns out Donald Trump doesn’t really want to annex Canada. Seriously. Anyone who watched his news conference Tuesday, and not just the short clip shared on social media, should come away assured, as much as one can be with Trump anyway, that his comments about this country becoming the 51st state really are little more than trolling. Certainly, the U.S. president-elect repeatedly musing about absorbing Canada has never been funny, and the words themselves undermine Canadian sovereignty, but nothing Trump said Tuesday was much different than what he’s been saying for weeks.

Yes, I’m aware that we are supposed to be in crisis mode at Trump’s latest musings, which the Toronto Star called “explosive”, and the Globe and Mail referred to as an “escalation”. Even the National Post’s Wednesday front page played up the president-elect’s comments. A similar response came from Prime Minister Justin Trudeau, who posted on social media that “There isn’t a snowball’s chance in hell” that Canada would merge with the U.S., and Conservative Leader Pierre Poilievre, who posted that “Canada will never be the 51st state. Period”.

As is so often the case, what Trump actually said is less exciting than the reaction it generated.

When asked by a reporter if he was “considering military force to annex and acquire Canada?” Trump responded, “No. Economic force because Canada and the United States, that would really be something. You get rid of that artificially drawn line and you take a look at what that looks like and it would also be much better for national security.”

That response is the sum total of the so-called “escalation”.

It is, at a brief glance, easy to see why so many felt compelled to react the way they did to the president-elect’s comments, but it was the reporter, not Trump, who used the word “force” first, and getting “rid” of the border could mean any number of arrangements, short of a merger. Beyond that, however, there isn’t much in the way of a new development in the supposed annexation crisis of 2025.

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