“Blame Canada!” goes the satirical tune from the 1999 animated comedy movie “South Park: Larger, Longer & Uncut,” during which a mom rallies her small Colorado city to confront youth degeneracy.
The tune humorously shifts blame to America’s northern neighbor moderately than US authorities insurance policies, parenting failures, or media affect, declaring that “we have to type a full assault — it’s Canada’s fault.”
Many years later, US President-elect Donald Trump seems to be channeling the same power, blaming Canada for unlawful migration and drug trafficking throughout the northern border.
Weeks after profitable a second time period within the White Home, Trump threatened to impose 25% tariffs on all Canadian imports — together with automobiles and automotive components — beginning on his first day in workplace.
He has since stepped up his rhetoric, joking that Canada may even be annexed because the 51st US state. He even mocked the Canadian Prime Minister Justin Trudeau — who resigned final week amid plummeting approval rankings — by calling him the “Governor” of the “Nice State of Canada.”
Incoming President Donald Trump threatens to alter the map
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Trump bombast or menace to be tackled?
Whereas some analysts imagine the rhetoric is typical Trump bluster, his remarks have been extensively condemned by Canadian politicians and economists as Canada wasn’t a serious goal for the Republican candidate through the US election marketing campaign — in contrast to China, Mexico, BRICS and NATO.
“It got here like a bolt from the blue,” Douglas Porter, chief economist of the Financial institution of Montreal (BMO), instructed DW, referring to Trump’s assault. “There was no groundswell amongst his supporters that noticed Canada as an enormous villain … so I discover this one a bit extra unnerving.”
Porter stated Trump’s reasoning seems to be altering as he prepares to take workplace on January 20.
“Initially, there have been considerations in regards to the border, which I believe Canada could be pleased to handle. Then there was discuss in regards to the US-Canada commerce imbalance. And in his press convention the opposite day, Trump talked about imposing financial hardship on Canada,” he stated.
Canada produced greater than 1.5 million motor autos in 2023, many for the US marketImage: Chris Younger/The Canadian Press/ZUMA Press/image alliance
Regardless of championing and signing the United States-Mexico-Canada Settlement (USMCA), which took impact in 2020, Trump now says Washington’s neighbors have failed to satisfy key phrases in the accord, from border management to commerce. The deal is up for evaluation subsequent yr.
Trump “is thought to tear up his personal offers to safe even higher offers,” Tony Stillo, Director of Canada Economics on the financial advisory agency Oxford Economics, instructed DW. “Although he helped negotiate the USMCA that changed NAFTA (North American Free Commerce Settlement), he is now calling it the worst deal ever.”
The US does, nonetheless, have far worse commerce imbalances with China, Mexico, Vietnam, Germany, and Japan than with Canada, which was practically $55 billion (€53.6 billion) final yr, in accordance with the US Census Bureau.
By comparability, the US-China commerce imbalance was virtually 5 instances greater, at $270.4 billion. The US-Canada commerce imbalance has fallen by practically 30% over the previous two years. Nonetheless, it was a lot decrease earlier than the pandemic and the USMCA took impact.
Canada getting US subsidy, says Trump
Trump wrote on his Fact Social messaging platform this week that the imbalance is successfully a US subsidy to Canada, saying the world’s largest economic system “can now not undergo the huge Commerce Deficits that Canada wants to remain afloat.”
US-Canada commerce is likely one of the most in depth and built-in partnerships on the earth. Final yr, $699.4 billion of commerce was performed. Canada is the biggest marketplace for US exports, forward of Mexico, Europe and China. US exports embody vehicles, vans, automobiles and auto components in addition to fossil fuels.
The US can be Canada’s prime export vacation spot, with greater than three-quarters of outbound Canadian items and providers heading throughout the southern border. For comparability, 53% of Germany’s exports go to different European Union nations.
Crude oil makes up 1 / 4 of Canada’s exports southward, which in July 2024 reached a report 4.3 million barrels per day, in accordance with the US Power Info Administration (EIA).
Due to surplus US processing capability, the US refines the crude oil into gasoline, diesel, and jet gasoline for home use and re-export — a few of it again to Canada.
Regardless of the US being a serious oil producer, the nation imports tens of millions of barrels of crude oil from CanadaImage: Jeff McIntosh/The Canadian Press/AP Picture/image alliance
Hassle for oil and auto sectors
Danielle Smith, the premier of the oil-rich Canadian province of Alberta, warned the US could be capturing itself within the foot if Trump makes good on his threats, scripting this week on X that: “Any proposed tariffs would instantly harm American refiners and in addition make shoppers pay extra on the pumps.”
Trump’s ire has additionally focused Canada’s automotive business, which the president-elect says has shifted manufacturing throughout the northern border in recent times, leading to layoffs for American employees.
Nonetheless, North America’s auto sector is deeply built-in and components and autos usually cross the US-Canada border a number of instances throughout manufacturing.
Canadian auto executives have warned that tariffs may disrupt complicated provide chains, resulting in elevated prices and inefficiencies — spiking costs for brand new autos in each nations.
“In the event you tariff at 25% each time it [an auto part] goes throughout a border, the prices turn out to be ridiculous,” William Huggins, assistant professor at McMaster College’s DeGroote College of Enterprise, instructed DW.
Canada’s BNN Bloomberg this week cited economists as saying the US tariffs may shrink Canada’s gross home product (GDP) by 2-4% and will tip the economic system into recession.
Ottawa readies tit-for-tat measures
Canada’s ruling Liberal Celebration will not elect Trudeau’s successor till March 9. Whereas his departure leaves his nation politically rudderless, Canadian policymakers have devised a listing of US imports which may face retaliation if Trump proceeds along with his tariff plan.
The analysts DW spoke with stated Canada is prone to pursue tariffs on politically and economically delicate US merchandise because it did beneath the same commerce row with Trump in 2018 and which was resolved a yr later.
The World & Mail newspaper reported this week that Ottawa is contemplating tariffs on US metal, ceramics, glass, flowers and Florida orange juice, amongst different items.
“They [The Canadian side] have solely recognized a handful of sectors as a result of they do not need to put every little thing on the desk but to undermine their negotiating place,” Stillo stated.
However with principally bluster and outlandish threats to go on, Canada’s leaders are but to know precisely what Trump is looking for. Are his tariff threats a negotiating tactic to enhance border management, enhance power and automotive cooperation or hike Canada’s contributions to NATO?
“We’re not coping with an enlightened multi-step US coverage,” Huggins stated. “We’re coping with a bully who stated, ‘Give me your lunch cash,’ so we’re in all probability going to present them the change in our pockets.”
However regardless of the short-term disruption to each nations’ economies, the McMaster College economist thinks policymakers in Ottawa will look to play the lengthy recreation, for one apparent purpose.
“30 years from now, Donald Trump will not be alive, however Canada shall be,” Huggins instructed DW.
Edited by: Uwe Hessler
