New Tensions Between the U.S. and Canada: Trump Calls Canada the “Fifty-First State”

Prof. Akbar Manoussi, Ottawa, Canada
Dec 12, 2024

Recent statements made by Donald Trump, the President-elect of the United States, published on the “Truth Social” platform, have sparked widespread reactions not only in the media but also among economic circles. In these posts, Trump referred to Canada as the “fifty-first state” of the United States and called Justin Trudeau, the Prime Minister of Canada, the “governor of Canada.”

These remarks were made following a dinner meeting with Trudeau in Florida, which focused on trade issues and tariffs.

Trump, who had previously announced his intention to impose a 25% tariff on imports from Canada and Mexico, has raised the prospect of a severe blow to the Canadian economy with this move.

In response to these statements, Trudeau described the actions as “devastating,” emphasizing that such decisions could have serious negative impacts on Canada’s economy.

From an economic perspective, Trump’s decisions will affect not only Canada but also the economy of the United States. It is essential to consider that the U.S. imports 65% of its crude oil from Canada, along with a significant amount of electricity and natural gas. These vital resources ensure the continuity of energy security and economic stability in America. Thus, any trade tensions that lead to a reduction or cessation of these resources could significantly damage the U.S. economy.

Additionally, the United States relies on Canada for imports of steel, aluminum, and a wide range of agricultural products. A reduction or halt in these imports could lead to higher prices and inflation within the United States.

Threats by Doug Ford, the Premier, province of Ontario, Canada’s most populous province, to cut off vital energy supplies (electricity, oil, and gas) to the United States, including New York, in response to Trump’s proposed tariffs, could further escalate tensions between the two countries.

The daily trade between Canada and the United States amounts to approximately 2.7 billion U.S. dollar and the annual trade volume between the two countries is about 2.7 trillion dollars. This trade volume is nearly double that of the United States’ trade with the 27 countries of European Union, underscoring the depth and importance of the economic relationship between the two nations.

These trade relations are just one aspect of deeper ties that include cooperation in security, law enforcement, environmental protection, and free trade.

Given these multifaceted and complex relationships, it is crucial that both governments avoid actions that could lead to further tensions and instead focus on maintaining and strengthening existing bonds and resolving issues through dialogue and cooperation.

In light of all these considerations, it appears that Trump’s remarks were more an impulsive attempt to attract attention rather than a thoughtfully planned diplomatic strategy.