American President Donald Trump dealt another blow to Canada on Thursday, calling the longtime ally “difficult to deal with” and saying the United States didn’t need Canadian oil and gas.
Speaking virtually at the World Economic Forum in Davos, Switzerland, Trump also said he would pressure NATO members to increase their defense spending target to 5 percent of GDP, more than triple Canada’s current spending.
Trump said his administration would “demand respect from other nations” that trade with the United States and quickly addressed his growing feud with Canada.
“Canada has been very difficult to manage over the years, and it’s not fair that we have a $200 billion or $250 billion (trade) deficit,” Trump told the Davos crowd during a discussion led by several financial executives.
“We don’t need them to make our cars, and they make a lot of them. We don’t need their wood because we have our own forests. We don’t need their oil and gas. We have more than anyone.
Trump also returned to his oft-repeated idea of making Canada the 51st American state.
“As you probably know, I say you can still become a state,” he said. “So if you’re a state, we won’t have a deficit, we won’t have to impose tariffs on you, et cetera, et cetera.”
Trump has already threatened to use “economic force” to force a merger with Canada, arguing earlier this month that the United States did not “need” highly traded products like automobiles, lumber and dairy products from Canada – despite the chains of highly integrated supply chains solidified by the free trade agreement that was renegotiated during his first term. term.
Prime Minister Justin Trudeau highlighted the importance of this trade relationship to journalists during Thursday’s Liberal caucus meeting.
“Donald Trump announced that he wanted a ‘golden age’ for the American economy,” Trudeau said. “That means they will need more energy, more minerals, more steel and aluminum, more lumber, more concrete and more things that Canada gives them. already sends as a reliable and trustworthy partner.”
The U.S. Trade Representative says the trade deficit in goods and services with Canada stood at US$53.5 billion in 2022. Canada sells more raw materials, particularly oil and gas, to the United States. United States than it buys, the United States transforming these materials into goods that it sells in Canada. and many other countries.
Trump used the trade deficit to justify imposing 25 percent tariffs on all Canadian imports, which he announced his intention to do on February 1.
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Despite efforts to secure an exclusion for oil and gas, Alberta Premier Danielle Smith said she “does not expect any exemptions” for her province’s crude exports after met with Trump at his Mar-a-Lago resort in Florida shortly before his inauguration. Monday.
Economists have warned A tariff on Canadian energy exports will drive up gasoline prices for Americans and threaten Trump’s plans for “energy dominance.”
Trump signed an executive order on his first day in office that promises to “unleash America’s affordable and reliable energy and natural resources” by expanding drilling on federal lands and processing and refining of raw materials, including essential minerals.
He also declared a “national energy emergency” to accelerate energy projects.
Trump says increased oil production would put downward pressure on energy costs, thereby reducing inflation.
“We have more oil and gas than anyone,” he told the Davos crowd, calling it “liquid gold beneath our feet.”
The United States is already the world’s largest oil producer, averaging 13.2 million barrels per day last year. But it gets more than half of its crude oil from Canada, and many U.S. refineries depend on the product.
Canadian officials have sought to pitch an intensified energy partnership to U.S. lawmakers and Trump administration officials in an attempt to get the U.S. president to back down from his tariff threat.
But they also warned that “everything is on the table” in the event of Canadian retaliation – including stopping energy exports, something Smith has publicly disavowed.
Smith said Wednesday, after a meeting with Trudeau and other prime ministers, that discussions about a response to Trump’s tariffs were “more positive” than they were a week earlier: when she refused to sign a joint declaration on a unified approach which did not exclude a reduction in energy exports.
She said the premiers agreed to explore more oil and gas pipelines to bring products to Canada and export them to other markets, and to “obtain the consent of each province before removing or impose export tariffs on the main exports of these provinces.”
“Alberta will continue to oppose such extreme measures on our energy exports,” she said in an article on X.
Trudeau reiterated Thursday that “everything is on the table” if Trump’s tariffs are maintained, but that any Canadian response will see the measures “gradually intensified with one goal… figuring out how to remove (the tariffs) as quickly as possible “. »
Trump told the Davos crowd Thursday that his tariffs on other countries “will direct hundreds of billions of dollars, if not trillions of dollars, into our treasury.”
He also threatened to impose tariffs of 25 percent on Mexico and 10 percent on China, and launched tariffs on the European Union and even Russia to force an end to the war in Ukraine.
Trump reiterates push for NATO defense spending target to be raised to 5%
Trump said Thursday he was pushing Russian President Vladimir Putin to begin negotiations with Ukraine to end the war.
He also reiterated his desire to increase NATO’s minimum defense spending target from 2 percent of GDP to 5 percent, but said he would ask members to meet that threshold.
“I will also ask all NATO countries to increase their defense spending to 5 percent of GDP, which it should have been years ago,” he said. “It was only 2 percent, and most countries didn’t pay until I arrived.”
Trump later expressed doubts about U.S. involvement in the alliance itself.
“I’m not sure we should spend anything, but we should definitely help them. Asset ” he told reporters after signing several executive orders in the Oval Office. “We protect them. They don’t protect us.
Canada has long fallen short of NATO’s target, spending less than 1.4 percent of its GDP on defense last year. The government’s defense policy update sets a 2030 horizon to reach 1.76 percent.
Trudeau promised to reach 2 percent by 2032, but the parliamentary budget officer expressed doubts as to whether this plan is feasible.
“We will continue to work with our NATO partners to ensure that we do everything necessary to keep Canada safe,” the prime minister said Thursday.
“Canada has strong assets to invest in protecting the North and protecting Canadians in a complex world. »
Liberal MP Yvan Baker told reporters outside Thursday’s caucus meeting that he wants Canada’s defense spending to be “much higher than it is now” but that he doesn’t would not commit to reaching 5 percent or any other figure.
“I think we should exceed 2 percent,” he said.
Karina Gould, Government House Leader and Liberal Party leadership candidate, noted that U.S. defense spending is currently less than five percent.
The United States spent 3.38 percent of its GDP on defense last year, according to NATO. The alliance’s top spending country in 2024, Poland, spent 4.12 percent of its GDP.