U.S. president-elect Donald Trump was asked about Ontario Premier Doug Ford’s recent warning that the province could cut off energy exports to about 1.5 million Americans if Trump lays threatened tariffs on Canada next month, saying Thursday it was “fine.”
On Wednesday, following a meeting between premiers and Prime Minister Justin Trudeau, Ford said he believed there was a “100 per cent” chance 25-per-cent tariffs threatened by Trump would be imposed in January on Canada. Ford countered with a threat of his own: to “cut off” millions of American residents living in border states from Ontario’s energy exports.
“That’s OK if he does that, that’s fine,” Trump told a CNBC reporter on the floor of the New York Stock Exchange. “The United States is subsidizing Canada, it’s truly a subsidy and we shouldn’t have to do that.”
Trump claimed the U.S. subsidizes Canada more than US$100 billion a year, though he did not specify where that number came from and made similar remarks in 2018.
Subsidies are defined by the International Monetary Fund as “a transfer of resources from a government to a domestic entity without an equivalent contribution in return.”
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The IMF notes subsidies can “take many forms, including direct grants to domestic companies, tax incentives, or favorable terms for financing.”
It’s not clear if Trump’s claims relate to trade deficits, which is when a country buys more than it sells to another country, or direct investment, either.
The Office of the U.S. Trade Representative says that “the U.S. goods and services trade deficit with Canada was $53.5 billion in 2022.”
Statistics Canada says that direct investment from Canada into the U.S. in 2023 was $1.1 trillion while U.S. direct investment in Canada was $618.2 billion.
“In 2023, Canada’s exports of services to the United States increased 7.2% to $107.2 billion, while imports of services from the United States advanced 8.7% to $121.0 billion,” Statistics Canada also said last month.
Shortly after his re-election, Trump threatened to impose 25-per cent tariffs on all imported goods from Canada and Mexico if both countries do not address illegal immigration and fentanyl trafficking into the U.S.
Since then, Ford and Canada’s premiers have held meetings with the federal government to discuss potential responses, with Trudeau sharing an “overview” Wednesday of his government’s plan to strengthen border security in response to the tariff threat.
Sources outlined four potential measures from Ford that Ontario could pursue to Global News:
- Restricting electricity exports to Michigan, New York and Minnesota — each of which share a border with Ontario
- Restricting exports of Canadian critical minerals required for electric vehicle batteries and supply chain
- Restricting U.S.-based companies from the Government of Ontario’s procurement process
- Restricting the LCBO, the largest purchaser of alcohol in the world, from buying American-made alcohol
Sources in the Ford government describe the measure as “escalation maneuvers” that are still being fleshed out.
—with files from Global News’ Colin D’Mello, Isaac Callan and Sean Boynton
© 2024 Global News, a division of Corus Entertainment Inc.
