Donald Trump has given Canada two months notice: Fix the border or get whacked with tariffs, huge tariffs. Trump announced on his Truth Social platform that he will sign an executive order to bring in across-the-board tariffs on Canadian goods.
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The threat is bigger than the 10%-20% threat of tariffs Trump had campaigned on, and the threat comes from issues that have nothing to do with Chinese dumping.
“As everyone is aware, thousands of people are pouring through Mexico and Canada, bringing crime and drugs at levels never seen before,” the president-elect posted.
“On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% tariff on all products coming into the United States, and its ridiculous open borders.”
While illegal immigration from Canada to the United States pales in comparison to what happens on the Mexican-American border, the numbers have been rising.
Over the period from October 2023 to the end of September 2024, border patrol agents apprehended close to 20,000 people crossing in the Swanton Sector – more than in the previous 17 years combined. That sector runs from the Quebec-New Hampshire border, across the Vermont-Quebec border and then over the top of New York State to where the St. Lawrence River meets Lake Ontario.
Trump’s new border czar, Tom Homan, comes from western New York, just south of Kingston, and knows the Canada-U.S. border well.
“There’s very little river patrol or lake patrol or road patrol, and so they had been overrun, and the problem with the northern border is a huge national security issue,” Homan told a Watertown, N.Y., TV station in an interview just after he was appointed.
He also noted more than twice as many people on terror watch lists have been apprehended crossing into the United States from Canada than from Mexico. And while fentanyl isn’t a drug that is often seized crossing in from the north, Canada has long been a source of cocaine, marijuana and other drugs, a fact Homan is well aware of.
Trump clearly has an agenda with the tariff threat; he wants action.
“This tariff will remain in effect until such time as drugs, in particular fentanyl, and all Illegal aliens stop this invasion of our country! Both Mexico and Canada have the absolute right and power to easily solve this long simmering problem,” Trump said, adding that failure to act will result in both countries paying a big price.
If Trump were to act on this, and there is no reason to believe he is bluffing, it would cause immense devastation to the Canadian economy.
An analysis by TD economics of Trump’s earlier tariff threat predicted that under a 10% tariff “Real GDP would fall around 2.4 ppts over two years.” This threat is 2 1/2 times bigger and would sink Canada into a deep recession.
Thankfully, there is a warning and a chance to act to avoid the tariffs, because on something like this, turning to enacting our own tariffs wouldn’t have the desired effect, our pain would be much bigger than theirs.
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Earlier on Monday, Ontario Premier Doug Ford issued a letter to Prime Minister Justin Trudeau — signed on behalf of all of Canada’s premiers — asking for a meeting “to discuss a Team Canada approach to engaging with the incoming administration, including on trade, secure borders, energy, defence and the strength of our cross-border supply chains.”
After Trump’s threat, Ford posted to social media that the need for a meeting was even more urgent now.
There is a problem of drugs, crime and people crossing the border in both directions. The Biden administration had raised issues with the Trudeau government months ago, there was no action.
Now, we face an incoming administration that isn’t interested in playing nice. Trump only wants to see results.
What’s worrisome for Canada is it’s doubtful that the Trudeau government can deliver anything that will save us and our economy from the pain that is coming.