President-elect Donald Trump’s threat of a 25% tariff on all Canadian goods entering the U.S. as of his first day in office has to be taken seriously. Seventy-eight percent of our exports (and about 42% of our economy) are based on trade with the U.S.
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China’s trade with the U.S. gets a lot of international coverage. However, Canada’s trade with its southern neighbour is just about as big in dollar terms. China sends goods worth about $1.25 trillion to the U.S. every year; Canada sends around $1 trillion.
So, if Trump were to follow through on the threat he issued Monday, the effect on the Canadian economy could be devastating. After nine years of woke Liberal economic policies, we are teetering on a recession anyway with devasting industrial productivity, slow job growth, high food prices and declining per capita GDP. Our economy and jobs cannot absorb a blow like the one threatened by Trump.
The effect of Trump’s tariffs would be noticeable on the U.S. economy, too. Americans, especially those in the Midwest, rely on four million barrels of Canadian oil imported every day. Adding 25% to the cost of that oil could add about 50 cents a gallon or more to the price of U.S. gasoline.
And the North American auto industry is so thoroughly integrated, with parts and finished vehicles trading daily between the two countries in both directions, that Trump’s tariff, if applied to every axle, carburetor and pickup, could add $3,000 or more to the price of every car and light-duty truck sold stateside.
Canadians, though, should remember there was a second part to Trump’s tariff announcement. He will impose high tariffs on all goods from Canada, he promised, until we stem the flow of illegal aliens and drugs entering the U.S. from our side of the border.
We should treat his tariff threat as serious, but not inevitable.
While far fewer illegals attempt to get into the U.S. through Canada than through Mexico, illegal crossings from here have risen dramatically, especially this year.
American border officers detained or turned away about 3.2 million illegal immigrants trying to cross into the U.S. from Mexico in 2023. By comparison, they turned away only 12,000 coming from Canada.
However, as of the end of August, that number had jumped to 18,000, a 50% increase in just the first eight months of 2024. By far the largest number is from India. People fly to Canada because it’s easier to be admitted here. Then they attempt to sneak into the U.S., which was likely their original goal all along.
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An RCMP source this week told Montreal Global News reporter Mackenzie Grey that people who enter Canada legally, then try to cross illegally in the U.S., are 90% of what they’re doing at the border at the moment.
The Americans also know we have 4.9 million people in our country whose visas will expire between now and December 2025. And they know we have no way of forcing the holders of expired visas to leave.
Canadian authorities may be worried about a migrant wave rushing here from the U.S. as foreign nationals flee Trump’s impending “mass deportation.” Yet American authorities are just as worried Canada’s lax immigration system is becoming a backdoor into the U.S.
Even if we are just talking about legal immigrants. On a per capita basis, Canada admits almost five times more immigrants than the U.S. And even after the Liberals’ recently announced cutbacks, we will still be admitting four times more.
The Americans can’t police our entire shared border, and neither can we. That is what worries the Trump administration.
Fixing our immigration problem would be worth doing on its own, even if only to save our housing markets and health-care systems. But doing it to save our economy, too, makes it doubly essential.