Canada · Donald Trump · U.S. · Fortune Technology
The trade deficit with Canada that’s upset Trump so much is due to crude the U.S. picks up at a discount for the Midwest
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Canada might seem an unlikely target for a U.S. trade war.
Key facts
- The conservative Heritage Foundation in Washington ranked Canada No. 14 (out of 184 economies) on its Index of Economic Freedom; the United States landed eight spots lower at No. 22
- The United States already runs a hefty trade surplus in dairy with its northern neighbor, exporting $1.3 billion worth of dairy products to Canada last year while importing $585 million, according
- Before the latest blowup, Canada’s effective tariff rate on U.S. imports was about 2.4%, less than half the 5% that the United States imposed on Canada, according to calculations by Oxford Economics
- Overall, the United States runs a trade deficit with Canada, $27.3 billion last year, and Trump isn’t happy about it
Summary
No country on Earth buys as much from the United States as its northern neighbor. A North American trade pact, negotiated by President Donald Trump during his first term, means that most American products enter Canada duty-free. But when Trump looks at Canada, he says, he sees a predator out to cheat the United States and strangle its industries. America has been “ripped off for 50 years by Canada,” the president declared Saturday when asked if he was considering pulling out of the three-way agreement he signed with the leaders of Canada and Mexico in late 2018.