How can Canada avoid tariffs? ‘Become our 51st state,’ Trump says – National | Globalnews.ca

Ahead of a Monday afternoon call with Prime Minister Justin Trudeau to discuss a looming trade war, U.S. President Donald Trump said there was a surefire way Canada can avoid punishing U.S. tariffs: “become our 51st state.”

Trudeau and Trump spoke Monday morning as Canada braces for 25 per cent tariffs on goods it trades to the U.S., which are set to take effect Tuesday, with 10 per cent tariffs on energy.

Following that call, Trump and Mexican President Claudia Sheinbaum said they had spoken and reached an agreement to delay the implementation of tariffs on Mexico for one month.

Asked in the Oval Office if there was anything Canada can do to get its own reprieve, Trump said “I don’t know,” but then turned to his frequently mentioned push to acquire Canada.

“I’d like to see Canada become our 51st state,” he told reporters.

“We give them protection, military protection. We don’t need them to build our cars. … We don’t need them for lumber, we don’t need them for anything. We don’t need them for energy.”

Trump has linked his coming trade war with Canada to fentanyl crossing the border into the U.S., but on Monday he raised a new grievance about Canada not allowing U.S. banks into the country.

Several smaller U.S. banks operate branches in Canada, but regulations ensure the largest banks, commonly referred to as the “Big Five,” are Canadian-owned to ensure financial independence and regulatory stability.

Trump said he raised the banking issue with Trudeau in their morning call and suggested that was something he wanted to see addressed in any trade deal, and tied it to what he said is the larger issue of countries not treating the U.S. fairly.

“All we want is a fair deal,” he said, adding he wants “reciprocal” tariffs on trading partners that charge their own duties on American imports.

“Many of the countries that you feel so horrible about, the way they’re being treated by Trump — you’re saying, ‘Oh, President Trump is so terrible to them’ — well they charge us tariffs.

“A lot of these countries, they’re so-called allies, but they don’t treat us well,” he continued.

Ottawa is imposing 25 per cent tariffs on $30 billion in goods originating in the U.S., hitting hundreds of items, from meat and milk to carpets and curtains.

Canada’s initial tariff response takes effect Tuesday, when the American tariffs are being applied.

In three weeks, Ottawa plans to add another $125 billion in tariffs on hundreds of other U.S. goods after consulting with industry.

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Trudeau has said additional non-tariff measures are being discussed by the federal and provincial governments, including some related to critical minerals, energy and procurement.

Several provinces have ordered American products to be pulled from liquor store shelves and the cancellation of U.S. business contracts.

Procurement Minister Jean-Yves Duclos said Monday the federal government was looking at a “Canada First” policy for non-defence procurement contracts, which he said were worth roughly $250 million.

Trump has waved away concerns about tariffs raising prices for American consumers or affecting the stock market, as well as the potential impacts of the Canadian response.

He said the issue of tariffs would go away entirely if Canada becomes a U.S. state.

“I’d love to see that, but some people say that would be a longshot,” he admitted Monday.

“If people wanted to play the game right, it would be 100 per cent certain that they become a state, but a lot of people don’t like to play the game because they don’t have a threshold for pain. And there would be some pain, but not a lot, and it would mostly be theirs.”

Economists have said Canada could enter a recession if the trade war continues, leading to lost jobs and business investment, while the U.S. will see a rise in inflation — something Trump promised to bring down during his presidential campaign.

With files from the Canadian Press

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