We’ve been ripped off for years, and we’re not going to be ripped off anymore.… We’re spending $200 billion a year to subsidize Canada.… We don’t need their cars. We don’t need their energy…. Canada only works as a state, [it would be] so perfect as a great and cherished state.
Those comments, made during an Oval Office meeting on March 13, 2025, pretty much summarize President Trump’s current feelings towards Canada. His feelings aren’t complex: (1) Canada is stealing from the United States, (2) the U.S. needs neither Canadian goods nor energy, and (3) Canada would be perfect as a U.S. state.
It’s easy to discount President Trump’s rhetoric as bluster; Trump has often claimed nations, large and small, are abusing the United States. Certainly, the president has never explained how the U.S. is spending $200 billion a year to subsidize Canada. However, President Trump has been right at times, particularly when he claimed NATO countries were underspending on defense.Is the president right about Canada?
One of President Trump’s most persistent claims is that Canada charges huge import tariffs on American dairy products. “They have for dairy products, some dairy products, 270% tariff,” Trump recently said. “So we want to sell milk into Canada, and they throw a 270% price increase on the milk.” What Trump does not mention is that Canada’s high dairy tariffs apply only when imports exceed product-specific quotas. For example, in 2025 the United States could export 50,000 metric tons (about 51.3 million quarts) of fluid milk to Canada tariff-free. The United States rarely, except for a few types of cheese, exceeds the dairy quotas that trigger the high Canadian tariffs Trump so often claims.
Despite President Trump’s claims, the United States is a huge beneficiary in its dairy trade with Canada running large trade surpluses. In 2025, for example, the United States exported $1.3 billion in dairy products to Canada while only importing $430 million from Canada, resulting in an $870 million U.S. dairy surplus. America’s trade advantage is even greater on a per capita basis. In 2025, the average American consumed $1.25 in Canadian dairy products while Canadians consumed a whopping $31.70 in American dairy products per person.
President Trump is on firmer ground when he comments on the U.S. automobile trade with Canada. In 2025, the United States imported $25.3 billion of cars from Canada and exported only $12.7 billion resulting in a $12.6 billion U.S. trade deficit. That’s a large deficit, but the deficit shrinks once trucks and vehicle parts are included. Two-way trade in trucks and parts in 2025 totaled $42.6 billion with the United States running a U.S. surplus of about $9.2 billion ($25.9 billion in U.S. exports versus $16.7 billion in imports). Together, cars, trucks, and parts accounted for $80.6 billion in two-way trade between the two countries in 2025 resulting in a modest U.S. trade deficit of $3.4 billion. Similar to dairy products, on a per capita basis Canada purchases far more American-made automotive products ($965 per person) than America purchases Canadian-made products ($125 per person).
Far more than automobiles, no trade between the United States and Canada is more one-sided than raw, unprocessed aluminum. In 2025, the United States imported $6.1 billion in raw aluminum from Canada while exporting only $300 million, resulting in a $5.8 billion U.S. trade deficit.
But don’t blame Canada. Aluminum requires massive amounts of electricity to smelt—about 15 megawatt-hours per ton or enough to power 500 average U.S. homes for a day. (A typical American car contains 500 pounds of aluminum.) Canada’s abundant hydropower allows Canada to generate electricity at half the cost of the United States. Not surprisingly, American smelters produce only 12 percent of the aluminum the nation consumes with Canada picking up a significant portion of the balance.
Beyond aluminum, and as an alternative to China, Canada is a leading U.S. source for roughly twenty critical minerals such as gallium, nickel, tellurium, and uranium, used in batteries, power generation, electronics, and defense. The United States imports these minerals because it lacks either the deposits to mine them economically or the smelters to process them.
Overall, in 2025 the United States exported $333.6 billion in goods to Canada while importing $381.9 billion resulting in a $48.3 billion trade deficit. Many different goods from maple syrup to machine tools contributed to that deficit, but one sector absolutely dominated: energy.
In 2025, the United States ran a massive $85 billion trade deficit in mineral fuels and oils, importing $111 billion while exporting only $26 billion. Exclude energy and the United States would have a $64.5 billion trade surplus with Canada rather than a deficit.
The U.S. trade deficit with Canada is due to its large purchases of crude oil.
In short, America's trade imbalance with Canada is overwhelmingly due to one factor: American refineries buying Canadian crude oil. Why does the United States need Canadian crude oil? I answered that question in my April 14, 2026, Substack:
America, before the fracking revolution, produced primarily heavy crude. So, the nation’s refineries largely processed heavy crude oil rather than light crude. Building new refineries, or even converting existing refineries to process light crude, would cost many billions of dollars…. American oil companies found an easy, and highly profitable, alternative to building new refineries. Export America’s light sweet crude to Europe whose refineries were designed for light crude (North Sea oil is similar to America’s light crude), then import heavy crude [from Canada and the Middle East] to process in American refineries.
President Trump, referring to Canada, has repeatedly declared, “We don't need their oil and gas. We have more than anybody,” and similar comments. Yet, Canada currently supplies roughly 20 percent of all oil consumed in the United States.
Industry analysts estimate that merely taxing Canadian oil at 25 percent could raise American gasoline prices by as much as seventy cents per gallon; cutting off the supply entirely would cost far more. So, regardless of his comments regarding Canadian oil, it’s not surprising that President Trump has long supported the Keystone XL pipeline to transport oil from Alberta’s rich oil fields to American refineries along the Gulf Coast. Perhaps most tellingly, when President Trump's 50 percent tariffs on scores of Canadian goods took effect on August 22, Canada's oil and gas were exempted.
For more than thirty years, Canada was America’s largest export market. It fell to second place in 2025 behind Mexico as Canadians boycotted American goods after President Trump imposed sweeping tariffs and threatened to annex Canada as the fifty-first state.
Oh, Canada! A bizarre A.I. image President Trump posted to Truth Social on December 3, 2024. (archived on X.com)
It’s hard to understand why President Trump has singled out Canada for his attacks on Canadian trade and sovereignty: outside of energy, the United States enjoys a large trade surplus with Canada. More importantly, Canadians have been loyal friends. After the 9/11 Terrorist Attacks, when aircraft were forced to land, the citizens of Gander, Newfoundland gladly welcomed nearly 7,000 stranded U.S.-bound passengers into their homes. Later, Canada sent more than 40,000 soldiers to Afghanistan, Canada's largest military deployment since the Second World War. Americans and Canadians share a common language, similar cultures, and the world's longest undefended border—a border that is now threatened by President Trump.
Perhaps President Trump didn’t expect our friendly Canadian neighbors to fight back. If that’s the case, he was badly mistaken.
Originally Published on Ronald Gruner’s Substack on September 1, 2026. For more writing by Ronald Gruner, please see his substack https://ronaldgruner.substack.com/