What becoming the 51st U.S. state would do to Canada's economy
Donald Trump continues to talk about Canada after beginning his second term as United States President on Monday.
Beyond threats to impose 25 per cent tariffs on Canadian goods, he has continually flogged the idea of making Canada a 51st state.
“Many people in Canada LOVE being the 51st state,” he said on his Truth Social platform earlier this month.
Invoking Canada’s trade deficit with the U.S. and calling it a subsidy, Trump has even threatened to use economic force to annex this country.
Many economists object to his narrative, and not just his description of a trade deficit as a subsidy, but the size of the trade imbalance between the two countries.
Still, certain facts are beyond dispute. The U.S. is Canada’s largest trading partner, and two-way trade between the countries reached $908 billion in 2022, accounting for 63.4 per cent of Canada’s global trade.
There has also been a persistent trade imbalance, with Canada sending more goods to the U.S. than it receives back. Kirsten Hillman, Canada’s ambassador to Washington, has said it ran to $75 billion last year and has pledged to buy more from the U.S. — for example, through military procurements — to mitigate the imbalance in coming years.
At best, Trump’s idea for Canada to join the U.S. faces long odds of becoming a reality. Everyone from Prime Minister Justin Trudeau and his cabinet to Ontario’s Conservative Premier Doug Ford — not to mention much of the wider electorate — has rejected his overtures in no uncertain terms.
Nonetheless, Canada depends on the U.S. as a trading partner far more than the U.S. depends on Canada — after all, at 40.1 million people, it only has 12 per cent of the population of the U.S.
As such, Trump can use the power of his office to
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