U.S. President-elect Donald Trump dismissed Ontario Premier Doug Ford’s recent warning to cut energy exports to American border states if Trump imposes 25% tariffs on Canadian goods, stating on Thursday that it was “fine.” The exchange follows mounting tensions as the tariff deadline looms.
On Wednesday, Ford announced his stance following a meeting with Canadian premiers and Prime Minister Justin Trudeau. Ford claimed there was a “100 per cent” likelihood that Trump’s tariffs would take effect in January and warned that Ontario might retaliate by cutting energy exports to 1.5 million Americans in states like Michigan, New York, and Minnesota.
“That’s OK if he does that, that’s fine,” Trump told a CNBC reporter at the New York Stock Exchange. Trump alleged that the United States is subsidizing Canada by over $100 billion annually, though he did not provide specific evidence to back this claim. The remarks echo similar assertions made during his presidency in 2018.
The International Monetary Fund (IMF) defines subsidies as transfers of resources from a government to a domestic entity without an equivalent contribution. It remains unclear whether Trump’s claims pertain to trade deficits, direct investment, or another metric. According to the U.S. Trade Representative, the U.S. goods and services trade deficit with Canada was $53.5 billion in 2022. In 2023, Canadian exports of services to the U.S. rose to $107.2 billion, while imports from the U.S. climbed to $121 billion, highlighting a complex economic relationship.
In response to Trump’s tariff threats, Ontario has outlined several potential retaliatory measures, including restricting electricity exports to border states, limiting exports of critical minerals for electric vehicle batteries, excluding U.S. companies from Ontario government contracts, and barring American-made alcohol from LCBO procurement.
Premier Ford emphasized that restricting energy exports would be a “last resort” if Trump’s administration doesn’t reconsider the tariffs. Meanwhile, Trudeau’s government is preparing measures to strengthen border security and address concerns raised by U.S. demands, aiming to mitigate escalating tensions between the two nations.
The situation remains fluid, with both sides weighing their next moves as January approaches.
