Trump says U.S. doesn’t need Canadian cars, lumber or dairy. Consumers may not agree

When Donald Trump was musing about using “economic force” to potentially acquire Canada, the U.S. president-elect was, at the same time, also dismissing the importance of his country’s No. 1 trading partner.

“We don’t need anything they have,” Trump said of Canada, during a news conference at his Mar-a-Lago estate in Florida earlier this week. He rejected any reliance the United States may have on trade with its northern neighbour, seeming to ignore that Canadian exports to the U.S. in 2023, for example, totalled nearly $418.6 billion US, according to the U.S. Census Bureau.

Nor did Trump mention the roughly 4.4 million barrels of oil the U.S. receives per day from Canada, according to the U.S. Energy Information Administration, a little more than half of all its imported oil and its No. 1 import. He did zero in on the auto, lumber and dairy industries, saying that the U.S. could fill Americans’ significant demand for these products.

But as figures and experts suggest, U.S. demand means Canada may not be so easily replaced.

**Automotive Industry**

Trump told reporters that the U.S. doesn’t need “their cars” and that he’d rather make them in Detroit. While Canada doesn’t make any of its own vehicles for mass production, it’s home to plants from U.S.-based auto manufacturers Ford, General Motors and Stellantis North America. In a normal year, about 80 per cent of of vehicles made in Canada are exported to the U.S.

According to Dimitry Anastakis, a professor of business history at the University of Toronto’s Rotman School of Management, moving all the Canadian plants to the U.S. would be a massive undertaking and could tip the North American auto industry into a recession. The supply chains have been developed for decades, and the costs for consumers on both sides of the border would rise dramatically if U.S. manufacturers were to relocate all their operations.

**Lumber Industry**

The U.S. imports about 25 per cent of the total softwood lumber consumption from Canada, which is a significant market share. The U.S. lacks the capacity to meet domestic demand for lumber, despite Trump’s claims of having “massive fields of lumber” that could be unrestrict with an executive order.

According to Rajan Parajuli, an associate professor of forest economics and policy at NC State University, the U.S. sawmill industry has limited capacity and a constrained supply chain. Increasing production in the U.S. by five or 10 per cent would still not be enough to meet the demand, as about 25 per cent of lumber comes from Canada.

**Dairy Industry**

In 2023, Canada exported about $488 million Cdn worth of dairy products to the U.S. Trump mentioned Canadian dairy products, specifically Canadian milk, but Canada doesn’t export a lot of milk to the U.S. There is, however, a market for Canadian cheeses in the U.S., particularly cheeses made from sheep’s milk and goats’ milk, as well as French-style and artisan cheeses made in Quebec.

In conclusion, while Trump may have dismissed the importance of Canada as a trading partner, the reality is that the U.S. relies heavily on Canadian exports in various industries. The interdependence of the two countries’ economies is evident, and any attempt to sever these ties would have significant economic consequences for both nations. It is essential for policymakers to consider the intricate supply chains and economic relationships that have been established over decades before making any drastic decisions.