Why Trump is threatening Canada with tariffs

• President-elect Trump on Monday threatened to impose 25% tariffs on imported goods from Canada.
• In making his statement on Truth Social, Trump criticized Canada over immigration policy and drugs.
• Roughly 77% of Canada's exports go directly to the US, per the Toronto Region Board of Trade.

President-elect Donald Trump this week has made waves with his vow to impose new tariffs on imported goods from Canada, China, and Mexico, which also happen to be the United States' top trading partners.

Trump's hard line stance against China — a country that conservatives consider to be a threat to the US' economic and national security interests — is not a surprise. Neither are his threats regarding Mexico, whose border with the US has created contentious and high-profile immigration concerns.

But where does Canada, the US' northern neighbor, fit into the equation alongside China and Mexico?

In short, Trump says he has the same concerns over immigration, fentanyl, and crime from the Canadian border as he does Mexico's.

While it's possible the tariff threats are part of Trump's negotiation strategy, there has been a sharp increase in apprehensions at US-Canada border over the past year. From October 2023 through September 2024, US Border Patrol made 23,721 arrests at the US-Canada border, compared to the 10,021 arrests that were made in the preceding twelve-month period, according to Customs and Border Patrol data. The New York Times and NPR reported that Indian nationals in Canada on temporary visas make up a large portion of the surge of illegal border crossings into the US.

Few things animate Trump more than immigration, one of his defining issues and one that he's zeroed in on since his first presidential run in 2016. The president-elect's firm stance on border security has earned him enduring loyalty from the party's base.

Justin Trudeau, Canada's prime minister, immediately addressed the concerns within his country, telling reporters on Tuesday that he had a "good" conversation with Trump following the president-elect's pledge to target his country.

"We talked about how the intense and effective connections between our two countries flow back and forth," Trudeau said. "We talked about some of the challenges that we can work on together."

Trump on Monday criticized both Canada and Mexico over the issue on his Truth Social platform.

"On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders," Trump wrote on Truth Social. "This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!"

If enacted, the ramifications of such tariffs could be enormous, as approximately 77% of Canada's exports go directly to the US, according to the Toronto Region Board of Trade.

And if Trump actually imposed the tariffs, some experts have warned that he'd be violating US-Mexico-Canada Agreement, which was brokered during his first term in office to replace the North American Free Trade Agreement — the 1990s-era free trade pact the president-elect had long railed against.

Jake Colvin, the president of the National Foreign Trade Council, said that Trump's proposed tariffs would trigger a "clear violation of the USMCA," according to Roll Call.

"While we're all familiar with the President-elect's fondness for tariffs as a negotiating tool, it's particularly troubling that he's threatening to aim them at America's closest allies and trading partners on the very first day of his administration," he said.

Chrystia Freeland, the deputy prime minister of Canada, and Dominic LeBlanc, the country's public safety minister, in a joint statement on Monday responded to Trump's remarks where they touted the mutually beneficial alliance between the two countries.

"Canada and the United States have one of the strongest and closest relationships — particularly when it comes to trade and border security," the top officials wrote on X. "Canada places the highest priority on border security and the integrity of our shared border."

"In addition, the CBSA [Canada Border Services Agency] is continually strengthening its ability to detect opioids through enhanced inspections at ports of entry, detector dogs, and emerging technologies, preventing opioids from entering and leaving Canada."

The officials then pledged to work with Trump's second-term administration in tackling the issues that he raised.

Business Insider reached out to a representative of Trump for comment.