Donald Trump’s tariff war on Canada won’t achieve what the president promised — and it was never meant to - Toronto Star

Trump’s trade war with Canada is simply a pretext for a much more sinister agenda. 

President Donald Trump speaks with Canadian Prime Minister Mark Carney, right, at a working lunch with leaders of G7 and the Middle East in Evian-les-Bains, France, Tuesday, June 16, 2026. (Evelyn Hockstein/Pool Photo via AP, File)

Nathan Laurie is a former editor at the Toronto Star.

U.S. President Donald Trump claims that other countries are to blame for the massive trade deficit the Americans have with the rest of the world. “Foreign leaders,” he has said, “have stolen our jobs, foreign cheaters have ransacked our factories, and foreign scavengers have torn apart our once-beautiful American Dream. But it is not going to happen anymore.”

Now his sights are set firmly on Canada. Charging that our country treats the U.S. unfairly, he keeps imposing more and higher tariffs on us.

Those tariffs will hurt us. But, the one thing those tariffs — and all the tariffs he has imposed on virtually every other country in the world — won’t do is reduce the U.S. trade deficit.

The reason is simple. As a nation the United States buys more goods and services than it produces. That excess of American spending over American production must be satisfied by products made elsewhere; namely, by net U.S. imports from the rest of the world. Hence the American trade deficit.

In 2025 domestic spending in the U.S. was $31.8 trillion (U.S.). The total output produced by Americans (U.S. GDP) was roughly $1 trillion less. The difference was made up by the trade deficit. It’s as straightforward as that.

Question: So who is doing the excess spending in the United States?

Answer: It’s the federal government — Trump’s government.

In 2025, the Trump government spent $1.9 trillion more than all the revenue it took in. That represents a whopping 5.9 per cent of America’s GDP. For the current year, projections are almost identical — as is the projected 2026 trade deficit in spite of all the tariffs Trump has imposed.

Mind you, Trump himself bears a good part of the responsibility for his country’s big budget shortfall. His 2025 so-called “One Big Beautiful Bill Act,” which extended and expanded the tax cuts he introduced in his first term in office, is expected to cost the U.S. Treasury $4.1 trillion to $5.0 trillion in lost revenues over a decade. Add to that Trump’s costly war with Iran.

Now, it seems reasonable to ask which countries are helping to fill the gap between what the U.S. spends and what it produces.

At the top of this list are the European Union and China, with which the Americans had trade deficits in goods last year of $218.8 billion and $202.1 billion respectively. Next in line is Mexico which sold the Americans $196.9 billion more goods than it bought from them, in turn followed by Vietnam, with which the U.S. had a comparable trade deficit of $178.2 billion.

And where was Canada? Way down the list in 11th place, Canada registered a trade surplus in goods with the U.S. of around $46.4 billion (most of which was accounted for in oil exports.) When trade in services is added in, the overall U.S. trade deficit with Canada shrinks to roughly half of that amount and represents a mere two per cent of the overall U.S. trade deficit with the entire world. In other words, Canada’s contribution to America’s trade imbalance is little more than a rounding error.

In light of all this you have to ask yourself why Trump has started an all-out trade war with Canada.

It may be because he is ill-informed about all these simple facts.

But I would guess a more likely explanation is that Trump’s trade war with Canada is simply a pretext for a much more sinister agenda. Remember, Trump originally started off talking about using “economic force” rather than military force to wipe out the Canada-U.S. border, to make us in his own words “the 51st state.”

It certainly looks like that’s what his punitive tariffs on Canada are really designed to do.

Yes, the tariffs are painful. But as a nation we must not buckle under to Trump’s loathsome threats.

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Nathan Laurie is a former editor at the Toronto Star.

Opinion articles are based on the author’s interpretations and judgments of facts, data and events. More details