A truck crosses the Ambassador Bridge, border crossing between Windsor, Ontario, Canada, and Detroit, Michigan, above the Canadian Vietnam Veterans Memorial on March 1, 2025 (AFP / Geoff Robins)

Fact-checking Trump's claims about Canada used to justify tariffs

Published on March 5, 2025 at 16:26
5 min read
By Gwen Roley, AFP Canada

US President Donald Trump has said his tariffs on Canadian goods are necessary to force action on the migrants and drugs entering the United States through its northern border. He has also described billions of dollars in daily cross-border trade as a US subsidy and claimed Canada would not be "viable as a country" without it.

According to Trump, Canada's economic dependence on the United States is one of the reasons it should become the 51st US state.

Steep US tariffs on Canadian and Mexican goods came into force March 4, with experts warning they could snarl supply chains and push up prices for consumers. Prime Minister Justin Trudeau called the levies "a very dumb thing to do" while confirming that Canada would respond with its own retaliatory 25 percent tariffs on US products.

AFP fact-checked some of the president's claims about Canada, which include misrepresentations about bilateral economic relations and the situation at the border.

US supply of Canadian imports

Trump has claimed that Canada gets 95 percent of its "product" from the United States (archived here).

For Canada's imported goods, that figure is inaccurate, according to Statistics Canada.

In 2024, 62.2 percent of Canada's total imports came from the United States, the federal agency said (archived here).

But, as University of Toronto economist Joseph Steinberg (archived here) noted, "a lot of what Canadian consumers buy is produced domestically," so Trump's 95 percent claim can only be credibly scrutinized if it is assumed he was talking about imports.

"If we... focus on imports, does the US account for 95 percent? Not quite, although it is a really high number," Steinberg said.

Statistics Canada also reported 75.9 percent of the country's exports went to the United States last year.

US trade deficit

During the question-and-answer portion of his January World Economic Forum appearance, Trump claimed the United States had a $200 billion or $250 billion trade deficit with Canada.

"That's an inflated number," Steinberg said.

US President Donald Trump is seen on a large screen during his address by video conference at the World Economic Forum annual meeting in Davos on January 23, 2025 (AFP / Fabrice COFFRINI)

The United States Trade Representative and the US Census Bureau put the trade deficit with Canada at $63.3 billion at the end of 2024 (archived here and here), while Statistics Canada reported its surplus with the United States as Can$102.3 billion ($70.3 billion).

But trade deficits are not subsidies and the data does not affirm that the United States is propping up Canada's economy, Steinberg said.

"International trade is a mutually beneficial transaction," he said. "The United States pays Canada for products; it wouldn't pay Canada for those products if it didn't feel that it was worth it in this case."

US oil purchases from Canada are a main driver of the trade deficit, he added.

American banks in Canada

"Canada doesn't even allow U.S. Banks to open or do business there," Trump said in a social media post last month.

That claim is also false.

Foreign banks, including American financial institutions, are regulated by Canada's federal Bank Act (archived here).

"There are 16 US-based bank subsidiaries and branches with around Can$113 billion in assets currently operating in Canada," the Canadian Bankers Association said in a February 3 statement on X (archived here).

JP Morgan Chase, CitiBank, Bank of America and others have offices in most major Canadian cities offering financial services including corporate and commercial lending (archived here, here and here).

Most US financial institutions in Canada are registered in a category where they are subject to certain restrictions including large minimum deposit amounts, while a minority set up subsidiaries in the country which are governed in the same way as Canadian banks (archived here, here and here).

Border security

The Trump administration has said improving border security is a central issue in its relations with Canada.

Trump has claimed that undocumented migrants and the drug fentanyl are flowing across the border in large numbers (archived here and here).

Royal Canadian Mounted Police Corporal Keven Rouleau patrols along the Canada-US border, near the border town of Stanstead, Quebec, Canada, on January 30, 2025 (AFP / Daphné LEMELIN)

Kelly Sundberg, a criminologist at Mount Royal University in Calgary (archived here), said there is no evidence to back up Trump's claims on fentanyl, as data shows less than one percent of the killer opioid that enters the United States came from Canada.

According to the United States Customs and Border Patrol (CBP) agency, out of over 21,800 pounds (9,900 kilograms) of fentanyl intercepted by agents during the 2024 fiscal year, 43 pounds was seized near the northern border with Canada (archived here).

CBP data also reported US border patrol agents apprehended 23,721 people illegally crossing the Canadian border in fiscal year 2024 (archived here).

Nationally last year, CBP agents came into contact with more than 1.5 million undocumented migrants.

"Canada is under greater threat from the United States than the United States is from Canada for most things -- guns, drugs (and) illegal immigrants," Sundberg said.

He said more relaxed drug laws in Canada could project an inflated sense of illicit substances entering the United States.

Read more of AFP's reporting on misinformation in Canada here.

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