In This Story
On Tuesday morning, President Donald Trump dismissed the value of U.S.-Canada trade in a Truth Social post, specifically declaring that the United States doesn’t need Canadian cars, energy, or lumber.
“I look forward to meeting the new Prime Minister of Canada, Mark Carney. I very much want to work with him, but cannot understand one simple TRUTH — Why is America subsidizing Canada by $200 Billion Dollars a year, in addition to giving them FREE Military Protection, and many other things? We don’t need their Cars, we don’t need their Energy, we don’t need their Lumber, we don’t need ANYTHING they have, other than their friendship, which hopefully we will always maintain. They, on the other hand, need EVERYTHING from us! The Prime Minister will be arriving shortly and that will be, most likely, my only question of consequence.”
But fresh federal data, also released Tuesday, tells a very different story — one of rising U.S. demand for those exact goods.
Increasing imports of Canadian cars, lumber, and energy
According to the U.S. Census Bureau and Bureau of Economic Analysis, the U.S. goods trade deficit with Canada widened to $4.9 billion in March, up sharply from prior months. The surge was driven by higher imports of Canadian-made cars, crude oil, and finished wood products — the exact categories Trump dismissed.
Automotive imports rose by $2.6 billion, including a $2.1 billion spike in passenger vehicles, many of which are assembled in Canada. Oil and lumber purchases also increased, contributing to a 14% month-over-month jump in the broader U.S. trade deficit, which hit a new monthly high of $140.5 billion in March.
Politically charged timing
Trump’s comments came just hours before a high-stakes meeting with Carney, a Harvard- and Oxford-educated former central banker.
Carney’s experience in economic crisis management is deep. He led the Bank of Canada through the 2008 financial crisis, chaired the Financial Stability Board after the meltdown, and helmed the Bank of England from 2013 to 2020, steering the UK through Brexit and the early COVID era.
Now, Carney enters the Oval Office as a first-time elected leader tasked with negotiating U.S.-Canada ties. As the New York Times (NYT+0.23%) reports, it’s “a high-stakes encounter that could easily go sideways,” with Trump having previously called Canada “the 51st state,” alleging that Canada depends heavily on U.S. trade and defense.
Trump’s claim that the U.S. is “subsidizing Canada by $200 billion a year” does not appear to be tethered to factual estimates, but the larger pattern is clear: political rhetoric colliding head-on with economic reality.
U.S. consumers and manufacturers remain deeply reliant on Canadian supply chains, especially in energy, timber, and autos. Even with the future of USMCA uncertain and tariff threats mounting, Canada’s role in U.S. trade appears to be growing, not shrinking.
Beyond the rhetoric, a nuanced picture
Trump has long portrayed the U.S.-Canada trade relationship as one-sided — a supposed giveaway that leaves Americans footing the bill. But economists say trade deficits aren’t inherently bad and don’t mean one country is losing. “Trade deficits are capital surpluses,” as former Reagan economist Art Laffer recently said on Fox Business (FOXA-0.75%), meaning that dollars sent abroad for goods often come back as investment in U.S. assets, like stocks, bonds, or factories.
With one of the most tightly woven trading partnerships in the world, the picture of U.S.-Canadian trade is complex and nuanced, with goods often crossing the border multiple times during production. The U.S. typically runs a services surplus with Canada, and American firms rely heavily on Canadian supply chains in autos, energy, and materials, as the fresh BEA data suggests.