Canada ready to buy more American products to appease Trump's tariff threat, ambassador says

[January 14, 2025]  By ROB GILLIES

PALM DESERT, Calif. (AP) — Canada's ambassador to Washington said Monday that Canada is prepared to buy more from the United States, including its next fleet of submarines, to appease President-elect Donald Trump's concerns about the U.S.-Canada trade deficit.

Ambassador Kirsten Hillman also warned Americans in an interview with The Associated Press that prices will go up for Americans almost immediately if Trump follows through with his plan to impose 25% tariffs on all Canadian products.

The ambassador also dismissed Trump’s talk of Canada becoming the 51st U.S. state, saying that’s how Trump negotiates.

“He has a negotiating style which involves positioning himself in the best way he can for discussions. I think that is what this is,” Hillman told the AP.

Trump continues to erroneously cast the U.S. trade deficit with Canada — a natural resource-rich nation that provides the U.S. with commodities like oil — as a subsidy.

Hillman noted Canada buys more from the United States than any other country but is prepared to buy more.

“We are happy to source what we can from the United States. And we have some big military procurements coming up for example, replacing our entire submarine fleet,” she said. “Maybe those are some purchases that can happen from the U.S.”

Hillman said 70% of Canada's military procurement is American sourced. That includes a plan to purchase 88 F-35 fighter jets.

Alberta's Premier Danielle Smith said earlier Monday she favors appeasing Trump by trying to narrow the trade gap, saying the solution is that Canada finds ways to buy more American goods. Smith visited Mar-a-Lago, Trump's home in Florida, over the weekend and spoke to Trump.

Hillman has said the U.S. had a $75 billion trade deficit with Canada last year but noted a third of what Canada sells into the U.S. is energy exports.

Hillman said trade with Canada supports over 8 million jobs in the United States and Canada is the number one customer to 36 U.S. states. She said Canada provides a lot of primary materials that go into U.S. manufacturing.

"Adding 25% tariffs to those products will raise the price for Americans almost immediately,” Hillman said. “And at a time when the cost of living is challenging, when food prices are high, it seems like the wrong direction to go in."

Hillman also reiterated that Canada will retaliate if tariffs are placed on Canadian goods and that will mean a cost for Americans.

Canadian Ambassador to the United States Kirsten Hillman arrives for a scrum with reporters ahead of the NATO Summit, in Washington, Monday, July 8, 2024. (Adrian Wyld/The Canadian Press via AP, File)

“Canada will respond," she said. “Therefore your number one customer will make American products more expensive and Canadians will probably look for alternatives to those products.”

Hillman said Canada is not interested in a trade war but said it will be hard for the Canadian government to not respond if the U.S. government makes choices that hurt Canadians.

She said it doesn't make sense for Trump to reverse what he accomplished in his first term when he renegotiated the free trade deal with Canada and Mexico.

“We are 99% tariff free with the United States, 99% tariff free. And that tariff level is as a result of the USMCA,” Hillman said, referring to the United States-Mexico-Canada Agreement. “That was negotiated by President Trump. He achieved that success so why would we backtrack from this success that he achieved in his last administration. It just doesn’t make a lot sense."

Hillman gave Trump credit for accelerating Canada's plans to increase security at the border. Trump initially threatened to impose 25% tariffs on all Canadian goods if the government does not stem what Trump calls a flow of migrants and drugs in the U.S. — even though far fewer of each crosses into the U.S. from Canada than from Mexico, which Trump has also threatened.

Canada now has a billion plus border security plan.

“We have moved really quickly, I’ll be honest, because President Trump focused the mind to put together a full package of improvements," Hillman said.

Hillman said also said the U.S. and Canada are in a “generational struggle" with China, a powerful adversary. Trump has been clear about the economic and security threat that Beijing poses, she said. The ambassador said Canada has the energy America needs to drive the artificial intelligence revolution.

"That is really not possible, based on our experts and American experts, without greater cooperation with Canada through oil and gas, through nuclear, through hydro electricity,” Hillman said.

“If we are working at odds then frankly China wins. China is trying to drive us apart. That is clear. They look for every opportunity to do so. That’s not good for us, our citizens and Americans.”

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