Trump Is Wrong About Why Canada Should Join the US

Correction January 9 2024: An earlier version of this post incorrectly stated that Canada spends 2% of its GDP on military spending. This has been corrected to the true value of 1.7%.

I recently came across an interview clip where President-elect Donald Trump discussed integrating Canada into the United States. I disagree with Trump’s rhetoric suggesting that the US maintains a purely benevolent relationship with Canada and that the partnership is one-sided.

While it’s true that the US could survive without Canada more easily than the opposite, the US benefits tremendously from this relationship. Canada is not simply selling cars to the US, they have an intricate, interconnected supply chain that reduces production costs for both countries, with mutual market access being a key component of the agreement. This approach traces back to Henry Ford, who leveraged international supply chains to reduce manufacturing costs and make cars accessible to lower and middle-class consumers.

Trump frequently cites “trade deficits” with countries like China, claiming they harm the economy and require intervention. This reflects an economic misconception, trade deficits aren’t inherently negative since they often reduce or stabilize the price of goods. Reducing prices is challenging and typically requires one of several approaches: economic recession (harmful), government subsidies (increases national debt), breaking up monopolies (legally complex and opposed to the US parties’ interests due to political donations), technological innovations (expensive with no guarantee of coming to market), or international trade. Given how crucial stable low prices are to American consumers, trade deficits can actually be advantageous.

Although, Trump’s critiques of the relationship’s imbalance aren’t unfounded. Canada is a NATO member but only plans to spend 1.7% of its GDP towards defense by 2030, 0.3% short of the 2% NATO guideline while 23 out of the 32 members are expected to hit the mark. This lack of urgency to meet the guidelines “has frustrated allies far and wide — from the White House to the halls of Congress to capitals all over Europe.”¹

While I agree the US should prioritize the interests of its citizens and that Canada should become self-reliant, the US is a major beneficiary of this relationship and is far from being disadvantaged.