US doesn't need Canadian energy or cars, Trump says

President Donald Trump said the US  doesn't need Canadian energy,  cars or lumber  during a speech to  world business leaders at the World Economic  Forum.
Trump also  repeated his threat to impose tariffs on the country, saying it  could be avoided if the  neighboring nation chose to "become a state" of the  US.
"You can  still become a  state and if  you are a  state we won't have a  deficit." "We shouldn't be putting tariffs on you," he  said, shocking the  Davos room.
Trump has threatened to impose  tariffs of up to 25% on Canadian imports, possibly  starting on February 1. Advertisement
The renewed threat of tariffs has been met with deep  concern in Canada, a country heavily dependent on trade.
But he has also said  he would consider significant countermeasures, including a  "dollar-for-dollar" response if the Trump administration  implements the measure.
About 75% of  Canadian exports  go to the country's south.  By contrast, Canada accounts for a much smaller  share of 17% of  U.S. exports,  despite being the  U.S.'s second-largest trading partner,  after Mexico.
In his remarks  Thursday, Trump said Canada  has been  "very difficult to deal with over the  years." "We don't need them to make our cars, we make a lot of them, we don't need their  timber because we have our own forests... we don't need their oil and gas, we have more than  anyone else," he told  the forum  participants via video link from  Washington, DC.
Trump repeated the  claim that the  United States has a trade deficit with Canada of between  $200 billion and  $250 billion. It is not clear where he got that  figure.
The trade deficit with Canada - expected to be  $45 billion by 2024 - is  largely due to U.S. energy  demand. The North American auto industry also has highly integrated supply  chains.
Vehicle parts can cross the borders between the  United States, Mexico, and Canada multiple  times before a vehicle is finally  assembled.
Trump has also tied the tariffs to border security, saying  they would be imposed  if Canada  did not increase security at the shared  border.
Canadian Prime Minister Justin Trudeau has repeatedly said that everything is on the table in response  to the  imposition of tariffs.
This includes a tax or embargo on energy exports to the  United States, although some provincial leaders  in Canada disagree with  this response. On Thursday, Trudeau told reporters that  Canada's goal  was to avoid  U.S. tariffs  altogether, but  that it  would ramp up its response  "gradually" to seek the  swift removal of  any tariffs that are  imposed.
Canada also  presents itself as a reliable trading partner and a secure source  of critical energy and minerals  for the United States, while pressuring U.S. lawmakers  to try to avoid  tariffs.
Canada offers to help Trump  in his efforts to  avoid a tariff war
Trudeau says  there is "not a  single chance in  the world" that Canada will join  the U.S.
Economists suggest the  U.S. depends on Canadian products for  its energy  security.
By 2024, Canadian energy exports  will be worth about $170 billion (C$244 billion), according to a recent analysis by TD Bank  economists.
Trump also said Thursday that  companies must manufacture their products in the  United States if they want to avoid  tariffs. Tariffs are a central part of Trump's economic  vision: he sees them as a way  to grow the  American economy,  protect jobs and  increase tax  revenue.
The new president has ordered federal officials to review  U.S. trade  relations for unfair practices by  April 1.

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