Trump says the US doesn’t need Canadian cars, lumber or dairy products. Consumers may not agree

When Donald Trump was considering using “economic power” to potentially take over Canada, the US president-elect was, at the same time, also ignoring the importance of his country’s number one trading partner.

“We don’t need anything they have,” Trump said of Canada during a news conference at his Mar-a-Lago resort in Florida earlier this week.

He dismissed any U.S. dependence on trade with its northern neighbour, and seemed to ignore that Canadian exports to the U.S. in 2023, for example, amounted to nearly $418.6 billion, according to the U.S. Census Bureau.

Trump also did not mention the nearly 4.4 million barrels of oil the United States receives daily from Canada, according to the U.S. Energy Information Administration, which is just over half of the total oil imported and the No. 1 importer.

He did not focus on the automobile, lumber and dairy industries, saying that the United States is capable of meeting the large American demand for these products.

But as the numbers and experts suggest, US demand means Canada may not be easily replaced.

Cars

Trump told reporters that, in reference to Canada, the United States did not need “their cars” and that he would prefer to have them manufactured in Detroit.

While Canada does not manufacture any of its own vehicles for mass production, it is home to factories from US automakers such as Ford, General Motors, and Stellantis North America.

Because of its huge appetite for cars, the United States is the world’s largest importer of cars – and Canada is one of its largest suppliers. For example, more than 1.5 million vehicles were produced in Canada in 2023, according to the Canadian Vehicle Manufacturers Association.

In a normal year, according to Flavio Volpe, president of the Auto Parts Manufacturers Association, about 80 per cent of vehicles made in Canada are exported to the United States.

So, could American automakers, as Trump suggests, remove all of their factories from Canada, set up shop in Canada and produce all of their cars at home?

“Absolutely,” said Dimitri Anastakis, a professor of business history at the University of Toronto’s Rotman School of Management and an expert on the auto industry.

But he said there would be a big problem: the disintegration of the North American auto industry.

“It might help Americans and American producers, but the cost of getting there would be so enormous that it would likely push the North American industry into recession,” he said. “These are supply chains that have been developed for decades.”

American automakers are building factories in Canada to take advantage of lower wages, lower exchange rates, as well as skilled labor. While moving all Canadian factories to the United States would be a boon for employment in that country, it also means costs for vehicle consumers on both sides of the border would rise significantly, Anastakis said.

He said it would take years to reconfigure their supply lines and that would be very expensive for American manufacturers, because they have spent a lot of money in their operations in Canada.

“(Trump’s) talking point that we can just build it all here, like snapping your fingers, is completely irrelevant to reality because of the way the industry has evolved over the last 60 years,” Anastakis said.

Volpe said that American manufacturers will incur significant losses as a result of moving and building new factories to the United States, which may take years. “Creating an ‘us versus them’ context is a complete slander,” he said.

Wood

According to the Washington, D.C.-based National Association of Home Builders, domestic production of softwood lumber in the United States is insufficient to meet demand from the homebuilding industry.

“To help fill this gap, the United States relies on softwood lumber from Canada to meet our lumber demand,” Jim Tobin, the group’s president and CEO, said in an email statement to CBC News.

The United States uses a lot of wood, much of it coming from Canada.

“The United States imports about 25 percent of its total softwood lumber consumption from Canada, which is a very large market share,” Rajan Parajuli, assistant professor of forest economics and policy at North Carolina State University in Raleigh, N.C., said in an email. For CBC News.

Parajoli said the United States lacks the capacity to meet domestic demand.

But Trump said the United States does not need Canadian lumber, and that it has “huge lumber fields” that could be untied by executive order.

However, Parajoli said it is still “highly unlikely” that the United States, without Canadian lumber, will be able to meet demand. While the United States has enough standing tree inventory, the sawmill industry has limited capacity and a constrained supply chain, he said.

The logging industry has mostly shrunk over the past two decades, he said.

Ross Taylor, a British Columbia forestry consultant, said Trump could ease regulations to allow more logging in U.S. public forests, but more loggers, truck drivers and workers would be needed.

“Where will the labor, skilled workers and capital come from? This doesn’t happen overnight.”

Taylor said Trump is also forgetting the processing side of the industry and that mills in the United States are already operating at about 85 percent of capacity.

“Maybe you can push more logs through American sawmills, but you won’t make a lot, you will make some,” he said.

But with about 25 percent of the wood coming from Canada, a 5 or 10 percent increase in production in the United States means “you’re still not even close” to meeting demand, Taylor said.

“So the bottom line is the United States needs Canadian lumber, period.”

Dairy

In 2023, Canada exported C$488 million worth of dairy products to the United States, according to Agriculture and Agri-Food Canada.

But Trump said the United States does not need Canadian dairy products, and specifically mentioned Canadian milk. And it’s true that Canada doesn’t export much milk to the United States — worth about $17 million in 2023.

But Andrea Berti, president of the U.S.-based American Cheese Importers Association, said there is a market for Canadian cheese.

The United States imports a lot of sheep and goat milk cheese made in Canada, Bertie said, products that are not very popular in the United States, because they tend to focus more on cheese made from cow’s milk.

He added: “Goat milk is also manufactured in the United States, but at a lower rate. It is not enough to cover American demand.” “So we go to Canada for that reason.”

Americans are also turning to Canada to buy French-style cheese, as well as artisanal cheese made in Quebec, which is a favorite in specialty stores, Bertie said.