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

When Donald Trump mused about using “economic power” to potentially take over Canada, the US president-elect was also at the same time dismissing the importance of his country’s No. 1 trading partner.

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

He dismissed any reliance by the United States on trade with its northern neighbor, seemingly ignoring that Canadian exports to the U.S. in 2023, for example, were nearly $418.6 billion, according to the U.S. Census Bureau.

Nor did Trump mention the roughly 4.4 million barrels of oil the U.S. receives from Canada a day, according to the U.S. Energy Information Administration, a little more than half of all oil imported and the No. 1 import.

He focused on the auto, lumber and dairy industries, saying the U.S. could meet Americans’ significant demand for those products.

But as the numbers and experts suggest, demand in the U.S. means Canada may not be so easily replaced.

Automobile

Trump told reporters that the U.S. doesn’t need “their cars” in Canada and would rather make them in Detroit.

Although Canada does not produce its own mass-produced vehicles, it is home to plants for US automakers Ford, General Motors and Stellantis North America.

Because of its huge appetite for vehicles, the US is the largest importer of cars in the world — and Canada is one of its largest suppliers. For example, more than 1.5 million vehicles will be produced in Canada in 2023, according to the Canadian Automobile Manufacturers Association.

In a normal year, according to Flavio Volpe, president of the Auto Parts Manufacturers Association, about 80 percent of vehicles made in Canada are exported to the U.S.

So, could US automakers, as Trump suggests, remove all their factories from Canada, set up shop in their own country and manufacture all their vehicles from home?

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

But there would be a big catch: the collapse of the North American auto industry, he said.

“It might help Americans and American manufacturers, but the cost of doing it would be so huge that it would probably push North American industry into recession,” he said. “These are supply chains that have evolved over decades.”

American automakers are building factories in Canada to take advantage of lower wages, lower exchange rates and a skilled workforce. While moving all Canadian factories to the U.S. would be a boon for the country’s workforce, it would also mean costs for vehicle consumers on both sides of the border would rise dramatically, Anastakis said.

It would take years to redesign their supply lines and it would be very expensive for American manufacturers, he said, because they have invested so much money in their Canadian operations.

“This topic of conversation which [Trump] “‘We could just build them all here,’ like snapping your fingers, is completely out of touch with reality because of the way the industry has evolved over the last 60 years,” Anastakis said.

Volpe said that American manufacturers would suffer huge losses by relocating and building new factories in the US, which would take years. “Creating an us-versus-them context is a complete fabrication,” he said.

Lumber

According to the Washington, DC-based National Association of Home Builders, domestic softwood lumber production in the US is insufficient to meet demand in the home building industry.

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

The United States uses a lot of lumber, and a significant portion comes from Canada.

“The U.S. imports about 25 percent of total softwood lumber consumption from Canada, which is quite a large market share,” Rajan Parajuli, associate professor of forest economics and policy at NC State University in Raleigh, NC, said in an email. for CBC News.

Parajuli said the US lacks the capacity to meet domestic demand.

But Trump said the U.S. doesn’t need Canadian lumber and has “huge timber fields” that he could lift the restrictions with an executive order.

However, Parajuli said it’s still “highly unlikely” that the U.S., without Canadian lumber, will be able to meet demand. While the U.S. has ample supplies of trees, the sawmill industry has limited capacity and a limited supply chain, he said.

For the most part, the logging industry has been shrinking for the past few decades, he said.

Russ Taylor, a BC-based forestry consultant, said Trump could relax regulations to allow more logging in America’s public forests, but that would require more loggers, truck drivers and laborers.

“Where is the labor and the skilled workers and the capital going to come from? It doesn’t happen overnight.”

Taylor said Trump is also forgetting the manufacturing aspect of the industry and that US factories are already operating at about 85 percent capacity.

“You could probably push more logs through American sawmills, but you wouldn’t get much, you’d get some,” he said.

But with about 25 percent of the lumber coming from Canada, a five or 10 percent increase in production in the U.S. means you’re “still nowhere near” meeting demand, Taylor said.

“The bottom line is that the U.S. needs Canadian lumber, period.”

Dairy products

In 2023, Canada exported about Cdn 488 million worth of dairy products to the US, according to Agriculture and Agri-Food Canada.

But Trump said the U.S. doesn’t need Canadian dairy products, specifically mentioning Canadian milk. And it’s true that Canada doesn’t export a lot of milk to the US — about $17 million worth in 2023.

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

Berti said the U.S. imports a lot of Canadian-made sheep’s milk and goat’s milk cheese, products that aren’t very common in the U.S. because they focus more on cow’s milk cheeses.

“Goat milk is also produced in the USA, but in a smaller percentage. It is not enough to cover the needs of the USA,” he said. “Well we’re going to Canada for that reason.”

Berti said Americans are also turning to Canada for French-style cheeses, as well as Quebec-made cheeses, which are favorites in specialty stores.