Trump says US should to stop 'subsidizing' Canada as trade talks continue

President Donald Trump on Tuesday said the United States should stop "subsidizing" Canada, as he hosted the country's recently reelected premier Mark Carney for talks in Washington.

Canada has been caught up in the new administration's stop-start tariff rollout, which has hit goods not covered under an existing free trade arrangement with levies of up to 25 percent.

Canada's autos, steel, and aluminum exports have also been hit by the tariffs.

"We have a tremendous deficit with Canada," Trump told reporters during an event at the White House, with Carney seated just a few feet away.

"It's hard to justify subsidizing Canada to the tune of maybe $200 billion a year," he said, adding: "We protect Canada militarily, and we always will."

The United States' trade deficit with Canada was $63.3 billion last year, according to the US Trade Representative's office.

The far higher figure of $200 billion often cited by Trump also takes into account how much US defense spending benefits Canada, a member of the Trump transition team told CNN in mid-January, ahead of his return to office.

Returning to the issue of trade, Trump said America's northern neighbor would soon have to "take care of itself economically."

"We don't really want cars from Canada, and we put tariffs on cars from Canada," he said. "And at a certain point, it won't make economic sense for Canada to build those cars."

"We really don't want Canadian steel, and we don't want Canadian aluminum and various other things, because we want to be able to do it ourselves," he added.

The White House previously estimated that around 38 percent of Canadian imports to the United States and around half of all Mexican imports, are covered by the existing United States-Mexico-Canada Agreement (USMCA) and are currently not subject to the sweeping tariffs.

A large part of Canada's US imports not covered by the USMCA exemption are energy products, which currently face a lower 10 percent tariff rate.

The USMCA is due for review next year.

Source: AFP