President-elect Donald Trump has suggested that Mexico and Canada should become a U.S. state if they want to continue receiving subsidies from their neighboring country.
Trump has threatened to impose a 25 percent tariff on imports from Canada and Mexico unless the countries reduce the flow of migrants and drugs into the U.S. He defended his tariffs plan telling NBC News’ Meet the Press on Sunday that the U.S. subsidizes Mexico for almost $300 billion a year, as well as Canada for around $100 billion annually.
“We’re subsidizing Canada to the tune of over $100 billion a year. We’re subsidizing Mexico for almost $300 billion. We shouldn’t be—why are we subsidizing these countries? If we’re going to subsidize them, let them become a state,” Trump said. “We’re subsidizing Mexico and we’re subsidizing Canada, and we’re subsidizing many countries all over the world. All I want to do is have a level, fast, but fair playing field.”
He appears to be referencing the U.S. trade deficit between the two countries while exaggerating the numbers. The trade deficit in goods and services was nearly $41 billion with Canada, and more than $162 billion with Mexico in 2023, according to U.S. Census Bureau figures.
The president-elect had made a similar remark regarding Canada. Prime Minister Justin Trudeau had reportedly told the president-elect during a November 29 meeting at Trump’s Mar-a-Lago resort in Florida that the tariff plans would devastate Canada’s economy. The Republican is said to have jokingly suggested, “Maybe Canada should become the 51st state” in response.
Newsweek has contacted the Trump transition team and the Mexican president’s office for comment via email out of regular office hours.
MAGALI COHEN/Hans Lucas/AFP/Getty Images
The three countries currently have a largely duty-free arrangement under the U.S.-Mexico-Canada Agreement, which was signed into law by Trump during his first term in office.
The 25 percent tariff plans could significantly impact the trade relationship between the three countries and potentially raise the price of goods in the U.S.
When asked by Meet the Press‘ Kristen Welker whether he could guarantee that his tariff plans would not mean American families end up paying more, Trump replied: “I can’t guarantee anything. I can’t guarantee tomorrow.
“But I can say that if you look at my—just pre-COVID, we had the greatest economy in the history of our country. I had a lot of tariffs on a lot of different countries, particularly China,” he added.
Trump had also said in a November 25 post on Truth Social that he will charge China a 10 percent tariff “above any additional tariffs” unless Beijing tackles the smuggling of fentanyl.
“Tariffs, if properly used, are a very powerful tool, not only economically but also for achieving other objectives outside of economics,” Trump added on Meet the Press.
The tariff threats have also sparked an exchange of words between Mexico and Canada as Trump criticized both countries over their border controls.
In early December, Kirsten Hillman, Canada’s ambassador in Washington, told The Associated Press that the issues of drug smuggling and illegal crossings in Canada are vastly different from those in Mexico.
U.S. customs agents seized around 21,100 pounds of fentanyl at the southern border in 2024, compared to significantly fewer at the Canadian border. In terms of illegal immigration, U.S. Border Patrol made 56,530 arrests at the Mexican border in October alone. There were 23,721 arrests at the Canadian border between October 2023 and September 2024.
“The facts are hard to deny,” Hillman said.
In reply, Mexican President Claudia Sheinbaum Pardo told AP: “Mexico must be respected, especially by its trading partners.” On November 28, following a phone call with Trump, she had said there “will be no potential tariff war” between the U.S. and Mexico.
