ANALYSIS | Trump says U.S. doesn’t need Canadian cars, lumber or dairy. Consumers may not agree | CBC News

When Donald Trump was musing about using “economic force” to potentially acquire Canada, the U.S. president-elect was, at the same time, also 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 rejected any reliance the United States may have on trade with its northern neighbour, seeming to ignore that Canadian exports to the U.S. in 2023, for example, totalled nearly $418.6 billion US, according to the U.S. Census Bureau.

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

He did zero in on the auto, lumber and dairy industries, saying that the U.S. could fill Americans’ significant demand for these products.

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

Automotive

Trump told reporters that in reference to Canada, the U.S. doesn’t need “their cars” and that he’d rather make them in Detroit.

While Canada doesn’t make any of its own vehicles for mass production, it’s home to plants from U.S.-based auto manufacturers Ford, General Motors and Stellantis North America.

Because of its big appetite for vehicles, the U.S. is the largest auto importer in the world — and Canada is one of its biggest 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 Automotive Parts Manufacturers’ Association, about 80 per cent of of vehicles made in Canada are exported to the U.S.

So, could U.S. auto manufacturers, as Trump suggests, remove all of their plants from Canada, set up shop in their country and produce all of 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 disintegration of the North American auto industry, he said.

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

U.S. auto manufacturers build plants in Canada to take advantage of lower wages, lower exchange rates and also skilled labour. While moving all of the Canadian plants to the U.S. would be a boon for labour in that country, it would also mean costs for consumers of vehicles on both sides of the border would rise dramatically, Anastakis said.

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It would take years to reshape their supply lines and be very costly for U.S. manufacturers, he said, because they’ve sunk so much money into their operations in Canada.

“This talking point that [Trump] had about ‘We could just build them all here,’ like snapping your fingers, is completely untethered from reality because of the way that the industry has evolved over the last 60 years,” Anastakis said.

Volpe said U.S. manufacturers would suffer big losses by moving and building new plants to the U.S., something that would take years. “Creating an us-versus-them context is a complete fabrication,” he said.

Lumber

According to the Washington, D.C.-based National Association of Home Builders, the U.S. domestic production of softwood lumber is not sufficient to meet the demand from the home-building industry.

“To help 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 email 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 per cent of the total softwood lumber consumption from Canada, which is quite a large market share,” Rajan Parajuli, an associate professor of forest economics and policy at NC State University in Raleigh, N.C., said in an email to CBC News.

Parajuli said the U.S. lacks the capacity to meet domestic demand.

But Trump said the U.S. doesn’t need Canadian lumber and that it has “massive fields of lumber” that he could unrestrict with an executive order.

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

Mostly, the logging industry has been shrinking for the last couple of decades, he said.

Russ Taylor, a B.C.-based forestry consultant, said Trump could loosen up regulations to allow more logging in U.S. public forests, but more loggers, truck drivers and workers would be needed.

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

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Taylor said Trump is also forgetting the processing aspect of the industry and that mills in the U.S. are already operating at about 85 per cent capacity.

“You could probably push some more logs through the U.S. sawmills, but you wouldn’t gain a lot, you would gain some,” he said.

But with about 25 per cent of lumber coming from Canada, increasing production by five or 10 per cent in the U.S. means “you’re still not even close” to meeting demand, Taylor said.

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

Dairy

In 2023, Canada exported about $488 million Cdn worth of dairy products to the U.S., 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 U.S. — about $17 million worth in 2023.

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

Berti said the U.S. imports a lot of cheese from sheep’s milk and goats’ milk made in Canada, products that aren’t very common in the U.S., because it tends to focus more on cheese made from cows’ milk.

“Goat’s milk is also made in the U.S., but it’s a smaller percentage. It’s not enough to cover the U.S. demand,” he said. “So we go to Canada for that reason.”

Berti said Americans also turn to Canada for French-style cheeses, as well as artisan cheeses made in Quebec, which are a favourite in specialty shops.

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Images gathered from Reuters, Getty Images, and The Canadian Press.