With tariffs and trade in the spotlight, what Trump means when he says America is ‘losing’ billions to Canada, others

When President-elect Donald Trump recently floated the idea of annexing Canada, a key reason he gave was a claim that the United States was “losing $200 billion a year” to its northern neighbor.

When President-elect Donald Trump recently floated the idea of annexing Canada, a key reason he gave was a claim that the United States was “losing $200 billion a year” to its northern neighbor. Speaking at Mar-a-Lago last week, Trump didn’t specify what constituted the $200 billion, but he used the figure in the context of how the US “subsidized” Canada and also had a “massive” trade deficit for items — such as cars and lumber — that he said the US does not need. The lion’s share of the $200 billion was attributed to US defense spending of which Canada directly benefits, and the remainder is from the trade deficit, a Trump-Vance transition official told CNN. In 2023, the US had a trade deficit of $67.9 billion dollars with Canada, Commerce Department data shows. Trade policy has once again landed in the spotlight as Trump is expected to wield tariffs and other measures as key policy levers during his second administration. However, some economists caution that exaggerating or classifying trade deficits as losses or subsidies isn’t a fair representation of what has become a crucial mechanism for the US economy.