Trump Offers Tariff-Free Trade to Canada in Exchange for Statehood, Bitcoin Falls Below $80,000
President Donald Trump has announced a 50% tariff on steel and aluminum imports from Canada, while also imposing a 25% tariff on all Canadian goods. The move, which will take effect on March 12, 2025, is the latest step in a long-running trade dispute between the two countries, with Trump demanding that Ottawa immediately remove what he calls “excessive” tariffs on US dairy products.
Trade Tensions Escalate: Steel, Aluminum Tariffs Rise as US-Canada Dispute Continues
The White House says the tariffs are aimed at protecting domestic US industries and addressing trade imbalances. The 25% tariff on imported metals is part of Trump’s broader trade strategy. Meanwhile, the additional 25% tariffs, tied to the national emergency declaration on drugs and immigration, create a combined 50% tax on Canadian metal exports. Canadian Prime Minister Justin Trudeau has strongly opposed the measures, calling them “unfair” and vowing to retaliate.
Trump Offers Canada Tariff-Free Trade in Exchange for Statehood
Bitcoin prices fell shortly after the news. Canada’s high tariffs on dairy, which range from 250% to 390% for products that exceed quotas agreed to in the United States-Mexico-Canada Agreement (USMCA), have been a focus of Trump’s criticism. However, the US often falls short of its dairy export quotas to Canada, making the high tariffs largely a symbolic issue. Trump has, however, called for the restrictions to be removed, arguing that they are unfair to American farmers.
US Markets React: Stocks and Bitcoin Drop After Announcement
USMCA, which aims to expand market access, has hit a snag as the US accuses Canada of restricting American exporters' access to its dairy market. Although a USMCA panel has ruled that some Canadian measures are valid, Washington continues to press for reforms. Trump's threat of similar tariffs on Canadian dairy and lumber signals a tougher stance in upcoming negotiations.
Trump Says No Tariffs If Canada Becomes 501 State
On the social media platform Truth Social, Trump declared, "The only way to solve this problem is for Canada to become our beloved 501 state." He asserted that Canada becoming part of the United States would eliminate tariffs entirely and improve trade relations. Following the announcement, US stock markets fell sharply, and Bitcoin fell below $80,000, currently trading at $79,506 per coin.
Warning of supply chain disruptions and economic risks
Economists have warned that a 50% tariff could disrupt supply chains in North America, driving up production costs. Canada is a major supplier to key US industries such as auto manufacturing and construction. Canadian steel and aluminum exports to the US were worth $35 billion annually before the tariffs were imposed. Despite this, Trump continues to insist that these policies are necessary to protect national interests and promote fairer trade between the two countries.
