Trump says Canada would have no tariffs as 51st state, as observers brace for trade war

President Donald Trump said the U.S. pays hundreds of billions of dollars to "subsidize" Canada, and Canada can avoid tariffs by becoming the 51st state.

President Donald Trump speaks to reporters as he signs executive orders in the Oval Office of the White House, Friday, Jan. 31, 2025. (AP Photo/Evan Vucci)

Citing the flow of illicit drugs across the northern border, Trump signed an order Saturday to implement a 25% tariff on goods entering the United States from Canada. The order, which takes effect Tuesday, also puts a 10% duty on energy or energy resources from Canada. The order states, "gang members, smugglers, human traffickers, and illicit drugs of all kinds have poured across our borders and into our communities," adding that "Canada has played a central role in these challenges, including by failing to devote sufficient attention and resources or meaningfully coordinate with United States law enforcement partners to effectively stem the tide of illicit drugs." 

Trump also said he would implement tariffs of 25% on goods from Mexico, as well as 10% on imports from China due to the flow of drugs across U.S. borders.

Press secretary Karoline Leavitt speaks during a briefing at the White House, Friday, Jan. 31, 2025. (AP Photo/Evan Vucci)

Trudeau said Canada would impose 25% tariffs on $155 billion of U.S. goods, including "immediate tariffs on $30 billion worth of goods effective Tuesday, followed by further tariffs on $125 billion worth of American products in 21 days." 

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"I don't think we're not at all interested in escalating, but I think that there will be a very strong demand on our government to make sure that we stand up for the deal that we have struck with the United States," Canadian Ambassador to the U.S. Kirsten Hillman told ABC News' "This Week" on Sunday. 

Danielle Wallace is a breaking news and politics reporter at Fox News Digital. Story tips can be sent to danielle.wallace@fox.com and on X: @danimwallace

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