US President Donald Trump said he will discuss the punishing tariffs he has levied on Canada and Mexico with both countries on Monday, after arguing that Americans may feel economic “pain” from the 25 per cent duties but that it will be “worth the price”.
Speaking to reporters after he flew back to Washington on Sunday evening from a weekend in Florida, Trump said he was “speaking with Prime Minister [Justin] Trudeau tomorrow morning, and I’m also speaking with Mexico tomorrow morning”.
“I don’t expect anything very dramatic,” he added.
A fervent supporter of tariffs, Trump had always maintained that their impact would be borne by foreign exporters, without being passed on to American consumers, contradicting the opinion of a broad range of experts.
Earlier on Sunday he acknowledged, in a series of messages on his Truth Social network, that Americans may feel economic “pain” from his tariffs, but argued it would be “worth the price” to secure US interests.
China, Mexico and Canada are the top three US trade partners and all have vowed to retaliate when the tariffs take effect Tuesday.
“Will there be some pain? Yes, maybe (and maybe not!)” Trump wrote Sunday morning in all-caps on his Truth Social media platform.
“But we will Make America Great Again, and it will all be worth the price that must be paid.”
Analysts expect the trade war to slow US growth and increase prices, at least in the short term, something the president had resisted acknowledging after frustration over rising costs was seen as a major factor in his 2024 election win.
Seeking to limit a spike in fuel prices, Trump has put the levy on energy imports from Canada at only 10pc.
The president has cited illegal immigration and the trafficking of the deadly opioid fentanyl as reasons for the “emergency” measures.
But on Sunday he also expressed general outrage at trade deficits, which he has long viewed as signs of unfair treatment against the United States.
“The USA has major deficits with Canada, Mexico, and China (and almost all countries!), owes 36 trillion dollars, and we’re not going to be the ‘Stupid Country’ any longer,” he wrote.
The tariffs announcements capped an extraordinary second week of Trump’s new term, with the president facing the worst US aviation disaster in years even as his administration moved to drastically overhaul the government in actions decried by critics as illegal.
‘51st state’
In a separate social media post, Trump took particular aim at Canada, repeating his call for America’s northern neighbour to become a US state.
Claiming the United States pays “hundreds of billions of dollars to subsidise Canada”, Trump said that “without this massive subsidy, Canada ceases to exist as a viable country”.
“Therefore, Canada should become our cherished 51st state,” he said, reiterating the expansionist threat against one of his country’s closest allies.
The US Census Bureau says the 2024 trade deficit in goods with Canada was $55 billion.
Canadian backlash was swift, with video posted to social media showing fans at a Toronto Raptors game on Sunday booing during the US national anthem.
Trudeau vowed on Saturday to hit back with 25pc levies on select American goods worth Can$155bn (US$106.6bn), with a first round on Tuesday followed by a second one in three weeks.
Leaders of several Canadian provinces have already announced retaliatory actions as well, such as the immediate halt of US liquor purchases.
The White House has not publicly announced what actions could end the tariffs.
“It’s hard to know what more we can do, but we’re obviously open to any other suggestions that come our way,” Canada’s ambassador to the United States Kirsten Hillman told ABC News on Sunday.
Mexican President Claudia Sheinbaum said she, also, was awaiting Trump’s response to her proposal for dialogue.
She said she had directed her economy minister to “implement Plan B”, which includes unspecified “tariff and non-tariff measures”, promising to detail later today the steps she intends to take.
Trump said on Sunday he also planned to hit the European Union with tariffs “pretty soon”, to which the EU said earlier it would “respond firmly”.
Musk says shutting down USAID in govt cost-cutting drive
The drastic trade actions follow similarly sharp efforts by Trump’s administration to quickly overhaul the federal government in his first two weeks.
Billionaire Elon Musk, who is heading Trump’s efforts to shrink the federal government, gave an update on the effort earlier today, saying they are working to shut down the US foreign aid agency USAID.
Musk, who is also CEO of Tesla and SpaceX, discussed the Department of Government Efficiency (Doge) in a Monday social media talk on X, which he also owns. Trump has assigned Musk to lead a federal cost-cutting panel.
The conversation, which included former Republican presidential candidate Vivek Ramaswamy and Republican Senator Joni Ernst and Mike Lee, began with Musk saying they were working to shut down the United States Agency for International Development (USAID).
“It’s beyond repair,” Musk said, adding that President Trump agrees it should be shut down.
Yesterday, Reuters reported the Trump administration removed two top security officials at USAID during the weekend after they tried to stop representatives from Doge from gaining access to restricted parts of the building, three sources said.
USAID is the world’s largest single donor. In fiscal year 2023, the US disbursed $72bn of assistance worldwide on everything from women’s health in conflict zones to access to clean water, HIV/AIDS treatments, energy security and anti-corruption work. It provided 42pc of all humanitarian aid tracked by the United Nations in 2024.
The website of USAID appeared to still be offline on Saturday and some users could not access it on Sunday. USAID has a staff of more than 10,000 people.
Trump has ordered a global freeze on most US foreign aid as part of his “America First” policy which is already sending shockwaves around the world. Field hospitals in Thai refugee camps, landmine clearance in war zones, and drugs to treat millions suffering from diseases such as HIV are among the programs at risk of elimination.
Speaking more broadly about cutting US expenses and fraud, Musk estimated the Trump administration can cut $1tr from the US deficit next year.
He asserted, for example, that “professional foreign fraud rings” are stealing money vast sums by masquerading as or creating fake digital US citizens. Musk did not offer any evidence to support his fraud claim or explain how he reached the amount of $1tr.
The online chat comes amid concerns about Musk’s access to the Treasury system, first reported by the New York Times, that sends out more than $6tr per year in payments on behalf of federal agencies and contains the personal information of millions of Americans who receive Social Security payments, tax refunds and other monies from the government.
Democrat Peter Welch, a member of the Senate Finance Committee, called for explanations as to why Musk had been handed access to the payment system and what Welch said included taxpayers’ sensitive data.
“It’s a gross abuse of power by an unelected bureaucrat and it shows money can buy power in the Trump White House,” Welch said in an emailed statement.
Musk has Trump’s support. Asked yesterday if Musk was doing a good job, Trump agreed.
“He’s a big cost-cutter. Sometimes we won’t agree with it and we’ll not go where he wants to go. But I think he’s doing a great job. He’s a smart guy. Very smart. And he’s very much into cutting the budget of our federal budget.”
Musk’s team have been given access to or taken control of numerous government systems.
Reuters reported on Friday, that aides to Musk charged with running the US government human resources agency have locked career civil servants out of computer systems that contain the personal data of millions of federal employees, according to two agency officials.
Musk has moved swiftly to install allies at the agency known as the Office of Personnel Management (OPM). A team including current and former employees of Musk assumed command of OPM on January 20, the day Trump took office, the sources added.
Since taking office 11 days ago, Trump has embarked on a massive government makeover, firing and sidelining hundreds of civil servants in his first steps toward downsizing the bureaucracy and installing more loyalists.
