Donald Trump calls for Canada to become 51st state over tariffs
- Published
The US President Donald Trump says Canada can avoid higher taxes if they join the United States of America and become its 51st state in a post on social media on Tuesday.
Mr Trump has announced he will further raise taxes, called tariffs, on steel and aluminium coming into the US from neighbours Canada.
This means it will be more expensive for Canadian companies to do business with United States (US).
When Donald Trump first introduced these tariffs on Canadian metals they were set at 25% but on Tuesday Mr Trump said he would increase it to 50%.
On Monday, the Canadian state of Ontario announced a 25% extra charge on electricity going to the US.
Ontario's Premier Doug Ford said: "If the US escalates, I will not hesitate to shut off electricity completely."
President Trump called the move an "abusive threat" to America, adding "the only thing that makes sense is for Canada to become our cherished Fifty First State. This would make all Tariffs, and everything else, totally disappear."
The USA is made up of 50 states, like Texas or California. President Trump is saying that Canada should become one of those. But Canadian politicians have said that would never happen.
- Published4 February
Canada and US friendship tested (from February 2025)
What has Donald Trump announced?
A 25% tariff on steel and aluminium was due to be put in place on Wednesday but Donald Trump said he will increase this to 50%.
This means that if there was an item worth $100, a Canadian company would have to pay the US government an additional charge of $50, in order to be able to sell the product in the United States.
Posting on social media, President Trump said: "Based on Ontario, Canada, placing a 25% Tariff on 'Electricity' coming into the United States, I have instructed my Secretary of Commerce to add an ADDITIONAL 25% Tariff."
Canada's tariff on electricity would be expected to affect roughly 1.5 million American homes and businesses in the northern border states of New York, Michigan and Minnesota.
Mr Trump added, "the only thing that makes sense is for Canada to become our cherished Fifty First State. This would make all Tariffs, and everything else, totally disappear."
He has also threatened new tariffs on cars if Canada doesn't drop its tariffs imposed on the US.
What is a tariff?
Companies all over the world buy and sell things to one another.
This is known as trade - and it means globally countries can access all sorts of goods and services as well as creating stronger relationships with one another.
Goods and services can be imported and exported.
Imports: This is when goods and services are brought in from other countries to be sold. For example, the UK imports bananas as they are a fruit that does not grow naturally in the UK.
Exports: This is when goods and services are sent to other countries to be sold. For example, lots of cars are made in the UK which are then sent to other countries to be sold.
A government can decide to charge taxes on imports or exports to or from their country - this is known as a tariff.
The money that is raised from a tariff may then be used by that government to fund other things for their citizens.
Tariffs are a common tax in trade, used by many different governments.
Doug Ford is the Premier for Ontario
What is the reaction?
When Ontario's Premier Doug Ford announced the extra 25% charge on US-bound electricity on Monday he said:
"President Trump's tariffs are a disaster for the U.S. economy. They're making life more expensive for American families and businesses."
"I will not hesitate to increase this charge if necessary," he said. "If the US escalates, I will not hesitate to shut off electricity completely."
Canada's incoming Prime Minister has rejected the suggestion of the country joining the US, saying: "Canada will never be part of America".
What is the stock market and why does it matter?
Following these announcements, the US stock market has declined.
To understand the stock market, first you need to know what shares and stocks are.
If a person owns shares in a company, it means they own part of that company. Their part ownership of that company may be much, much smaller than 1%, but they are still a part owner.
You can also own shares in other things other than companies, for example trust funds.
If a person owns stocks, that means that they might have multiple shares, often in different companies.
Stocks and shares can be bought and sold through a stock exchange.
There are many stock exchanges around the world, including the London Stock Exchange, the New York Stock Exchange and the Tokyo Stock Exchange.
The value of stocks can change – with prices climbing or dropping suddenly.
Changes in how countries do business with one another, or how well a company is doing, can have a massive affect on the value of stocks.
This is why you might hear adults talking about the stock market doing well or perhaps the stock market "crashing" – this is when things go very wrong.