Here is the letter* from Prime Minister François Legault published Wednesday morning on the site specializing in American politics The Hill.
Published at 10:00 a.m.
François Legault
Prime Minister of Quebec
Tariffs can backfire on the United States, especially when imposed on longtime allies.
If President-elect Donald Trump follows through on his threat and imposes 25% tariffs on all Canadian exports, the Canadian economy will suffer. But it will also hurt the U.S. economy, many of its businesses, and especially ordinary Americans by causing a new surge in inflation.
Like the president-elect, I come from the business world. I understand his desire to build a balance of power and make the United States richer. We both share the desire to increase border security and control immigration, which Quebec has been asking the Canadian government for several years.
The United States’ request that Canada do its share in military spending is also an objective that we share, especially since Quebec is an important player in the defense sector.
However, Mr. Trump should give Canada time to meet his expectations on these two issues before imposing tariffs that would do great harm to both our countries. Since the free trade agreement signed by President Ronald Reagan, the economies of Quebec (to speak of what I know best) and the United States have been so integrated that customs tariffs on our products would inflict serious harm on the American economy.
The threat of tariffs has already caused much uncertainty, hampering investment on both sides of the border. Our analysis concludes that 25% tariffs on exports from Canada and Mexico would reduce U.S. GDP by at least 1% over a year, not to mention inflation.
For example, Quebec supplies 64% of the raw aluminum used by American companies. The United States does not have the capacity to produce aluminum to replace this crucial input and will not have it in the medium term. A 25% tariff would therefore only increase the price of beer cans, car parts, airplane parts and a host of other products for American consumers and businesses. .
Quebec is also a major supplier of American military aeronautical equipment, including engines, landing gear and flight simulators. These products are not replaceable in the short to medium term and imposing 25% tariffs will amount to a 25% increase in costs for American companies and, ultimately, the Pentagon.
In terms of national security, the United States is rightly concerned about China’s near-monopoly on critical strategic minerals, such as natural graphite, lithium, gallium, and certain rare earths. Quebec can provide these strategic materials and help America free itself from China’s influence. Imposing 25% tariffs on imports of its critical strategic materials could only harm U.S. national security objectives.
The president-elect’s concern to reduce his trade balance with the rest of the world is entirely legitimate, but by attacking Canada, he is targeting the wrong target. Canada’s trade surplus with the United States is due to imports of cheap, reliable energy that fuel the American economy.
Without these imports of Canadian oil, gas and electricity, the United States has a $58 billion trade surplus with Canada.
Quebec exports electricity to the United States, notably via a transmission line to New York. This clean, reliable, cheap electricity is a tremendous benefit to New Yorkers and their businesses. It reduces the cost of energy for Trump Tower, to cite just one example.
Canada will not become the 51e State of the Union, but our economies are so intertwined that in terms of trade we already have a customs union. This free trade of goods between our two countries, established by Ronald Reagan and Prime Minister Brian Mulroney, has considerably enriched our economies and our people. Instead of turning against each other, let’s continue to build a great North American economic power: it’s in our mutual interest.
*DeepL translation edited by The Press
Read “Open letter – François Legault warns Americans about customs tariffs”
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