Tariffs: Who is getting ripped off?

I have two words for President Trump. No, not those. Trump never tires of accusing Canada of “ripping off” the United States. And of course, there is a trade deficit between the two countries. But no one ever seems to mention the huge population difference, which seems an important oversight. Per capita, the US spends a tiny fraction on Canadian goods compared with the amount spent on US goods by Canadians.

According to the US Census Bureau, US goods exports to Canada in 2023 were $354Bn, while imports were $418Bn. However, let’s also consider the difference in population between the two countries. In 2023, the US had a population of 343,477,335, while its once beloved neighbour had a population of just 39,299,105. This is how that shakes out, per capita:

This means that the average Canadian is spending over seven times as much on US goods as the average American spends on Canadian goods. And in order to level out the deficit, Canadians would have to lift their spending on US goods by over $1,600 to $10,636. This would be the equivalent of every person in Canada buying a premium laptop or tablet from the US. Or in other words, Canadians would have to spend more than the average American spends on Canadian goods again, on top of the $9,007 they already spend.

But apparently it is the US that is being ripped off.

Thankfully we’re not accused, in the UK, of “ripping off” the US. Yet we still have a blanket tariff of 10% applied to all our goods for… reasons. But like Canadians, we are also massively outspending our American friends.

So, although our trade in goods is notionally ‘balanced’, the average UK resident is spending almost five times on US goods as Americans spend on ours. In fact, this is replicated across the G7, with all G7 residents spending more per capita on US goods than vice versa.

Worth bearing in mind the next time you hear accusations of being “ripped off”.