A White House briefing note justifying the tariffs on Canada, Mexico, and China. 1 of 3 FOR IMMEDIATE RELEASE 02/02/25   President Trump’s Tariffs Are a Necessary Solution  Background Information •TARIFFS STRENGTHEN THE AMERICAN ECONOMY, RAISE WAGES, AND CREATE JOBS: ◦According to a 2024 analysis of tariffs done by McKinsey & Company, “tariffs on imported goods could reduce competition for US producers, increase demand for US-made goods, and create jobs.” ◦A 2024 study on the effects of President Trump’s tariffs in his first administration found that they “strengthened the U.S. economy,” and “led to significant reshoring” in industries like manufacturing and steel production. ◦President Trump’s global tariffs on steel created over 4,000 new American jobs. ◦An analysis from the Atlantic Council found that “tariffs would create new incentives for US consumers to buy US-made products.” ◦Former Biden Treasury Secretary Janet Yellen affirmed last year that tariffs do not raise prices: “I don’t believe that American consumers will see any meaningful increase in the prices that they face.” ◦President Trump’s tariffs on steel and China “reduced imports of affected steel products by 24 percent…and increased U.S. production of steel products by 1.9 percent.” ◦A bipartisan group of Senators wrote Joe Biden in September 2024 asking him to reimpose steel tariffs on Mexico. •BRINGING MANUFACTURING BACK TO AMERICA: ◦Hyundai’s CEO stated on January 14th that investing in the US is the best antidote to potential tariffs and touted the company’s newly built $13 billion plant in Georgia. ◦Hyundai Steel is actively considering building a US plant as tariffs loom. ◦Fortune Magazine recently wrote: “Trump’s tariff threats are working: Audi ponders a U.S. manufacturing site—and Porsche might join” ◦Auto suppliers Bosch and Continental have begun developing plans to manufacture in the US in order to avoid tariffs. ▪“Wherever we can further localize, and it makes sense, we will do it” – Continental CEO Nikolai Setzer   **** Canada – 25% on Canadian goods, 10% on Canadian Energy   •DEFICITS: ◦The annual trade deficit with Canada under the first Trump Administration averaged $18.7 billion; under Biden, it averaged $61.5 billion. ◦The average annual trade deficit with Canada increased 228.9% under Joe Biden and Kamala Harris. ◦The lowest annual deficit with Canada under Biden (2021 – $47.7B) was nearly double the highest annual deficit under President Trump (2019 – $25.8B). •TARIFFS WORK: ◦Exports to the U.S. account for 21% of Canada’s GDP. ◦Canada’s ambassador to the US Kirsten Hillman told the Associated Press the country is prepared to buy more American products in order to “appease Trump’s tariff threat.” ◦CEO of $14 billion aluminum manufacturer Alcoa said the company will likely send its Australian output to the US if the US imposes tariffs on Canadian imports. ◦Canada has pledged to spend $1 billion to hire more border agents in response to the threat of tariffs. •IN ADDITION TO THE TRADE DEFICIT, THE UNITED STATES ALSO SUBSIDIZES CANADA’S TERRITORIAL DEFENSE: ◦Canada currently benefits from U.S. spending per year on NORAD defenses, and protection from the United States Air Force from foreign incursions. The US covers “about 60 percent of the bill for NORAD.” ◦In gross spending, Canada allocates only about 3% of every U.S. dollar spent on defense to defending their own territories, $916 billion in the U.S. vs. $27.2 billion in Canada. ▪As a percentage of GDP, Canada spends 62% less per year than the United States on defense, 3.4% of GDP in the U.S. compared to 1.3 percent in Canada. ◦A 2022 announcement from former Canadian Defense Minister Anita Anand outlined only a $4.9 billion investment in NORAD over six years and $38.6 billion “over twenty years on an accrual basis.” •FENTANYL/BORDER: ◦Before 2020, most fentanyl was imported into Canada;