If a political analyst had said a year ago that the U.S. would soon make a serious play to annex Canada and absorb it as the 51st state, that analyst would have been laughed off the stage. Canada and the U.S. have been close allies and trading partners for so long that it’s impossible to imagine one taking an adversarial stance against the other.

Fast forward to 2025, and the unimaginable has become real. On a near daily basis, Donald Trump threatens to rain down new tariffs on Canadian goods. Trump has sought to justify the tariffs with nebulous claims about Canada not being serious about stopping the flow of fentanyl and undocumented immigrants into the U.S. — even as outlets like Forbes point out that according to the most recent statistics available, more undocumented people have been crossing from the United States into Canada than in the opposite direction, and “the data does not support the claim that Canada is a primary source of the drug entering the U.S.”

Meanwhile, Trump, Elon Musk and their cheerleaders have been explicitly calling for annexation. Canada, Trump has declared, will suffer extreme economic pressure unless it agrees to cede its sovereignty and be absorbed by its more powerful neighbor to the south.

Behind the scenes, Prime Minister Justin Trudeau has told political and business leaders that the threat is real, and in mid-February Newfoundland and Labrador Premier Andrew Furey returned from a visit to D.C. and declared the annexation plans were “chilling.”

So commonplace have these outlandish claims become that serious media outlets such as the AP are now running long analyses about what the process would look like if Canada were indeed to be “admitted” — or, more accurately, coerced — into the Union.

Meanwhile, Trump has begun implementing his threat to impose a punitive tariff regime.

The most immediate cost of the North American tariff wars that Trump has unleashed is inflation. During the election campaign, as he sought to tap into voter anger about post-COVID price spikes, the candidate was quick to dismiss critics’ assertions that tariffs simply raise prices on the purchasers of goods hit with these new taxes. Now, as president, he is implicitly acknowledging the inflation risk is real, and he talks about the short-term pain that U.S. consumers might have to bear as tariff walls go up around the country. That shouldn’t be a surprise to anyone, since the math is simple:

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