Trump says Canada would have no tariffs as 51st state, as observers brace for trade war

President Donald Trump repeated his suggestion that Canada become the 51st on Sunday, noting that it would not be subjected to his incoming tariffs should the country join the U.S.

Trump has for weeks suggested the United States should take control of Canada through economic pressure.

Citing the flow of illicit drugs across the northern border, Trump signed an order Saturday to implement a 25% tariff on goods entering the United States from Canada. The order, which takes effect Tuesday, also puts a 10% duty on energy or energy resources from Canada. The order states, "gang members, smugglers, human traffickers, and illicit drugs of all kinds have poured across our borders and into our communities," adding that "Canada has played a central role in these challenges, including by failing to devote sufficient attention and resources or meaningfully coordinate with United States law enforcement partners to effectively stem the tide of illicit drugs." 

"We categorically reject the White House's slander of the Government of Mexico for having alliances with criminal organizations, as well as any intention to interfere in our territory," Sheinbaum said, adding that she instructed her administration officials to implement "tariff and non-tariff measures in defense of Mexico's interests." 

Trudeau said Canada would impose 25% tariffs on $155 billion of U.S. goods, including "immediate tariffs on $30 billion worth of goods effective Tuesday, followed by further tariffs on $125 billion worth of American products in 21 days." 

"I don't think we're not at all interested in escalating, but I think that there will be a very strong demand on our government to make sure that we stand up for the deal that we have struck with the United States," Canadian Ambassador to the U.S. Kirsten Hillman told ABC News' "This Week" on Sunday.