Canada disputes Trump on trade, White House insists he's right

Canada is hitting back at remarks President Trump made in a private fundraiser.

March 15, 2018, 1:45 PM

President Donald Trump's leaked remarks from a private fundraiser have provoked a rebuke from Canada, disputing the president's claim that the U.S. has a trade deficit with its northern neighbor.

But Trump and the White House Thursday insisted he's right.

"Canada and the United States have a balanced and mutually beneficial trading relationship," Canada's ministry of foreign affairs said in a statement to reporters. "According to their own statistics, the U.S. runs a trade surplus with Canada."

The Canadian statement comes after audio surfaced of remarks Trump made at a Wednesday fundraiser in St. Louis, obtained by the Washington Post, in which Trump recounted a conversation with Canada's Prime Minister Justin Trudeau.

According to a Post transcript, Trump joked that he repeatedly disputed Trudeau's assertion that the U.S. does not have a trade deficit with Canada even though he, Trump, didn't know whether his claim was true.

“Nice guy, good-looking guy, comes in — ‘Donald, we have no trade deficit.’ He’s very proud because everybody else, you know, we’re getting killed," Trump said. "So, he’s proud. I said, ‘Wrong, Justin, you do.’ I didn’t even know. ... I had no idea. I just said, ‘You’re wrong.’ You know why? Because we’re so stupid."

A Republican source who attended the fundraiser confirmed the authenticity of the Washington Post's account to ABC News, and the president himself tweeted in reaction to the story Thursday morning.

The Office of the U.S. Trade Representative, which is a part of the Executive Office of the President, does not support the president's claim, according to its own website.

"U.S. goods and services trade with Canada totaled an estimated $627.8 billion in 2016," the USTR's website says. "Exports were $320.1 billion; imports were $307.6 billion. The U.S. goods and services trade surplus with Canada was $12.5 billion in 2016."

But White House press secretary Sarah Sanders stood by the president's claim during Thursday's briefing, explaining the president was actually referring to the U.S. trade deficit with Canada on goods, omitting the large U.S. trade surplus on services.

In the February 2018 Economic Report of the President, the White House argued specifically it would be misleading to characterize the U.S. trade relationship with a foreign country based only on trade in good.

"Focusing only on the trade in goods alone ignores the United States’comparative advantage in services, which rose as a share of U.S. exports to 33.5 percent through 2017:Q3," the economic report says.

The comments amount to the most recent flare-up between the U.S. and Canada as negotiations continue between the two countries and Mexico over the future of the North American Free Trade Agreement, or NAFTA.

The president openly dished on the status of those negotiations at the Missouri fundraiser and was similarly unsparing of Mexico in his remarks.

"I tell people openly because the best deal is to terminate it and then make a new deal," Trump said, according to the Washington Post transcript.

"But I don't know that we can make a deal because Mexico is so spoiled with this horrible deal that they've lived with, from our standpoint horrible."

ABC's Jordyn Phelps and Ben Gittleson contributed to this report.

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