Why Donald Trump Is Wrong About American Banking In Canada

Hot on the heels of President Donald Trump's tumultuous talk of tariffs being imposed (or temporarily delayed) on Canadian imports, the second-term president has expressed irritation with Canada's banking restrictions as they pertain to U.S. banks within the country's borders.

On March 4, 2025, Trump posted on his Truth Social profile: "Canada doesn't allow American Banks to do business in Canada, but their banks flood the American Market. Oh, that seems fair to me, doesn't it?" Trump's post may be dripping with sarcasm, as well as misinformation. President Trump might be confused about how United States banks operate internationally, or might be dogging one of the United States' top allies in an attempt to distract from U.S. stocks plummeting in response to his own tariff threats.

Potential tactics aside, Trump is wrong about U.S. banks not being allowed to work in Canada, full stop. U.S. banks can operate in Canada. But due to differing banking practices, preferences, and stricter regulations, U.S. banks are more restricted in Canada than here at home.

Canada isn't a world finance center in the same way the U.S. is, but the nation has a banking system about as robust as ours. Just like the U.S. has its own highly recognizable, popular, and powerful banks, Canada has its own "Big 6." You will likely know some of Canada's big banks already. They include TD Bank, CIBC, and BMO. Rather than "flooding" the U.S. market, the Canadian Bankers Association tells The New York Times that the top six Canadian banks hold under 3.5% of U.S. banking assets.

These Canadian banks, like other international banks, are drawn to the U.S. market. Here, more highly-profitable banking products and activities are available for cross-border banks to tap into. Banks in the U.S. can deal in higher-profit products due to fewer regulations and more relaxed attitudes towards regulations in general. For a fun afternoon, search "U.S. bank scandal" on your web browser for a taste of just how relaxed these regulations can be.

Meanwhile, in Canada, stricter regulations are at play. Canadians also largely prefer banking in person, so physical banks and kiosks take precedence over borderless, space-less web operations, as is increasingly common in the States. U.S. banks can operate in Canada, and some do. Establishing a strong physical presence in Canada would be a pricey venture for any U.S.-based bank, and not a very cost-efficient move if stronger regulations would limit usual American banking practices beyond borders.

At present, 16 U.S. banks currently operate in Canada, although at more restricted levels than they would here in the states. Despite Trump's ire with a country that has long been a U.S. ally, the state of Canadian banking is practically a nonissue on Wall Street. While plenty of Wall Street power brokers might be panicking about Trump's proposed tariffs and those tariffs' affect on the stock market, as well as mergers and acquisitions, the expansion of U.S. banks into Canada has not been a concern of Wall Street thus far.

U.S.-based finance leaders may be big fans of further deregulating the market, but so far those leaders have not joined Trump in calling for expansion into a much more highly-regulated banking market. No U.S. banks have cried out for further Canadian expansion. Major U.S. banks like J.P. Morgan Chase and Citibank have long operated in Canada, with Citibank serving Canadians for almost 100 years.

While it may seem like Trump's critique of Canadian banks is random, perhaps there is a bruise being poked. Trump's Truth Social comments were posted a few hours before Canadian Prime Minister Justin Trudeau announced that Trump would temporary delay tariffs on Canada.