Speaking virtually to the World Economic Forum in Davos, Switzerland, Trump also said he will press NATO members to increase their defence spending target to five per cent of GDP.

President Donald Trump reportedly elicited gasps from the international crowd gathered at the World Economic Forum in Davos, Switzerland, on Thursday when he suggested that Canada could become a U.S. state in order to avoid the sweeping tariffs he wants to impose.

The president complains of a "tremendous" trade deficit with its neighbour, saying the US does not need Canadian energy, vehicles or lumber.