Canada–United States trade relations

This article has multiple issues. Please help improve it or discuss these issues on the talk page. (Learn how and when to remove these messages)

This article may require cleanup to meet Wikipedia's quality standards. The specific problem is: copyediting and grammar improvement. Please help improve this article if you can. (March 2018) (Learn how and when to remove this message)

|

This article's lead section may be too short to adequately summarize the key points. Please consider expanding the lead to provide an accessible overview of all important aspects of the article. (March 2018)

|

This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed.
Find sources: "Canada–United States trade relations" – news · newspapers · books · scholar · JSTOR (March 2018) (Learn how and when to remove this message)

|

Parts of this article (those related to article) need to be updated. Please help update this article to reflect recent events or newly available information. (May 2025)

|

(Learn how and when to remove this message)

The trade relationship of the United States with Canada is the largest in the world.

In 2023, the goods and services trade between the two countries totaled US$916 billion with U.S. exports valued at US$440 billion and Canadian exports at US$476 billion, resulting in a United States US$36 billion trade deficit with Canada.[1] Canada has historically held a trade deficit with the United States in every year since 1985 in net trade of goods, excluding services.[2] The trade relationship between the two countries crosses all industries, and both nations are one of the largest trading partners of the other.

The trade across Ambassador Bridge, between Windsor, Ontario and Detroit, Michigan, alone is equal to all trade between the United States and Japan.[3][4]

## Before NAFTA

[edit]

Canadian politicians have debated free trade since 1866.[5] Trade with the United States was the main topic in the 1911 Canadian Federal Election, where it was proposed by the Liberal Party of Canada and opposed by the Conservative Party, as well as in the 1984 and 1988 Canadian Federal Election, where the Progressive Conservative Party promoted a free trade agreement, opposed by the Liberal Party.[citation needed] Although there were many bilateral agreements reducing tariffs, a free trade agreement was not reached until the Canada–United States Free Trade Agreement in 1987.[6]

## North American Free Trade Agreement (NAFTA)

[edit]

The Canada–United States Free Trade Agreement laid the groundwork for a multilateral and multicultural agreement between the United States, Mexico, and Canada. On January 1, 1994, the North American Free Trade Agreement (NAFTA) came into effect. The agreement has helped to increase trade amongst all three member countries. Although there is some dysfunction between the countries, especially in the area of automobiles and agriculture, the trends are negligible as the agreement has arguably been a boon for all nations involved.[4]

Canadian Prime Minister Justin Trudeau greets U.S. Ambassador Kelly Craft in 2019.

## Disputes

[edit]

There are several disputes arising from the bilateral trade between the two nations. The United States placed Canada on its Special 301 Report intellectual property rights enforcement (although under the mildest category of "rebuke"). Other products from Canada under dispute include softwood lumber, beef, tomatoes, and other agricultural products.

The heightened border security as a result of the 2001 terrorist attacks has been an issue of concern for businesses in both countries. The issue has become less of a concern since the attacks with the development of new technology, registration, training, and fewer rules. However, a midpoint estimate of US$10.5 billion costs to businesses in delays and uncertain travel time have affected trade.[7]

One ongoing and complex trade issue involves the importation of cheaper prescription drugs from Canada to the United States. Due to the Canadian government's price controls as part of their Single-payer medical system, prices for prescription drugs can be a fraction of the price paid by consumers in the unregulated U.S. market. While laws in the United States have been passed at the national level against such sales, specific state and local governments have passed their own legislation to allow the trade to continue. [citation needed]

### Softwood lumber

[edit]

Main article: Canada–United States softwood lumber dispute

Log driving near Vancouver, British Columbia, Canada

The Canada–United States softwood lumber dispute is one of the most significant and enduring trade disputes in modern history. The dispute has had its biggest effect on British Columbia, the major Canadian exporter of softwood lumber to the United States.

The heart of the dispute is the claim that the Canadian lumber industry is unfairly subsidized by the federal and provincial governments. Specifically, most timber in Canada is owned by provincial governments. The price charged to harvest the timber (the "stumpage fee") is set administratively rather than through a competitive auction, as is often the practice in the United States. The United States claims that the provision of government timber at below market prices constitutes an unfair subsidy. Under U.S. trade remedy laws, foreign goods benefiting from subsidies can be subject to a countervailing duty tariff to offset the subsidy and bring the price of the product back up to market rates.

### Trade war

[edit]

See also: 2025 United States trade war with Canada and Mexico

During the Second inauguration of Donald Trump, President Trump threatened Canada and Mexico with 25% tariffs across multiple industries.

Due to Trump's tariff threats, Ontario Premier Doug Ford proposed halting US liquor imports. Ford also warned that energy exports to the US will be cut if Trump imposes tariffs. In addition to potentially cutting power to Michigan, New York state, and Minnesota, the Ford government sought to restrict exports of critical Canadian minerals needed for electric vehicle batteries and the supply chain.[8][9]

On 1 February 2025, President Trump declared a national security emergency under the terms of the International Emergency Economic Powers Act and enacted 25% tariffs on all goods imported from Canada into the United States, excluding energy imports which became subject to a 10% tariff, and suspended the de minimis rule while the emergency is in place. Canada responded by initiating retaliatory 25% tariffs on select goods imported into Canada from the United States.[10] According to the Canadian Chamber of Commerce, Saint John, New Brunswick, followed by Calgary, will be the most impacted cities in Canada as a result of the Trump tariffs.[11]

## Proposals

[edit]

Since the September 11th attacks, there has been a debate on whether there should be further North American integration. Some have proposed the adoption of the Amero under the North American Currency Union as the official currency of North America.[citation needed] While these discussions are more prevalent in Canada[citation needed], studies have shown that United States citizens would not object to economic integration. Former U.S. Ambassador Paul Cellucci stated, however, "Security trumps trade" in the United States, and so as long as Canada is a possible point of entry for terrorists, such integration seems unfeasible.[12]

## By sector

[edit]

### Energy

[edit]

Trade in energy products, 2008–2018

The strength of the Canada–U.S. relationship is demonstrated by impressive bilateral trade of approximately $1.9 billion a day, along the world's longest undefended border. Energy trade is the largest component of this cross-border commerce. Canada has the third-largest oil reserves (after Saudi Arabia and Venezuela), thanks to its oil-sands resources. The United States has historically been Canada's only foreign market for natural gas, oil, and hydropower. In 2010, almost 100% of Canada's exports in these commodity classes were destined for the United States. Canada is the largest foreign supplier of crude oil (25% of oil imports) and natural gas to the United States. In short, this energy relationship has enhanced U.S. energy security and provided Canada with a steady demand for its energy exports.

However, this highly integrated U.S.–Canada energy relationship may change dramatically in the near future. U.S. oil and natural gas production and reserves are expanding because of growing tight oil and shale gas developments. Furthermore, the U.S. Energy Information Administration (EIA) forecasts slower growth in U.S. oil and natural gas consumption in the coming decades until 2035. Consequently, the United States no longer appears to be an unlimited market for Canadian energy, leaving Canada seeking new export destinations.

Both Canada and the United States are increasingly reliant on foreign investment to develop their resource sectors, with Asia serving as an important source of capital. Initially, Asian investors focused on project investments as minority joint venture partners, but they are now showing a growing interest in owning production companies. The objectives of Asian investors for investing in the North American energy sector include seeking attractive financial returns on investment and viewing North America as an energy supply source for their economies. The expanding energy investment and trade between North America and Asia have the potential to be mutually beneficial.[13]

### Agriculture (Dairy)

[edit]

Another source of tension has been Canada's protection of their dairy farmers. Canada is the only industrialized country in the world to still use a "supply management system" for regulating the supply of dairy products.[14] The US sees the system as protectionist because after an annual import quota has been reached, a large tariff (240% for milk, 300% for butter) is applied to any additional imports.[14] However, many of these rates were negotiated in the USMCA trade agreement, the US has similar "above-quota" tariffs on imports from Canada, and the quotas are rarely - if ever - reached.[15]

## Media and culture

[edit]

See also: List of Canadian television stations available in the United States and List of United States stations available in Canada

This section does not cite any sources. Please help improve this section by adding citations to reliable sources. Unsourced material may be challenged and removed.
Find sources: "Canada–United States trade relations" – news · newspapers · books · scholar · JSTOR (May 2025) (Learn how and when to remove this message)

|

Because English is the majority language in both countries, and accents and dialects on both sides of the border are (relatively) similar and is a variety of North American English (as compared to the British or Australian English), both high culture and mass media are easily traded. Both countries have minority-language media—Canada's large francophone population and the United States' large hispanophone population—as well as immigrants and indigenous language speakers, but cultural trade mostly concerns English-language media.

The major difference is that the U.S. media market is more than 15 times larger, meaning that the Americans enjoy greater economies of scale. Historically, this has always been the case since the 19th century, when Canada was flooded with American books, but the beginning of Canada's cultural protectionism dates to the 1920s, when Canada's radio market was dominated by American broadcasts, leading cultural nationalists to form the Canadian Radio League, which lobbied for a publicly funded broadcaster to compete with U.S. stations. In the 1950s, television experienced a similar dispute, with Canadian stations airing U.S. programming and U.S. stations broadcasting into Canada, leading to the creation of CBC Television. Since the 1970s, Canadian radio and television stations have been required by law to air a minimum percentage of Canadian content.

One source of tension is a difference in philosophy: the Canadian position is that its culture is a prerequisite for safeguarding its nationhood and should thus be excluded from free trade agreements, whereas American negotiators see media as just another commodity. This difference came to light during the dispute over "split-run" magazines in the 1990s. Split-runs are magazines that produce a slightly modified edition (for example, for the Canadian market) and resell much of the advertising space to Canadian advertisers. Canadian publishers argued that the Americans were poaching all their advertising revenue without producing substantial Canadian content. American publishers and the U.S. government countered that banning "split-runs" was illegal under international trade law. There have also been disputes over the generous tax credits that the Canadian federal and provincial governments give to television and film productions. This, combined with a weaker Canadian dollar caused American filmmakers to complain during the 1990s that "runaway productions" were hurting American employment in the film industry, especially in California.

## See also

[edit]

* NAFTA's effect on United States employment
* North American Forum on Integration
* North American SuperCorridor Coalition
* Security and Prosperity Partnership of North America

## References

[edit]

1. ^ Kitamura, Kyla H. (February 13, 2025) [March 17, 2025]. U.S.-Canada Trade Relations. Congressional Research Service (CRS) (Report). p. 3. Retrieved April 23, 2025.`{{cite report}}`: CS1 maint: ref duplicates default (link)
2. ^ Division, US Census Bureau Foreign Trade. "Foreign Trade: Data". www.census.gov.
3. ^ "The Embassy of the U.S.A., Ottawa - United States - Canada Relations". Archived from the original on 2008-02-08. Retrieved 2008-05-01.
4. ^ a b "Apps - Access My Library - Gale". Access My Library. Retrieved 2016-08-27.
5. ^ "Canada's Historical Search for Trade Markets". Canadian Global Affairs Institute. Retrieved 2025-05-07.
6. ^ Farnsworth, Clyde H.; Times, Special To the New York (1987-12-12). "U.S.-Canada Trade Pact's Details Listed". The New York Times. ISSN 0362-4331. Retrieved 2025-03-06.
7. ^ "CRS Report for Congress" (PDF). Nationalaglawcenter.org. Archived from the original (PDF) on 2017-08-09. Retrieved 2016-08-27.
8. ^ "Ontario premier suggests stopping US liquor imports over Trump tariff threat". 13 Dec 2024.
9. ^ "Canadian official threatens to cut off energy to the United States". CNN. 13 Dec 2024.
10. ^ "Canada announces $155B tariff package in response to unjustified U.S. tariffs". www.canada.ca. February 2025. Retrieved 2025-02-01.
11. ^ "Saint John tops list of Canadian cities with most to lose in U.S. tariff war". CBC News. February 13, 2025. Retrieved February 14, 2025.
12. ^ "Cellucci's Message," National Post, March 26, 2003.
13. ^ "2013 Summit Working Papers : The U.S.-Canada Energy Relationship and the Growing Role for Asia" (PDF). Nbr.org. Retrieved 2016-08-27.
14. ^ a b Northam, Jackie (2018-07-10). "Why President Trump Hates Canadian Dairy — And Canada Insists On Protecting It". NPR.org. Archived from the original on 2018-07-10. Retrieved 2018-07-11.
15. ^ Cohen, Ben (2025-04-01). "Trump's Misleading Claim on Canadian Dairy Tariffs". FactCheck.org. Retrieved 2025-04-30.

* v
* t
* e

Foreign relations of Canada

Bilateral relations

| Africa|

* Algeria
* Burkina Faso
* DR Congo
* Egypt
* Ethiopia
* Ivory Coast
* Kenya
* Lesotho
* Madagascar
* Mali
* Morocco
* Mozambique
* Namibia
* Nigeria
* Senegal
* Sierra Leone
* South Africa

|

Americas|

* Argentina
* Barbados
* Brazil
* Chile
* Colombia
* Cuba
* Dominican Republic
* El Salvador
* Grenada
* Haiti
* Jamaica
* Mexico
* Panama
* Peru
* Trinidad and Tobago
* United States
* Uruguay
* Venezuela

Asia|

* Afghanistan
* Armenia
* Azerbaijan
* Bangladesh
* Bhutan
* Brunei
* Cambodia
* China
* Hong Kong
* Georgia
* India
* Indonesia
* Iran
* Iraq
* Kurdistan Region
* Israel
* Japan
* Kazakhstan
* Lebanon
* Malaysia
* Mongolia
* Nepal
* North Korea
* Pakistan
* Palestine
* Philippines
* Qatar
* Saudi Arabia
* Singapore
* South Korea
* Syria
* Taiwan
* Thailand
* Turkey
* United Arab Emirates
* Vietnam

Europe|

* Albania
* Austria
* Belgium
* Bosnia and Herzegovina
* Bulgaria
* Cyprus
* Czech Republic
* Denmark
* Estonia
* Finland
* France
* Germany
* Greece
* Holy See
* Hungary
* Iceland
* Ireland
* Italy
* Latvia
* Lithuania
* Montenegro
* Netherlands
* Norway
* Poland
* Portugal
* Romania
* Russia
* Serbia
* Slovenia
* Spain
* Sweden
* Switzerland
* Ukraine
* United Kingdom
* Turks and Caicos Islands

Oceania|

* Australia
* New Zealand

Historical|

* Soviet Union
* Yugoslavia

Multilateral relations

| Regions|

* Africa
* Asia
* Caribbean
* Latin America
* Europe

|

Organizations|

* International organizations
* European Union
* NATO
* NORAD
* United Nations

Diplomacy and other topics

| History|

* History of Canadian foreign relations
* Cold War
* Vietnam War
* War in Afghanistan
* Iraq War

|

Trade|

* Mining in Latin America and the Caribbean
* United States

Diplomacy|

* Canadian diplomats
* Diplomatic missions of / in Canada
* Treaties
* Global Affairs Canada
* Peacekeeping
* Prime Ministerial overseas trips

* v
* t
* e

Foreign relations of the United States

Bilateral relations

| Africa|

| Central|

* Angola
* Cameroon
* Central African Republic
* Chad
* Democratic Republic of the Congo
* Republic of the Congo
* Equatorial Guinea
* Gabon
* São Tomé and Príncipe

|

East|

* Burundi
* Comoros
* Djibouti
* Eritrea
* Ethiopia
* Kenya
* Madagascar
* Malawi
* Mauritius
* Mozambique
* Rwanda
* Seychelles
* Somalia
* Somaliland
* South Sudan
* Tanzania
* Uganda
* Zambia
* Zimbabwe

North|

* Algeria
* Egypt
* Libya
* Morocco
* Sahrawi Arab Democratic Republic
* Sudan
* Tunisia

Southern|

* Botswana
* Eswatini
* Lesotho
* Namibia
* South Africa

West|

* Benin
* Burkina Faso
* Cape Verde
* Côte d'Ivoire
* The Gambia
* Ghana
* Guinea
* Guinea-Bissau
* Liberia
* Mali
* Mauritania
* Niger
* Nigeria
* Senegal
* Sierra Leone
* Togo

Americas|

| Caribbean|

* Antigua and Barbuda
* Bahamas
* Barbados
* Cuba
* Dominica
* Dominican Republic
* Grenada
* Haiti
* Jamaica
* St. Kitts and Nevis
* St. Lucia
* St. Vincent and the Grenadines
* Trinidad and Tobago

|

Central|

* Belize
* Costa Rica
* El Salvador
* Guatemala
* Honduras
* Mexico
* Nicaragua
* Panama

Northern|

* Canada
* trade

South|

* Argentina
* Bolivia
* Brazil
* Chile
* Colombia
* Ecuador
* Guyana
* Paraguay
* Peru
* Suriname
* Uruguay
* Venezuela

Asia|

| Central|

* Kazakhstan
* Kyrgyzstan
* Tajikistan
* Turkmenistan
* Uzbekistan

|

East|

* China
* Hong Kong
* Macau
* Japan
* Mongolia
* North Korea
* South Korea
* Taiwan

South|

* Afghanistan
* Bangladesh
* Bhutan
* India
* Maldives
* Nepal
* Pakistan
* military
* Sri Lanka

Southeast|

* Brunei
* Cambodia
* Indonesia
* Laos
* Malaysia
* Myanmar
* Philippines
* Singapore
* Thailand
* Timor-Leste
* Vietnam

Western|

* Armenia
* Azerbaijan
* Bahrain
* Georgia
* Iran
* Iraq
* Israel
* military
* Jordan
* Kuwait
* Lebanon
* Oman
* Palestine
* Qatar
* Saudi Arabia
* Syria
* United Arab Emirates
* Yemen

Europe|

| Eastern|

* Belarus
* Bulgaria
* Czech Republic
* Hungary
* Moldova
* Transnistria
* Poland
* Romania
* Russia
* Slovakia
* Ukraine

|

Northern|

* Denmark
* Estonia
* Finland
* Iceland
* Ireland
* Latvia
* Lithuania
* Norway
* Sweden
* United Kingdom
* Special Relationship
* Bermuda
* Cayman Islands

Southern|

* Albania
* Andorra
* Bosnia and Herzegovina
* Croatia
* Cyprus
* Northern Cyprus
* Greece
* Holy See
* Italy
* Kosovo
* Malta
* Montenegro
* North Macedonia
* Portugal
* San Marino
* Serbia
* Slovenia
* Spain
* Turkey

Western|

* Austria
* Belgium
* France
* Germany
* Liechtenstein
* Luxembourg
* Monaco
* Netherlands
* Switzerland

Oceania|

| Australasia|

* Australia
* New Zealand

|

Melanesia|

* Fiji
* Papua New Guinea
* Solomon Islands
* Vanuatu

Micronesia|

* Kiribati
* Marshall Islands
* Micronesia
* Nauru
* Palau

Polynesia|

* Cook Islands
* Samoa
* Tonga
* Tuvalu

Former states|

* Artsakh
* Grand Duchy of Baden
* Kingdom of Bavaria
* Duchy of Brunswick-Lüneburg
* Federal Republic of Central America
* Greater Republic of Central America
* Congo Free State
* Czechoslovakia
* East Germany
* Republic of Genoa
* German Empire
* Kingdom of Hanover
* Hanseatic Republics
* Hawaiian Kingdom
* Grand Duchy of Hesse
* Mecklenburg-Schwerin
* Mecklenburg-Strelitz
* Duchy of Nassau
* North German Confederation
* Grand Duchy of Oldenburg
* Orange Free State
* Ottoman Empire
* Papal States
* Duchy of Parma
* Prussia
* Russian Empire
* Ryukyu Kingdom
* Kingdom of Sardinia
* Principality of Schaumburg-Lippe
* Soviet Union
* Republic of Texas
* Grand Duchy of Tuscany
* Kingdom of the Two Sicilies
* United Arab Republic
* Kingdom of Württemberg
* Yugoslavia

Multilateral relations

* Africa
* Arab League
* Asia
* East Asia
* European Union
* Latin America
* Middle East
* United Nations
* C5+1
* Major non-NATO ally
* Third Border Initiative
* International organizations

Doctrines, policies, concepts

| Presidential
doctrines|

* Proclamation of Neutrality
* Monroe
* Roosevelt Corollary
* Good Neighbor policy
* Truman
* Eisenhower
* Kennedy
* Johnson
* Nixon
* Carter
* Reagan
* Clinton
* Bush
* Obama

|

Other doctrines|

* Lodge Corollary
* Stimson
* Kirkpatrick
* Weinberger
* Powell
* Rumsfeld
* Wolfowitz

Policies and
concepts|

* Blowback
* China policy
* Containment
* Domino theory
* Foreign aid
* Middle East policy
* Non-interventionism
* Progressive realism
* Rollback
* Special Relationship

*[v]: View this template
*[t]: Discuss this template
*[e]: Edit this template