The United States and Canada enjoy the world’s largest and most comprehensive trading relationship that supports millions of jobs in each country and constitutes a US$1.95 trillion bilateral trade and investment relationship. Canada is traditionally the top U.S. export market, accounting for 14.2% of all U.S. goods exports in 2022. In 2022, Canada maintained its position as the United States’ top trading partner. Canada and the United States trade over US$2.5 billion in goods and services daily. Two-way trade in goods and services totaled US$919.2 billion in 2022, and 2022 bilateral investment stock totaled US$1.027 trillion, exceeding the trillion-dollar mark for the first time according to the Department of Commerce’s Bureau of Economic Analysis (BEA).
U.S. exports of goods and services to Canada were nearly US$429 billion in 2022, an increase of 16.7% from 2021. Thirty-four U.S. states rank Canada as their number one export market, and Canada serves as either the first or second export market for 45 U.S. states. In 2022, U.S. exports to Canada exceeded total U.S. exports to Denmark, France, Germany, Italy, Spain, and the United Kingdom combined. Whether your company is a first-time or seasoned exporter, Canada should be a key component of your company’s export growth strategy.
In 2022, U.S. exports of goods to Canada totaled US$357.3 billion. The top export categories (2-digit HS) in 2022 to Canada were: vehicles (US$53.8 billion); nuclear reactors, boilers, machinery (US$49.7 billion); mineral fuel, oil (US$35.3 billion); electric machinery (US$28.3 billion); and plastics & plastic articles (US$17.7 billion).
U.S. exports of services to Canada were valued at US$71.3 billion in 2022. Leading services exports from the United States to Canada were in the business services, professional and management consulting services, and travel sectors.
In 2022, Canada remained a top export market for U.S. agricultural exports, totaling US$28.3 billion. Leading categories include prepared foods; baked goods; cereals and pasta; fresh and processed vegetables; fresh and processed fruit; meat and meat products; snack foods; non-alcoholic beverages; chocolate and cocoa products; condiments and sauces; coffee; wine; beer; and pet food.
In most industry sectors, Canada is a highly receptive, open, and transparent market for U.S. products and services. The nations share a similar lifestyle and close geographic proximity, engendering a certain level of cultural familiarity. Canada has two official languages: English is spoken predominantly (75% nationwide) with a significant French-speaking minority (23% nationwide). Most French speakers are concentrated in Québec (85% of the province) and New Brunswick (32% of the province).
Investment also plays a significant role in the bilateral relationship. Canadian foreign direct investment (FDI) in the United States was US$683.80 billion in 2022, making Canada the United States’ second-largest source of FDI (by country of ultimate beneficial owner). The United States is Canada’s top source of FDI, with investment stock from the United States totaling US$438.76 billion in 2022. As of 2020, U.S. affiliates of Canadian-owned firms employed 844,600 Americans, invested $1.5 billion in innovative research and development, and contributed US$13.4 billion in U.S. exports.
The United States, Mexico, and Canada are parties to the United States–Mexico–Canada Agreement (USMCA), which entered into force on July 1, 2020, replacing the North American Free Trade Agreement (NAFTA). The USMCA is a 21st century, high-standard trade agreement, supporting mutually beneficial trade resulting in freer markets, fairer trade, and robust economic growth in North America.
Political & Economic Environment: See the U.S. State Department’s website for background on thecountry’s political environment.
