Canada - Country Commercial Guide
Market Overview

Discusses key economic indicators and trade statistics, countries dominant in the market, and other issues affecting trade. Also visit trade.gov/usmca.

Last published date: 2022-08-03

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$1.7 trillion bilateral trade and investment relationship. Canada is traditionally the top U.S. export market, accounting for 17.5% of all U.S. goods exports in 2021. In 2021, Canada became the top trading partner of the United States.  Canada and the United States trade over US$2 billion in goods and services daily. Two-way trade in goods and services totaled US$762.8 billion in 2021, and 2021 bilateral investment stock totaled US$934.3 billion.

U.S. exports to Canada were nearly US$365 billion in 2021. 31 U.S. states rank Canada as their number one export market. In 2021, U.S. exports to Canada exceeded total U.S. exports to China, Japan, and India 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 2021, U.S. exports of goods to Canada totaled US$308.4 billion. The top export categories (2-digit HS) in 2021 to Canada were: machinery (US$44 billion), vehicles (US$44 billion), electrical machinery (US$24 billion), mineral fuels (US$23 billion), and plastics (US$16 billion).

U.S. exports of services to Canada were valued at US$56.1 billion in 2021. Leading services exports from the U.S. to Canada were in the professional and management services and intellectual property sectors.

In 2021, Canada remained a top export market for U.S. agricultural exports, totaling US$25 billion. Leading domestic export 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, with Canadians spending more than 60% of their disposable income on U.S. goods and services. The nations share a similar lifestyle, engendering a certain level of cultural familiarity. Canada’s two official languages are English and French.

Investment also plays a significant role in the bilateral relationship. Canadian foreign direct investment (FDI) in the United States was US$607.3 billion in 2021, making Canada the United States’ third-largest source of FDI. The United States is Canada’s top source of FDI, with investment stock from the United States totaling US$406.4 billion in 2021. As of 2019, U.S. affiliates of Canadian-owned firms employed 871,300 Americans, invested $1.1 billion to innovative research and development, and contributed US$16 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.