Discusses key economic indicators and trade statistics, countries dominant in the market, and other issues affecting trade. Also visit trade.gov/usmca.
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 $1.6 trillion bilateral trade and investment relationship. Canada ranks as the top U.S. export market, accounting for 17.9% of all U.S. goods exports in 2020. Canada and the United States trade $1.7 billion in goods and services daily. Two-way trade in goods and services totaled more than $614.9 billion in 2020, and 2020 bilateral investment stock totaled $991.9 billion.
U.S. exports to Canada were nearly $310 billion in 2020. 32 U.S. states rank Canada as their number one export market. In 2020, U.S. exports to Canada exceeded total U.S. exports to China, Japan, and Taiwan 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 2020, U.S. exports of goods to Canada totaled $256.1 billion. The top export categories (2-digit HS) in 2020 to Canada were: machinery ($39billion), vehicles ($38 billion), electrical machinery ($22 billion), mineral fuels ($16 billion), and plastics ($13 billion).
U.S. exports of services to Canada were valued at $53.6 billion in 2020. Leading services exports from the U.S. to Canada were in the professional and management services and intellectual property sectors.
U.S. total exports of agricultural products to Canada totaled $22 billion in 2020, our second largest agricultural export market. 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; Americans and Canadians “speak” the same language, literally and figuratively. Canada’s two official languages are English and French; however, English is almost universally spoken.
Investment also plays a significant role in the bilateral relationship. Canadian FDI in the United States was nearly $570 billion in 2020, making Canada the United States’ second-largest source of FDI. The United States is a leading source of Canada’s foreign direct investment (FDI), with investment stock from the United States totaling $422 billion in 2020. In 2019, U.S. affiliates of Canadian-owned firms employed 836,000 Americans, invested over $1 billion to innovative research and development, and contributed to more than $15 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). 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. The Agreement modernizes and rebalances U.S. trade relations with Mexico and Canada, and it reduces incentives to outsource by providing strong labor and environmental protections, innovative rules of origin, and revised investment provisions. The Agreement also brings labor and environment obligations into the core text of the agreement and makes them fully enforceable.