Discusses key economic indicators and trade statistics, which countries are dominant in the market, the U.S. market share, the political situation if relevant, the top reasons why U.S. companies should consider exporting to this country, and other issues that affect trade, e.g., terrorism, currency devaluations, trade agreements. In addition, visit our United States-Mexico-Canada Agreement (USMCA) website at 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. exports in 2019. Canada and the United States trade $1.9 billion in goods and services daily. Two-way trade in goods and services totaled more than $703.8 billion in 2019, and as of 2019 bilateral investment stock totaled more than $982.8 billion.
U.S. exports to Canada were nearly $357.1 billion in 2019. Over 30 U.S. states rank Canada as their number one export market. In 2018, U.S. exports to Canada exceeded total U.S. exports to China, Japan, South Korea, and Singapore 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 2019, U.S. exports of goods to Canada totaled $292.4 billion. The top export categories (2-digit HS) in 2018 to Canada were: vehicles ($52 billion); machinery ($45 billion), mineral fuels ($27 billion), electrical machinery ($26 billion), and plastics ($14 billion).
U.S. exports of services to Canada were valued at $64.7 billion in 2019. Leading services exports from the U.S. to Canada were in the travel, professional and management services, and intellectual property (computer software, audio visual) sectors. For travel across the border, approximately 380,000 people cross every day by all modes of transport. American travelers made 14 million trips to Canada in 2018, spending nearly $10 billion, and Canadian travelers made 21 million trips to the United States, spending nearly $22 billion. In fact, the United States is the top international tourism destination for Canadian travelers. In addition to travel and tourism, education remains a top service export sector in the bilateral trade relationship: Canada is the 5th largest source of international students to the United States, and 26,122 Canadian students attended U.S. schools in the 2018-19 academic year.
U.S. total exports of agricultural products to Canada totaled $24 billion in 2018, our largest agricultural export market. Leading domestic export categories include prepared food ($1.9 billion), fresh vegetables ($1.9 billion), fresh fruit ($1.5 billion), other snack foods ($1.4 billion), and non-alcoholic beverages (ex. juices) ($1.1 billion).
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 $580.8 Billion in 2019, 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 $402 Billion in 2019. In 2017, U.S. affiliates of Canadian-owned firms employed 726,900 Americans, contributed over $1 billion innovative research and development, and expanded U.S. exports by more than $15 billion.
The United States, Mexico, and Canada are parties to the United States–Mexico–Canada Agreement (USMCA), which entered in to 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.