What is Canada's largest trading partner?

The United States is Canada's largest trading partner by a wide margin. About 75 per cent of Canadian merchandise exports go to the United States, and about 50 per cent of Canadian imports come from the United States, making the Canada-United States economic relationship the largest bilateral trade relationship in the world by some measures. Two-way trade in goods and services exceeded US$960 billion in 2023.

The relationship is governed by the Canada-United States-Mexico Agreement (CUSMA, USMCA in the United States), which entered into force on July 1, 2020 replacing the North American Free Trade Agreement that had been in effect since January 1, 1994. CUSMA preserves duty-free access for most goods, updates rules on digital trade and intellectual property, tightens automotive content rules, and includes a sunset clause requiring renewal every six years.

Cross-border infrastructure carries the trade. The Ambassador Bridge between Detroit and Windsor handles about 25 per cent of Canada-United States trade by value, supplemented by the Detroit-Windsor Tunnel, the Blue Water Bridge between Sarnia and Port Huron, and the Peace Bridge between Fort Erie and Buffalo. The Canadian National Railway and Canadian Pacific Kansas City rail networks connect Canadian production with markets across North America. The Gordie Howe International Bridge under construction at Windsor will be the longest cable-stayed bridge in North America when it opens in 2025.

The relationship faces periodic friction. Softwood lumber disputes have recurred since 1982. Steel and aluminum tariffs imposed under section 232 of the U.S. Trade Expansion Act in 2018 sparked Canadian retaliatory tariffs before being lifted in 2019. Buy America provisions in U.S. infrastructure spending, the cancellation of the Keystone XL pipeline in 2021, and CUSMA dairy access disputes have all required active diplomatic management.