Trade & Investment
Canada is critical to U.S. economic prosperity and security. As the United States’ closest ally and most reliable trading partner, Canada strengthens U.S. competitiveness against countries that pursue unfair trade practices. With nearly $1 trillion in bilateral trade each year, or $2.5 billion in goods and services every day, our economic partnership is vital to U.S. economic security and supports millions of American jobs. In fact, the United States sells more goods to Canada than to any other country, making Canada the top customer for 32 U.S. states, and a top three customer for 45 U.S. states. Find out about Canada’s relationship and importance to your state, district, and county by checking out the State Trade Fact Sheets.
Canada support U.S. manufacturing, with approximately 70% of Canadian goods exported to the United States used in the production of other goods, incorporated into U.S. supply chains and supporting millions of American jobs. The U.S.-Canada auto industry is one of the most integrated in the world, where some automotive materials and components have crossed the Canada-U.S. border as many as eight times before a car rolls off an assembly line. Canada and the United States don’t just trade with each other, our partnership ensures that we build great things and drive technological advancements together.
In agriculture too, Canada-U.S. agriculture and agri-food trade is massive, with bilateral trade reaching an impressive $72.5 billion in 2023, helping U.S. supply chains operate more efficiently and supporting millions of jobs. Canada stands as the top agricultural export market for 26 U.S. states and is the largest producer and supplier of potash to the U.S., ensuring American farmers have the necessary fertilizer for their crops. By strengthening these integrated supply chains and working closely together, our countries can make food more affordable, support sustainable farming, and ensure the highest food safety and quality for Canadian and American families.
United States-Mexico-Canada Agreement (USMCA)
The USMCA is a bipartisan trade deal that serves as the cornerstone of our economic partnership. It provides a stable, predictable, and transparent environment for U.S. businesses, allowing them to prosper, innovate, and grow. Since the USMCA came into effect in 2020, U.S.–Canada trade has surged by more than 27% — or $196 billion — driving economic growth and prosperity on both sides of the border. This agreement not only strengthens our economic ties but also ensures that American businesses and workers benefit from a robust and reliable trading relationship with Canada. By reducing trade barriers and tariffs, the USMCA helps lower the cost of goods, making everyday products more affordable for American families and U.S. manufacturing supply chains.
Buy America
Domestic content requirements, like Buy America, jeopardize our economic partnership. Because U.S. manufacturing relies heavily on raw materials and other products from Canada, many companies consider these “domestic.” In the steel industry for example, many workers on both sides of the border even share the same union. However, Buy America provisions deter job growth and investment; stifle innovation; and create red tape for contracting authorities. Our relationship works best when our markets are free and fair.
In addition to trade in goods, Canada and the U.S. have a significant investment relationship. In 2023, U.S. foreign direct investment in Canada stood at $452 billion, while Canadian foreign direct investment in the U.S. stood at $672 billion. Nearly half of Canada’s direct investment abroad goes to the United States, supporting job creation and economic growth in communities both small and large. Canadian-owned businesses in the U.S. support nearly 900,000 U.S. workers.
The Canadian market is ideal for U.S. companies looking to grow their business. According to the World Bank, Canada is the easiest place in the G7 and OECD to start a business. Canada has a stable business climate, low taxes and business costs, highly educated and skilled workforce, generous research and development incentives, and preferential access to global markets. In fact, Canada is a global leader in many of these areas.