Some Canadian products could face huge tariffs on the first day of Donald Trump’s administration in January, potentially hurting companies, workers and consumers on both sides of the border if the U.S. president-elect is able to implement them.
Trump pledged Monday to impose a 25 per cent tariff on all imports from Canada and Mexico. Trump said the measure is meant as retaliation for illegal immigration and “crime and drugs” crossing the border.
He also said China will face tariff hikes of 10 per cent above any existing tariffs until it stops the flow of illegal drugs.
What does Canada export to the U.S.?
The United States was Canada’s biggest trading partner in 2022, with more than $960.9 billion in total trade, according to Statistics Canada.
The U.S. Census Bureau estimates that in the first three quarters of the year, the U.S. exported US$263.5 billion worth of goods to Canada, and imported $309.3 billion.
The following are Canada’s greatest exports to the U.S. in descending order in 2023:
- energy products, motor vehicles and parts
- consumer goods
- forestry products and building and packaging materials
- basic and industrial chemical, plastic and rubber products
- metal and non-metallic mineral products
- industrial machinery, equipment and parts
- special transactions trade
- electronic and electrical equipment and parts
- aircraft and other transportation equipment and parts
- metal ores and non-metallic minerals
StatCan displayed the data in a chart on its website.
Both countries rely on each other as a main source of imported energy, including oil, natural gas, clean electricity, uranium, with energy trade hitting C$198.2 billion in 2023, according to the Canadian government. Along with exporting crude oil, Canada also sends clean electricity south of the border.
Oil is the top U.S. import from Canada, with a record 4.3 million barrels per day in July, according to the U.S. Energy Information Administration. Energy products overall made up a third of Canada’s $598 billion worth of exports to the south in 2022, according to StatCan.
Canada exported US$438 billion to United States in 2022, mainly crude petroleum (US$117 billion), cars (US$27 billion) and petroleum gas (US$22.4 billion). Canada also exported services south of the border in 2020 worth US$25.5 billion, namely computer and information services (US$7.68 billion), transportation (US$5.45 billion) and financial services (US$5.08 billion). The data came from Observatory of Economic Complexity, an online data visualization and distribution platform.
Motor vehicles and parts from Canada are another major import, making up almost a fifth of the $362.9 billion in imports from the U.S.
Higher exports of aircraft and unwrought gold helped boost Canada’s exports to the U.S. by 1.6 per cent in September, according to StatCan. Canada’s merchandise trade surplus with the U.S. rose slightly from $7.8 billion in August to $8.3 billion in September, meaning the value of its exports exceeded the value of its imports.
Other products the U.S. imports from the country include wood and other commodities, CNN reported, citing the United Nations’ Comtrade.
Manufacturers fear ‘devastating impact’
The Canadian Manufacturers and Exporters says it fears the tariffs would have a “devastating impact” on manufacturers, workers and consumers in both Canada and the U.S., and it’s working with officials to stress the consequences of the proposals.
Last year, $2.5 billion in products crossed the border daily in 2023, with 75 per cent of them manufactured goods. The trade and industry group says Canada’s exports to the U.S. are mainly materials and inputs used by American companies to manufacture other products.
“Imposing tariffs wouldn’t just harm Canada’s economy — it would also hurt U.S. manufacturers by increasing their costs and disrupting the deeply integrated supply chains that make North American manufacturing globally competitive,” Dennis Darby, president and CEO of the Canadian Manufacturers and Exporters, said in a statement shared with CTV News on Tuesday.
Mexico was the top exporter of cars and car parts to the U.S. in 2023, overtaking China, according to trade data released by the Commerce Department earlier this year. As well, Mexico is a big supplier of electronics, machinery, oil and optical apparatus, furniture and alcohol.
China is a big exporter to the U.S. of electronics, machinery, toys, games, sports gear, furniture and plastics.
Despite his pledges, it’s unclear how Trump will implement the tariffs without violating the United States-Mexico-Canada Agreement (USMCA), which replaced NAFTA during his first administration. Many U.S. imports from Canada and Mexico are exempted from tariffs because of the USMCA trade agreement between the three countries.
With files from CNN
Correction
This article has been updated to correct the dollar value of imports and exports so far this year.