Canada's Largest Trading Partner — the United States

# Canada's Largest Trading Partner — the United States

The United States is Canada's largest trading partner by a huge margin — and the relationship is one of the most important in Canadian life, economy, and politics. Here is the basic information you need for the citizenship test.

• About 75% of Canadian exports go to the United States
• About 50% of Canadian imports come from the United States
• Total two-way trade: approximately $1 trillion CAD annually in goods and services
• About 9 million American jobs depend on trade with Canada
• About 2 million Canadian jobs depend on trade with the US

This is the largest two-way trading relationship in the world.

Canada exports to the US:

• Energy — oil, natural gas, electricity (Canada is the largest source of US oil imports)
• Vehicles and auto parts — the auto industry is fully integrated across the border
• Forest products — softwood lumber, pulp, paper
• Agricultural products — beef, pork, wheat, canola, dairy
• Aerospace products
• Aluminum, steel, minerals

Canada imports from the US:

• Vehicles and auto parts
• Machinery and equipment
• Computers and electronics
• Chemicals and pharmaceuticals
• Food products

The relationship is governed by the Canada–United States–Mexico Agreement (CUSMA), which:

• Replaced the North American Free Trade Agreement (NAFTA) on July 1, 2020
• Eliminates most tariffs between the three countries
• Sets rules for labour, environment, intellectual property, and dispute resolution
• Covers about $1.6 trillion in annual trade among the three countries
• Includes special provisions for the auto industry (parts must have higher North American content)

Other names for the same agreement:

• USA: USMCA (United States–Mexico–Canada Agreement)
• Canada: CUSMA (Canada–United States–Mexico Agreement)
• Mexico: T-MEC (Tratado entre México, Estados Unidos y Canadá)

The Canada–United States border is approximately 8,891 km (5,525 miles) long. It is:

• The longest international border in the world
• The longest undefended border — no military fortifications on either side
• Crossed by 400,000 people daily in peacetime (pre-COVID)

The border has been demilitarised since the Rush–Bagot Agreement of 1817 — one of the longest peaceful international relationships in history.

While the US dominates, Canada also trades significantly with:

Canada has trade agreements with the EU (CETA), 11 Pacific countries (CPTPP), South Korea, Israel, and many others.

Common citizenship-test questions:

• Who is Canada's largest trading partner? *(The United States)*
• What is the longest undefended border in the world? *(The Canada–US border)*
• What is Canada's main trade agreement with the US and Mexico? *(CUSMA, formerly NAFTA)*

For more, see [The Three Sectors of Canada's Economy](/blog/canadian-economy-three-sectors).

Try our [free practice test](/practice-test) — it covers trade questions in the same format you will see on test day.