CANADA
Source: MNI - Market News/Refinitiv
- The US bilateral deficit with Canada has widened close to $45bn since 2020 but that deterioration was in 2021-2022 with the deficit narrowing over 2023-2024. The deficit with Mexico is almost three times larger than with Canada though and it has deteriorated over the last three years. Europe is also likely to stay in focus with the deficit widening around $25bn last year.
US merchandise trade deficit US$bn 12mth sum
Source: MNI - Market News/Refinitiv
- The US is by far Canada’s largest trading partner with their supply chains significantly intertwined. In November, 75.6% of Canadian exports went to the US while in second place was the UK at 4.4% and China 4.2%. While this is just a monthly snapshot, it shows Canada’s vulnerability to the US. In 2023, merchandise exports to the US accounted for over 20% of Canadian GDP.
- Motor vehicles for persons were Canada’s fourth largest export in November with parts another important export. The US was by far the largest destination with Mexico a distant second. If the US targeted this sector, then it would be significantly impacted.
- The key motor vehicle sectors accounted for around 8.5% of Canada’s November exports to the US. However, commodities are significantly more important, especially oil, accounting for around 30% of shipments.
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