TRUMP & TARIFFS: U.S.& CANADA TRADE


Mar. 4, 2025

 Trade relationships are rooted in strong economic collaboration and understanding, such as the connection between the USA and Canada. This robust commercial alliance is built on a foundation of shared values, geographic proximity, and complementary economic strengths, facilitating a seamless flow of goods, services, and investments across the world's longest international border.

The enormity of bilateral trade is highlighted by the fact that over $2 billion worth of goods and services are traded between the two nations daily. The total estimation of this two-way trade between Canada and the United States reached $918.3 billion in 2023.

In 2024, the United States bought approximately $439.8 billion worth of goods and services from Canada.

Major categories included:

 -Mineral fuels, oils, and distillation products: $135.2 billion

-Vehicles (other than railway or tramway): $ $59.8 billion

-Machinery, nuclear reactors, and boilers: $33.1 billion

-Commodities not particularized according to kind: $20.5 billion

-Plastics: approximately $ $14.2 billion

-Remaining imports (e.g., metals, wood, agricultural products) account for the balance, totaling approximately $176.0 billion in 2024

 In 2024 Canada purchased $ $448.8 billion worth of goods from the United States. Key commodities include:

 -Vehicles: $ $60.3 billion

-Machinery, boiler etc. -$ $54.8 billion

-Mineral fuels, oils: $$29.9 billion

-Electric machinery: $$30.6 billion

-Plastics & plastic articles: $$16.0 billion

-Florida oranges and orange juice & other food products: $$230 million.

(This figure includes a variety of citrus products, with Florida being a significant supplier to the Canadian market.)

 Michigan emerges as the front-runner with sales to Canada worth $24.9 billion

followed by Texas $21.3 billion,

Ohio $20.1 billion,

California $17.0 billion and

Illinois $16.5 billion.

-Other States make up the difference.

North Dakota, Maine, and Montana show particular dependencies on exports to Canada, with 81.8%, 48.2%, and 47.3%, respectively of their total exports purchased by Canada.

 -"Canada is the number 1 customer for as many as 36 U.S. states."

 If a 25% tariff were imposed on Canadian goods and Canada retaliated with similar measures, the impact on American states and citizens would be significant. It is estimated that:

- Canada's GDP could shrink significantly, potentially leading to a recession

-U.S. GDP could shrink by 1.6% (approximately USD 467 billion) and could also face a recession..

-The cost to the average American might be about $1,300++ per person annually.

-Significant layoffs could occur, particularly in energy, auto, and heavy manufacturing sectors.

- Layoffs: Significant layoffs in energy (e.g., oil refining), auto manufacturing (e.g., Michigan’s car plants), and heavy machinery (e.g., Ohio, Illinois) are plausible. Canada supplies 60% of U.S. crude oil imports; a tariff could spike energy costs, while auto sector integration (25% of U.S.-Canada trade) could see 50,000-100,000 job losses across border states, per industry estimates like those from the Motor & Equipment Manufacturers Association.

Tuesday, March 4, 2025- Tariffs are confirmed and in effect as of March 4, 2025, possibly raising fuel prices in the USA to $3.45-$3.55/gal. or 9 to13% higher than current prices, and new car prices to $52,500-$55,000, or 9.4% to 15.8% with higher-end impacts possible.

 It seems clear that tariffs would not be beneficial for either country.

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