There is a misconception that Canada has been pillaging the US in trade. But the numbers do not lie and the truth belies the claims that the Trump administration has put forward. Let’s consider the facts.
In 2024, the value of Goods and Services that Canada export to the US showed a favourable value for Canada of $35.7 billion USD. But it is important to understand the specifics.
The US imports about $130 billion USD of Canadian crude oil. For many years the US was energy dependent and chose to move that dependency towards Canada as a safe and reliable partner. Almost 20% of US refineries are designed to only process the heavier Canadian crude. They purchase this at very favourable rates which are below the world market for oil. As the US has become less oil dependent because of fracking, US imports from other countries apart from Canada has fallen dramatically, allowing the US to become a net exporter; they now export almost as much oil as they import from Canada. However, the value of US crude exports is significantly higher because it demands a higher price on world markets.
So, the US has a consistent, reliable and safe partnership with Canadian producers that keep 20% of the US refineries operating, and they can export over 4 million barrels a day at higher prices. I can see why that is such a threat...
Let’s talk aluminum. Aluminum is an important product for US safety and security given its myriad uses. From aircraft to cars, cans to foil, furniture to siding, aluminum is used across society. The US has only 4 aluminum smelters and relies on imports to fill domestic needs. Here stands Canada to fulfill over 60% of that capacity...damn that safe and reliable partner, eh? Aluminum manufacturing is an energy hog. One large plant consumes as much energy as the city of Cleveland. To produce the energy the US would need to fill its own requirements would necessitate more manufacturing plants and the equivalent of 4 more Hoover dams. An added bonus, about half of the downstream products produced from this Canadian aluminum in the US is ultimately exported back to Canada as finished goods. I can see why our partnership is so concerning.
In 1992, the USA, Canada and Mexico negotiated NAFTA, creating the world’s largest free trade agreement. It was signed by President Bush. In October 2018, that agreement was updated, signed on behalf of the US by President Trump. He called it ‘...the most modern, up-to-date, and balanced trade agreement in the history of our country, with the most advanced protections for workers ever developed.”
If there is a problem, let’s talk about it. It has worked for over 30 years to the benefit of all three countries. It has been perfectly imperfect. So, let’s drop all this talk about tariffs and get back to the business of business. It is a lot more fun and a lot more productive.