Special Report: The Importance of Canadian Trade
- Keywords:
- usmca
- canadian trade
America is running a record $900 billion deficit in goods trade. China accounts for the largest share of the shortfall at 44.6%, followed by Mexico’s 10.8%, Japan’s 7.9% and Germany’s 7.6%. Canada weighs in at 2.5% (10th), lifting the NAFTA share to 13.3%, which still falls under the total EU (20.0%). Indeed, China and the EU have accounted for the vast majority of the deterioration in the goods trade deficit since the shortfall hit its post-recession low in early 2010.
Bilateral trade balances by themselves say little about the importance of trade for the U.S. economy—it’s the underlying trade flows that matter. For example, you can have two similar-sized deficits but one shortfall reflects lots of exports and imports (the latter obviously being larger) and the other reflects a lopsided situation of mostly imports with few exports. The former trade pattern would be more beneficial than the latter in terms of production and jobs tied to exports.
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Michael Gregory
Deputy Chief Economist & Managing Director
Michael is part of the team responsible for forecasting and analyzing the North American economy and financial markets. He has spent his career working in either ec…(..)
View Full Profile >America is running a record $900 billion deficit in goods trade. China accounts for the largest share of the shortfall at 44.6%, followed by Mexico’s 10.8%, Japan’s 7.9% and Germany’s 7.6%. Canada weighs in at 2.5% (10th), lifting the NAFTA share to 13.3%, which still falls under the total EU (20.0%). Indeed, China and the EU have accounted for the vast majority of the deterioration in the goods trade deficit since the shortfall hit its post-recession low in early 2010.
Bilateral trade balances by themselves say little about the importance of trade for the U.S. economy—it’s the underlying trade flows that matter. For example, you can have two similar-sized deficits but one shortfall reflects lots of exports and imports (the latter obviously being larger) and the other reflects a lopsided situation of mostly imports with few exports. The former trade pattern would be more beneficial than the latter in terms of production and jobs tied to exports.
View important Disclosure Statements at economics.bmo.com/en/disclosure.
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