Trading Places

Good Business. Great Friends. Free Trade.

Canada and the United States of America. We have been good friends doing good business for centuries.

The North American market depends on trade, and within our continent, the province of Saskatchewan, Canada is one of the most trade dependent regions in the world. The United States of America is our biggest customer – by far.

Through the original NAFTA agreement, Canada and the United States forged one the most successful economic partnerships the world has ever seen. In September 2018, the United States, Mexico, and Canada reached an agreement to replace NAFTA with a revised USMCA agreement which included a mandatory review to take place in 2026. And now, following his election, Donald Trump is implementing 10% tariffs on steel and aluminum products from Canada, casting uncertainty and threatening further measures.

With tariffs that disregard the USMCA agreement, U.S. industries face the daunting challenge of either paying more to secure vital supply chains or scrambling to find alternative suppliers. Without Saskatchewan goods, these once-safe supply chains will become precarious, risking significant breakdowns. Businesses will encounter soaring costs, which ultimately means consumers will bear the burden to keep their operations afloat.

Now, more than ever, the advantages of free trade are far greater than the advantages of protectionism.

This web-based program, “Trading Places”, serves as your vital resource for tools and knowledge to advocate for USMCA or pursue a new free trade agreement.

Check back often for updates and new material.

Importance of Free Trade & USMCA

Does the U.S. have a $200B trade deficit with Canada?

No. Applying US Census Bureau figures, the US is on track to record a trade deficit with Canada of roughly $45 billion in 2024. That amounts to a mere 4% of the overall US trade deficit. This shortfall with Canada is second smallest, behind only France. The US trade deficit with Canada is 1/8 the size of China’s and 1/5 that of Mexico.

What is a trade deficity, is it a "subsidy"?

A trade deficit is not a subsidy. A trade deficit simply means one partner buys more products than it sells to the other. Americans are receiving value for the dollars spent in the form of goods and services from Canada. The trade deficit the US runs with Canada reflects their economic outperformance and above-average spending of Americans that’s driving a hunger for energy products.

What is making the trade deficit?

Cheap oil. Canadian heavy crude is a key supplier to US refining, predominantly in the mid-West, with a steadily growing share in the Gulf coast. These refineries process this oil and then use it domestically or sell it to markets around the world. In simplest terms, the US buys Canadian oil at a discount and exports at full price, which currently yields a US$19 billion annual windfall. Remove Canadian energy exports from the equation and the trade story flips. Ex-energy, the US enjoys a trade surplus with Canada of around $45 billion.

What country buys the most US products?

Canada is the single largest US market by a large margin with nearly US$350 billion goods and services crossing Canada’s border over the first three quarters of 2024. Some 34 US states sell more goods to Canada than any other foreign economy.

Who pays for tariffs?

Americans. A tariff is a tax levied on imports from foreign markets that is paid by US importers and typically passed on to consumers. Independent agencies on both sides of the border note that tariffs will undoubtedly raise the cost of living in the United States. Any US business or consumer who buys a product made in Canada, or that has inputs from Canada, would face higher prices. This would be true for everything from houses to cars, to groceries, to gasoline.

As for taxes, the Washington-based Tax Foundation estimates that the tariffs on Mexico, Canada, and China would shrink economic output by 0.4 percent and increase taxes by $1.1 trillion between 2025 and 2034 amounting to an average tax increase of more than $800 per US household in 2025.

What about fentanyl and illegal immigrants?

Canada is doing what President Trump has asked. To be sure, less than 1% of fentanyl and less than 1% of illegal crossings into the United States come from Canada. But together we can do better:

Canada is advancing a $1.3 billion border plan, deploying new helicopters, technology, personnel, and enhancing coordination with US officials.
Canada has pledged 10,000 frontline personnel, the appointment of a Fentanyl Czar, and the listing of organized crime groups having an impact in Canada as terrorist entities under the Criminal Code.
Canada, in collaboration with the US, is establishing a Joint Strike Force to combat organized crime and money laundering, with $200 million in funding.
Canada’s law enforcement agencies will continue to work side by side with US partners to protect the integrity of our shared border. With these new resources we can do more to address shared issues at the border.