America's 2008 Trade Deficit with Canada

Oil & Automotive Products Among Top Canadian Exports to US

© Daniel Workman

Mar 6, 2009

America’s overall trade deficit with Canada increased by 9.5% to US$74.6 billion last year, up from $68.2 billion in 2007.

The total value of American exported goods shipped to its northern neighbor in 2008 was US$260.9 billion, up 4.8% from the prior year and up 37.4% since 2004.

Canadian exports to the U.S. increased by 5.8% from last year to $335.6 billion, up 30.9% from the comparable statistic in 2004.

Top Imports from America to Canada

Below are the top 10 goods imported from the USA into Canada for 2008. These categories represent 33.7% of total U.S. exports delivered to Canada.

1. Vehicle parts and accessories … US$20.2 billion, down 17.1% from 2007 (7.7% of goods from America)
2. New & used passenger cars … $14.6 billion, down 3.3% (5.6%)
3. Trucks, buses and special purpose vehicles … $10.6 billion, down 15.4% (4.1%)
4. Other industrial machines … $7.7 billion, up 3.7% (2.9%)
5. Electric apparatus … $6.2 billion, down 1.1% (2.4%)
6. Engines & engine parts … $6 billion, down 10.9% (2.3%)
7. Plastic materials … $5.8 billion, up 2.7% (2.2%)
8. Other petroleum products … $5.76 billion, up 50% (2.2%)
9. Iron & steel mill products … $5.6 billion, up 14.1% (2.1%)
10. Other industrial supplies … $5.3 billion, up 3.2% (2%).

A new category introduced in 2008 was ‘Undocumented exports to Canada’ which shows 4 billion worth of goods. This represents 1.5% of overall US shipments to the Great White North.

Fastest-Growing Canadian Imports from America

The following are 10 of the fastest-growing U.S. shipments into Canada last year.

1. Soybeans … US$171.1 million, up 152.3% from 2007
2. Natural gas liquids … $2.1 billion, up 118.4%
3. Fuel oil … $2.1 billion, up 91%
4. Wheat … $89.4 million, up 76.6%
5. Other commercial vessels … $32.4 million, up 67.5%
6. Steelmaking materials … $2.1 billion, up 63.1%
7. Drilling & oilfield equipment … $1.1 billion, up 62.4%
8. Non-monetary gold … $2.4 billion, up 55.4%
9. Other petroleum products … $5.8 billion, up 50%
10. Other precious metals … $1.3 billion, up 47.1%.

Canada’s Leading Exports to America

Canada’s top 10 exports account for 52.3% of total Canadian exports to USA in 2008.

1. Crude oil … US$62.7 billion, up 64.9% from 2007 (18.7% of Canadian exports to USA)
2. New & used passenger cars … $31.4 billion, down 14.5% (9.3%)
3. Natural gas … $26.7 billion, up 1.6% (8%)
4. Vehicle parts & accessories … $12.1 billion, down 20.5% (3.6%)
5. Other petroleum products … $8.7 billion, up 17.3% (2.6%)
6. Bauxite & aluminum … $7.6 billion, up 1% (2.3%)
7. Fuel oil … $6.7 billion, up 20.6% (2%)
8. Plastic materials … $5.8 billion, up 2.2% (1.7%)
9. Complete & assembled other vehicles … $5.7 billion, down 47.8% (1.7%)
10. Abrasives, belting, boxes & glass … $5.6 billion, down 1.5% (1.7%).

Honorable mention goes to fertilizers, pesticides and insecticides, which as a group generated exports valued at $5.2 billion or 1.6% of total exports to the U.S. in 2008.

Fastest-Growing Canadian Exports to America

Coins valued more for their artistic and collector’s value than precious metal content made substantial gains in 2008. Raw and intermediate materials were among the top increasing Canadian products shipped to the U.S. in 2008.

1. Numismatic coins … US$664.5 million, up 384.9% from 2007
2. Sulfur & non-metallic minerals … $534.6 million, up 220.6%
3. Food oils & oilseeds … $1.7 billion, up 90.4%
4. Fertilizers, pesticides & insecticides … $5.2 billion, up 74.4%
5. Crude oil … $62.7 billion, up 64.9%
6. Feedstuff & foodgrains … $2.9 billion, up 64.8%
7. Laboratory testing & control instruments … $397.4 million, up 60.4%
8. Non-food oils, tobacco & waxes … $895.2 million, up 53.7%
9. Unmanufactured steelmaking & ferroalloying materials … $2.2 billion, up 52.8%
10. Semi-finished iron &steel mill products … $4.6 billion, up 43.6%.

Canadian Trade Surplus Expected to Slow Further

Given that about one third of Canada’s sales to the U.S. arise from the oil and gas industry, lower oil prices should further depress Canadian exports to America during 2008.

Even though the value of the Canadian loonie has dropped against the U.S. dollar, the weak global economy and market turbulence should preclude any significant rise in demand for Canadian products in the short-term.

Also, Canada is a major player in providing products in the slumping automotive sector, so a full Canadian rebound in trading strength depends on a rebound in consumer spending in America.

The silver lining for America is that world’s most powerful economy will make significant progress in reducing its trade deficit this year – at the expense of Canada.

Sources for this Article

This article presents independent calculations and insights based on data drawn from the CIA World Factbook and the U.S. Census Bureau – Foreign Trade Statistics.

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