Canadian Trade Surplus with US Falls

Analysts who understate the effects of an American recession on Canada should consider the following international trade fact of life: the United States of America is the largest consumer of Canadian products, buying over 80% of total exports shipped from Canada.

Conversely, Canada imports about 55% of its international merchandise from the U.S.

In 2007, Canada exported an estimated US$433 billion worth of manufactured goods and resource materials onto the international trade marketplace. Canadian imports totalled roughly $387 billion, resulting in Canada’s $46-billion overall trade surplus last year.

Canadian Trade with U.S.

A closer look at Canada’s trade statistics with the United States reveals that Canada enjoyed a US$64.7 billion trade surplus with its American trade partner in 2007. The most recent surplus statistic is 25.2% higher than the Canada-US surplus in 2003 but represents a 9% decrease from its $71.8 billion surplus in 2006.

Exports from Canada to America

With a population of 33.2 billion, Canada exported US$313.1 billion worth of merchandise to the United States in 2007, a 3.5% increase from 2006 and up by 41.3% in 4 years. The following product categories represent 50% of Canadian exports to America.

1. Crude oil …US$38 billion – up 16.2% from 2006 (12.1% of Canada-to-U.S. exports)
2. New and used passenger cars … $36.8 billion – up 0.6% (11.8%)
3. Natural gas … $22.4 billion – down 6.7% (7.1%)
4. Other automotive parts and accessories … $15.3 billion – down 1.9% (4.9%)
5. Trucks, buses and special purpose vehicles … $11 billion – down 10.3% (3.5%)
6. Aluminum … $7.5 billion – down 2.1% (2.4%)
7. Other petroleum products … $7.4 billion – up 13% (2.4%)
8. Abrasives, belting, boxes and glass … $5.64 billion – down 3% (1.8%)
9. Plastic materials … $5.63 billion – down 3.3% (1.8%)
10. Fuel oil … $5.5 billion – up 23.9% (1.77%).

Burdened by slowing automotive industry sales, Canada’s top 10 export product categories experienced an overall gain of 1.7% in sales to the U.S. in 2007. This is less than half the 3.5% gain for the top 10 Canadian exports to the U.S. from 2005 to 2006.

Fastest-Growing Canadian Exports to America

Below are selected Canadian exports to America in 2007 with the highest percentage sales increases from 2006.

1. Nickel … US$2.1 billion (up 73.5% from 2006)
2. Food oils and oilseeds … $882.6 million (up 51.1%)
3. Computers … $689.3 million (up 48.4%)
4. Drilling and oil field equipment … $1.5 billion (up 44.9%)
5. Other military equipment … $492.2 million (up 44.8%).

Fastest-Declining Canadian Exports to America

Selected Canadian exports to America in 2007 with the highest percentage sales decreases from 2006 are listed below.

1. Cotton apparel and household goods … US$243.2 million (down 24.6% from 2006)
2. Finished molding, shingles and wallboard … $4.5 billion (down 24.3%)
3. Newsprint … $2.3 billion (down 21.5%)
4. Railway transportation equipment … $433.1 million (down 21.1%)
5. Lumber and rough wood … $5.3 billion (down 20.3%).

Canadian Imports from America

Canadian imports from the U.S. rose by 7.7% to $248.4 million in 2007, up by 46.2% since 2003.

Of American exports to Canada in 2007, the following product categories had the highest values and in total represented 37% of all U.S. shipments into Canada.

1. Other vehicle parts and accessories … US$24.1 billion – up 1.1% from 2006 (9.7% of Canadian imports from America)
2. New and used passenger cars … $15 billion – up 14.6% (6.1%)
3. Trucks, buses and special purpose vehicles … $12.5 billion – up 6.2% (5%)
4. Other industrial machines … $7.3 billion – down 1.6% (3%)
5. Engines and engine parts … $6.7 billion – down 0.3% (2.7%)
6. Electric apparatus … $6.1 billion – up 5.1% (2.5%)
7. Plastic materials … $5.6 billion – down 1.1% (2.3%)
8. Other industrial supplies … $5 billion – up 1% (2%)
9. Iron and steel mill products … $4.9 billion – up 12.4% (2%)
10. Industrial engines … $4.8 billion – up 1.9% (1.9%).

Last year, Canada’s top 10 import product categories from the U.S. grew by 4.2% from 2006. From 2005 to 2006, the top 10 Canadian imports from the U.S. had gained about 6.6%.

Fastest-Growing Canadian Imports from U.S.

Below are selected American exports to Canada in 2007 with the highest percentage sales increases from 2006.

1. Complete military aircraft … US$187.7 million (up 284,323% from 2006)
2. Musical instruments … $428 million (up 171%)
3. Fuel oil … $1.1 billion (up 79.8%)
4. Business machines and equipment… $1.2 billion (up 73.8%)
5. Corn … $494.8 million (up 72.8%).

Fastest-Declining Canadian Imports from U.S.

Selected American exports to Canada in 2007 with the highest percentage sales decreases from 2006 are listed below.

1. Nonfarm tractors and parts … US$194.2 million (down 29.6% in 2006)
2. Drilling and oilfield equipment … $656 million (down 25.3%)
3. Semiconductors … $2.4 billion (down 23.5%)
4. Computer accessories … $4.1 billion (down 22.1%)
5. Railway transportation equipment … $931.3 million (down 18.9%).

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.

Lac Spruce - Sutton, Quebec

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