• September 17, 2017
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  • Trade

The Staggering Numbers Behind the World’s Closest Trade Relationship

You might be surprised by how much the United States buys from Canada – and vice versa.

Whether we’re discussing the ancient merchants that traversed the legendary Silk Road or the transfer of goods across modern border lines, trade has always been about building close relationships.

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The United States and Canada are each other’s best customers.

There are many examples of strong and mutually beneficial trade relationships all throughout history, but one doesn’t have to look far back to find what could be considered the closest bilateral relationship ever known: the one between the United States and Canada.

These two countries are each other’s best customers, and they share the world’s longest international border (5,525 miles long).

They are both Western democracies, with shared cultural heritage and similar standards of living – and each day, the two countries exchange a whopping $1.7 billion in goods and services.

Our infographics (which you can see below) highlight numbers and tangible examples behind this lengthy relationship between the U.S. and Canada.

America’s best customer

Despite China surpassing Canada in 2015 to become America’s largest trading partner in aggregate, the majority of Chinese trade comes in the form of imports ($462 billion in imports vs. $115 billion in exports).

That means China is actually only the third-largest customer of American-made goods, buying about 8 percent of total U.S. exports in 2016.

The largest buyer of American goods is still north of the border – in fact, Canadians buy about 18 percent of total U.S. exports, which is more than twice that of China.

Canada is the most important international customer for 36 states – and every day the equivalent trade between the U.S. and Japan happens across just one bridge (Ambassador Bridge) between Detroit, Michigan and Windsor, Ontario.

Here’s what Canada buys from the U.S.:

Canada’s best customer

Americans return the favor in a big way: An incredible 76 percent of Canadian exports are bought by Americans.

Here’s what the U.S. buys from Canada:

It’s estimated that 78 percent of Canadian exports to the U.S. are raw materials, parts and components and services used to create other goods in the United States.

Close ties

Through many years of trade, the supply chains between the two countries have become highly integrated.

Much of the time, the U.S. is buying raw materials and intermediate goods, which get used in final products destined for domestic and global markets. Many of those even get sold directly back to Canada.

This could be buying Canadian crude to reduce reliance on OPEC, importing low-cost hydro electricity during times of heavy rainfall or using Canada’s steady supply of aluminum to make more environmentally sound vehicles.

Few countries in the world have this kind of economic interdependence – and the history, integration and value of goods traded makes this arguably the world’s closest bilateral trade relationship.

This article first appeared on the World Economic Forum and was republished with permission. The infographics and graphs are courtesy of Visual Capitalist.

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Canada is Open for Business

At the Heart of Free Trade

Shining a Light on Trade

Jeff Desjardins is a founder and editor of Visual Capitalist.

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