Are you looking to expand your business into the Canadian market? Or perhaps you’re a Canadian company wondering where the biggest opportunities lie for your exports? Understanding Canada’s trading relationships can unlock massive potential for your import/export business.

Canada’s largest trade partners are:

• United States: US$435 billion
• mainland China: $21.7 billion
• United Kingdom: $20.7 billion
• Japan: $10.9 billion
• Mexico: $6.3 billion
• South Korea: $5.6 billion
• Netherlands: $5.1 billion
• Germany: $4.9 billion
• Switzerland: $4.6 billion
• India: $3.9 billion

Who Are Canada’s Top Merchandise Export Partners?

Canada exported over $568 billion worth of goods in 2024. That’s not pocket change – that’s serious business opportunity. But here’s the fascinating part: just 15 countries captured 93.5% of all Canadian exports. What does this tell us about market concentration and opportunity?

Rank	Country	Export Value	% of Total Exports	Products
1	United States	$435 billion	76.5%	vehicles, oil, machinery and wood
2	China	$21.7 billion	3.8%	Wood pulp, mineral fuels, ores, cereals and machinery
3	United Kingdom	$20.7 billion	3.6%	Gold, aircraft, machinery and mineral fuels
4	Japan	$10.9 billion	1.9%	Mineral fuels, cereals (wheat), ores and wood products
5	Mexico	$6.3 billion	1.1%	Vehicles, machinery, electrical equipment, plastics and mineral fuels
6	South Korea	$5.6 billion	1.0%	Mineral fuel, oil, mineral ores, meat and wood pulp
7	Netherlands	$5.1 billion	0.9%	Mineral fuel, oil, metal and non-metallic mineral products
8	Germany	$4.9 billion	0.9%	Machinery, equipment, mineral fuels, oil, precious stones and metal
9	Switzerland	$4.6 billion	0.8%	Gold, packaged medicaments, machinery and gas turbines
10	India	$3.9 billion	0.7%	Mineral fuels, oil, vehicles, machinery and equipment, precious stones and metal
11	France	$3.2 billion	0.6%	Aircraft, spacecraft, iron ore and gas turbines
12	Belgium	$2.72 billion	0.5%	Diamonds, iron ore and packaged medicaments
13	Hong Kong	$2.7 billion	0.5%	Gold, precious stones, metals, scrap aluminum, gas turbines and fish
14	Italy	$2.4 billion	0.4%	Cereals, pharmaceutical products, machinery and aircraft
15	Australia	$2.3 billion	0.4%	Machinery, precious metals and vehicles

Discover more: Documents Required for Customs Clearance in Canada

Have you ever wondered which continents offer the best opportunities for Canadian exporters? The regional breakdown reveals some eye-opening insights:

Region	Share of Total Exports	Strategic Importance
North America	77.6%	Dominant market due to proximity and trade agreements
Asia	10.6%	Fast-growing economies with increasing demand
Europe	9.2%	Established markets with high purchasing power
Latin America*	1.4%	Emerging opportunities (*excluding Mexico)
Africa	0.7%	Untapped potential with growing economies
Oceania	0.5%	Niche markets led by Australia and New Zealand

Notice anything interesting? North America captures more than three-quarters of Canada’s exports, but Asia and Europe together represent nearly 20% – that’s substantial business worth pursuing.

Who Are Canada’s Top Import Partners?

While exports tell one story, imports reveal another crucial dimension of Canada’s trade relationships. Smart businesses understand both sides of the equation.

Canada sources goods from strategic partners worldwide, creating opportunities for international suppliers:

Country	Import Value ($ billions)	Percentage of Total Imports	Products
United States	$ 317	49 %	Machinery, vehicles, mineral fuels and plastic
China	$ 63	10 %	Machinery, electronics, plastics, toys and textiles
Mexico	$ 36	6 %	vehicles, machinery, pharmaceuticals and medical devices
Germany	$ 19	3 %	Vehicles, machinery, pharmaceuticals and medical devices
Japan	$ 15	2.5 %	Vehicles, machinery, electronic equipment and optical/medical instruments

The Trade Balance Reality: Where Opportunities Hide

Here’s where it gets interesting for your business strategy. Canada’s trade balance varies dramatically by partner, revealing both challenges and opportunities.

Country	Trade Surplus	Growth from 2023	Opportunity Level
United States	$160.6 billion	+27.4%	Massive, stable
United Kingdom	$13.7 billion	+290.8%	Explosive growth
Hong Kong	$2.5 billion	–	Gateway potential
Netherlands	$1.8 billion	–	European access
UAE	$1.3 billion	+38.8%	Middle East hub

Notice that 290.8% growth with the UK? That’s not a typo—that’s an opportunity explosion waiting for the right business to capitalize on it.

Canada’s Trade Deficit Partners (2024)

Understanding where Canada runs deficits reveals import opportunities:

Country	Trade Deficit	Primary Import Categories	Your Opportunity
China	-$42.3 billion	Machinery, electronics, textiles	Can you compete on quality/speed?
Mexico	-$28.0 billion	Vehicles, machinery	USMCA advantages available
Germany	-$12.2 billion	Vehicles, pharmaceuticals	Premium market entry
Vietnam	-$9.9 billion	Manufacturing goods	Cost competition
South Korea	-$6.7 billion	Automotive, electronics	Tech integration

Strategic Questions for your Business

Understanding these trading relationships is just the beginning. The real question is: How will you leverage this information to grow your business?
Consider These Strategic Questions:

1. Which of Canada’s top trading partners align with your business goals?
2. Are there underserved markets where you could establish a strong position?
3. How can you tap into the massive U.S.-Canada trade corridor?
4. What opportunities exist in Canada’s growing relationships with Asian markets?

FAQ

1. Why is Canada so dependent on the United States for trade?
   Canada and the US share the world’s longest border and most comprehensive trading relationship, with $3.6 billion worth of goods crossing daily. Geographic proximity, similar values, and decades of economic integration make the US Canada’s natural largest trading partner, accounting for about 76.5% of Canadian exports.
2. How much does Canada really trade with the US compared to other countries?
   The United States receives 76.5% of Canada’s total exports, worth about $435 billion in 2024. This makes the US Canada’s dominant trading partner by far, with the next largest partners being China, the UK, and Japan receiving much smaller shares.
3. Is Canada “too dependent” on US trade? What do experts say?
   Experts are divided. While 80% of exports go to the US, research shows this regional concentration is normal globally – 69% of European exports stay within Europe, and 53% of Asian exports remain in Asia. Canada ranks 51st out of 121 countries for export diversity, placing it roughly in the middle.
4. What’s this about recent US tariffs on Canada? What happened?
   In February 2025, President Trump imposed 25% tariffs on Canadian imports (10% on energy and potash). After a brief pause, tariffs were implemented from March 4-6, 2025, then paused again for goods qualifying under CUSMA (the North American trade agreement).
5. Who are Canada’s top 5 trading partners besides the US?
   After the United States, Canada’s largest trading partners are China, the United Kingdom, Japan, and Mexico. However, their trade volumes are significantly smaller than US trade.
6. Why doesn’t Canada just find more reliable trading partners than the US?
   Geography and economics make this challenging. Canada can’t quickly shift exports to new markets – if the US no longer wants Canadian aluminum or potash, there isn’t sufficient rail and port capacity to send it elsewhere. The same applies to the 4 million barrels of crude oil that go to the US daily.
7. What is the CPTPP and how does it help Canada diversify trade?
   The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a free trade agreement between Canada and 11 other countries in the Indo-Pacific region. It gives Canada preferential access to markets representing over 15% of global GDP and 580 million consumers.
8. How successful has Canada been at trade diversification recently?
   Not very successful. Excluding autos and energy, the proportion of Canadian exports going to non-US countries has actually declined over the past decade. Export concentration to the US reached a low of 60% just over a decade ago but has been climbing steadily since.
9. Does Canada have a trade surplus or deficit with the US?
   Canada has a trade surplus with the US, primarily due to energy exports. Based on Statistics Canada data, Canada’s merchandise trade surplus with the US was on track to reach C$100 billion in 2024, equivalent to 3.2% of Canadian GDP.
10. What are Canada’s main exports to its trading partners?
    Energy exports comprise about 27% of all merchandise exports to the United States. Canada also exports significant amounts of automobiles, forestry products, metals and minerals, and agricultural goods. Energy dominance varies by partner.
11. Which countries does Canada import the most from?
    Canada has its highest trade deficits with China (-$42.3 billion in 2024), followed by other Asian countries like South Korea and Japan. This indicates Canada imports significantly more from these countries than it exports to them.
12. Is Canada part of any major trade blocs besides NAFTA/CUSMA?
    Yes, Canada is a member of several trade agreements including the CPTPP (covering 12 countries in the Indo-Pacific), CETA (with the European Union), and bilateral agreements with countries like South Korea.
13. Why do some Canadians on Reddit/forums worry about trade diversification?
    Recent trade tensions and tariff threats have been a “stark wake-up call” for Canadian businesses. Many Canadians express concern that putting “all our eggs in the US basket” for decades has left the economy vulnerable to American political decisions.
14. What’s the “third option” or “fourth option” for Canadian trade?
    The “third option” was proposed in the 1970s by Mitchell Sharp, advocating for trade diversification away from the US. Today’s “fourth option” involves maintaining US market access while expanding trade within Canada and to other global partners.
15. How integrated are Canada-US supply chains?
    Extremely integrated. In the auto sector, North American auto parts cross all three borders (US, Canada, Mexico) up to 7-8 times before final vehicle assembly. Canada supplies 8-9% of what Americans consume in automotive, while most Canadian exports are inputs used by American businesses.
16. Can Canada increase interprovincial trade to reduce US dependence?
    While interprovincial trade could help reduce US dependence, research suggests the scale of such opportunities is likely constrained by both geographic realities and Canada’s industrial mix. It’s not a complete solution.
17. What role does energy play in Canada-US trade?
    Energy is crucial – Canada and the US are each other’s principal source of imported energy. Two-way energy trade reached CAD$198.2 billion in 2023, with Canada registering a CAD$134 billion surplus. About 94% of Canada’s crude oil exports to the US travel through transboundary pipelines.
18. Are there any success stories of countries joining CPTPP?
    The UK became the first new member to join CPTPP since its establishment in 2018, formally joining in December 2024. However, economic benefits appear modest – the UK government estimated only a 0.06% increase in GDP.
19. What’s the current status of China and Taiwan’s CPTPP applications?
    Both China and Taiwan have applied to join CPTPP, but no Accession Working Group has been created yet. China’s membership would be significant given it’s the world’s second-largest economy, but existing members may oppose due to human rights and security concerns.
20. How do Americans view trade with Canada?
    According to a 2025 Pew Research survey, 44% of Americans say the US and Canada benefit equally from trade, while 26% believe Canada benefits more than the US (up from 14% in 2023). Only 10% think the US benefits more than Canada.