Canada Remains Critical to U.S. Energy, Auto and Agricultural Supply Chains

Contrary to US President Donald Trump’s claims, Canada remains a critical US trading partner, supplying about 65% of US crude oil imports as well as much of its aluminum and softwood lumber imports.

Canada supplies the United States with large quantities of crude oil and other critical commodities, while the two countries remain deeply integrated economically. [Photo: Kyle Pearce Flickr]

Canada accounted for about 12% of all US imports and 14% of US exports in 2026, Daniel Dale wrote in an analysis for CNN.

US reliance on Canada is greater in many states along the northern border and for certain industries and products. The two countries’ auto manufacturing sectors are deeply intertwined.

In one of his recent posts, Trump cited what he described as a $60 billion trade deficit with Canada as a reason US farmers were struggling.

However, US agricultural trade with Canada is overwhelmingly tariff-free. The US Department of Agriculture says that “almost all” US agricultural exports to Canada face no tariffs, while the World Trade Organization estimates that about 97% of US agricultural exports to Canada are duty-free.

Canada’s highest agricultural tariffs are rarely applied. Hefty tariffs on dairy and poultry products generally apply only after the US exceeds specified tariff-free quotas.

The US filled only about 22% of its milk quota over the past year, according to Trevor Tombe, an economics professor at the University of Calgary.

The US trade deficit with Canada is largely driven by energy imports.

The US imported about 3.9 million barrels of Canadian crude oil per day in 2025, according to the US Energy Information Administration.

The US imported $111 billion worth of Canadian energy and exported $26 billion in US energy to Canada that year.

In other words, without energy trade, the US would have a trade surplus with Canada. However, US refiners would lose access to large quantities of Canadian crude, which is transported relatively easily across the two countries’ shared border.