United States Trade Relationship with Canada and China

United States Trade Relationship with Canada and China
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United States Trade Relationship with Canada and China
The United States (US) is the largest trading country in the world and has established trade relations with most countries (Office of the United States Trade Representative, n.d.). Two of its top trade partners are Canada and China, which will be the focus of this paper.
US Trade with Canada
The US and Canada share the most extensive border globally, and every day, approximately $2.6 billion in goods and services get traded across the two countries (US Department of State, 2022). In addition, the two countries share a trade agreement- The United States-Mexico-Canada Agreement (USMCA)- with Mexico to facilitate free trade in the region. The US has a negative trade deficit with Canada, which has been rising in the last five years, as shown in figure 1. Trade between the US and Canada supports millions of jobs and facilitates a secure flow of people and goods across the US-Canada border, which is critical for the economic prosperity and competitiveness of both countries (Government of Canada, 2022)
Figure 1: US-Canada trade in Goods
Year

Exports

Imports

Balance

2022

206,022.1

260,676.1

-54, 654.0

2021

307,758.1

357,787.5

-50,029.4

2020

256,212.3

270,024.9

-13,812.6

2019

292,820.3

318,588.8

-25, 768.5

2018

299,731.7

318,574.8

-18,843.1

Data Source: (US Census Bureau, 2022a)
US Trade with China
The US and China have an uneasy trade relationship characterized by trade wars and trade deals that continue to be a topic of contention (Ivanovitch, 2020). Despite this, China continues to be US’s top trade partner, with the trade between the countries expanding by 11.7% in 2022 CITATION Xij22 \l 1033 (Xijia, 2022). Although the US has been trying to lessen imports from China through increased tariffs and trade restrictions, imports from China are still high, contributing to a high trade deficit, as shown in figure 2. Despite the turmoil, the US-China trade relationship benefits both countries because it has lowered commodity prices for US consumers and generated income for the Chinese (Curran, 2020).
Figure 2: US-China Trade in Goods
Year

Exports

Imports

Balance

2022

83,912.9

318,406.4

-234,493.5