Need to Know: Canadian prosperity still runs through America

Commentary

Demonstrators at the Ambassador Bridge in Windsor, Ont., Feb. 11, 2022. Nathan Denette/The Canadian Press.

The Hub's twice-weekly Canadian politics roundup

Welcome to Need to Know, The Hub’s twice-weekly roundup of expert insights into the biggest economic stories, political news, and policy developments that Hub readers need to be keeping their eyes on.

Deepening ties with the rest of the world is a worthy goal, but Canada-U.S. trade is still key

By Taylor Jackson, The Hub’s research and prize manager, and Sean Speer, The Hub’s editor-at-large

Prime Minister Mark Carney’s recent trip to Europe has led to a new round of public discourse about diversifying Canadian export markets. The argument is intuitive: in a world of rising protectionism and geopolitical risk, relying so heavily on the United States seems imprudent. Canada should therefore deepen ties with Europe, Asia, and beyond.

Yet while the impulse is understandable, the numbers tell a rather daunting story. Even in June 2025—at the height of Trump’s tariffs and the tumult of a renewed trade war—the data shows that the Canadian economy’s export relationship with the United States dwarfed any other alternative.

Graphic credit: Janice Nelson

The export figures in the accompanying chart are striking. In that single month, Canada exported more to Texas than it did to China. We sold more to Minnesota than to Japan. We even sold more to Oklahoma than to Mexico, Germany, or South Korea. Let that sink in: a mid-sized U.S. state with a little more than 4 million people absorbed more Canadian exports than three of the world’s largest economies.

The pattern repeats itself across the dataset. Exports to California ($1.57 billion) exceeded those to all but a handful of entire countries. Indiana ($1.36 billion) outpaced Japan. Massachusetts ($1.38 billion) nearly doubled exports to South Korea. Time and again, the reality is clear: the U.S. market—including individual states—remains multiple times more important for Canadian exporters than Europe or Asia.

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