Canada's Economy Heavily Reliant on US Trade as Tariffs Take Effect

Canada's economy is heavily reliant on trade with its largest export partner, the United States. In the first half of 2026, Canada sent $214.8 billion (C$298.2 billion) in goods to the U.S., accounting for a staggering 68% of its total merchandise exports.

The UK ranked second as a recipient of Canadian exports, with a share of 9.2%, but this figure is heavily influenced by precious metals transactions. China followed closely behind at 5.0%. The data from Statistics Canada highlights the significant impact that trade with the U.S. has on Canada's economy.

A key concern for Canada is the effect of tariffs on its exports to the U.S. In August 2026, 50% tariffs were implemented on a range of Canadian goods, covering roughly C$28 billion worth of exports. According to BMO senior economist Robert Kavcic, these tariffs could cut half a percentage point from Canada's GDP growth.