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Going International: Exploring Canada as a Market for US Exports

Last update on April 14, 2016.

CanadaExporting to foreign markets brings many business benefits. It not only provides enterprises an opportunity to expand and grow their operations to markets that offer more business opportunities, but also delivers long-term benefits in the form of an expanded customer base and improved brand value.

Canada is a prime location for businesses that want to reap the benefits of exporting the products to an international market. Although modest in size, the country offers significant opportunities for exports because of its wealthy and highly advanced market. Since Canada and the U.S. both are affluent industrialized economies, the two countries share a healthy trading relationship. Since the Canada-U.S. Free Trade Agreement became applicable in 1989, the US exports to Canada have tripled, and today, Canada is the biggest market for US exports.

So, this week, we explore Canada as a potential market for exports from the US. Let’s have a look at the main products exported to the country from the U.S. and what factors should be kept under consideration when deciding to export a product to Canada.

What Products Does Canada Import from the US?

America’s exports to Canada account for 53.3% of the total country’s imports equivalent to around $22.3 billion. Here is a list of the top 10 Canadian imports from the US.

  1. Vehicles - $43.8 billion
  2. Machinery - $31.9 billion
  3. Oil - $20.8 billion
  4. Electronic equipment - $12.5 billion
  5. Plastic products - $11.1 billion
  6. Medical and technical equipment - $5.8 billion
  7. Aircraft - $5.4 billion
  8. Iron products - $5 billion
  9. Paper - $4.4 billion
  10. Pharmaceuticals - $4.3 billion

Considerations of Exporting Goods to Canada

Exporting goods to an international market is an important business decision which involves significant risks and rewards. The risks can be minimized through research and careful study of the potential market. When deciding to export goods to Canada, it is important that you keep the following factors under consideration.

  • Market Dynamics – Will you be able to sell enough units of the product to cover the exporting costs? Will your customer be willing to pay the price you’ve put on the product? Are there any substitutes available for your product in Canada?
  • Supplier Reliability – Will you be able to get the raw materials in the quality and quantity you need to manufacture your product and meet demands of a new market? Does your supplier comply with Canadian rules and regulations?
  • Cash Flow – Can you manage the financial demands of exporting to an international market? Do you have enough capital to invest in transportation and insurance?

The Future of the US-Canada Trading Relationship

While Canada and the United States are each other’s largest trading partners already, there is still room to further strengthen the trading relationship. The US government officials have been meeting and encouraging political and business leaders to work with the Canadian counterparts. On the other hand, Canadian leadership is welcoming US companies to their country and inviting them to explore a market that offers unprecedented growth opportunities.


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