America and Canada have one of the largest trade relationships in the world. On Monday, President Donald Trump and Canada’s Prime Minister Justin Trudeau met for the first time, where Trump expressed that the trade relationship with Canada is outstanding. However, the trade relationship between the two countries has not always been smooth. There have been trade wars, acts of retaliation, allegations of dumping, and job losses. Despite the disagreements, most leaders and experts agree that trade ties between the two nations are strong and mostly positive. Trump wants to renegotiate NAFTA, which will be a top priority in his meeting with Trudeau.
1. Complaints against Canada under NAFTA outweigh those against Mexico. Since the inception of NAFTA in 1994, there have been 39 complaints against Canada, almost all by U.S. companies, while Mexico has only faced 23 complaints. Canada has been the target of 70% of NAFTA dispute claims since 2005.
2. The U.S.-Canada lumber battle is another sore spot. In 2002, the U.S. imposed a 30% tariff on Canadian lumber, accusing Canada of “dumping” its wood on the U.S. market. Canada argued against the claim, stating that the tariff cost 30,000 jobs in the lumber industry. This dispute has its roots in the 1980s when American lumber companies accused Canadian counterparts of unfair practices.
3. Smoot-Hawley Act triggers a trade war between the U.S. and Canada. During the Great Depression in 1930, the U.S. imposed tariffs on all countries to protect domestic jobs. Canada retaliated strongly against the U.S., sparking a trade war between the two countries.
4. Canada maintains high tariffs on U.S. eggs, poultry, and milk. Even today, Canada continues to charge steep tariffs on U.S. imports of eggs, chicken, and milk. Tariffs on eggs can be as high as 238% per dozen, and on milk, as high as 292%. This has been a point of contention for some U.S. dairy and poultry farmers.
5. Despite these disputes, the trade relationship between the U.S. and Canada is still considered one of the best in the world. The two countries are deeply interconnected, and trade disputes sometimes result in American companies siding with Canadian companies against U.S. lawmakers. Experts advise against renegotiating or ending NAFTA, as the integration of the three countries is necessary for trade and economic growth.