Canada-U.S. trade fell $1.9 billion in first half of 2026 as motor vehicle exports collapsed
The decline marks a sharp shift in bilateral trade, with motor vehicles and parts down nearly 19 percent as Trump administration tariff threats loom.
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Canada's trade with the United States dropped by $1.9 billion between the first quarter of 2024 and the first quarter of 2026, marking a significant decline in the critical bilateral relationship as the Trump administration ramps up pressure ahead of formal CUSMA talks.
Total Canada-U.S. trade in goods and services hit $322.8 billion in the first three months of 2026, down 0.6 percent from the same quarter two years earlier. Canadian exports to the U.S. fell 1.6 percent, or $2.8 billion, while U.S. imports into Canada rose 0.6 percent, or $935 million, according to Global Affairs Canada.
The sharpest damage came in motor vehicles and parts — a sector that has long anchored Canadian manufacturing. Two-way trade in vehicles and components fell 18.9 percent, or $6.7 billion, the largest decline across any product category. Iron and steel also contracted sharply. Precious stones and metals saw the largest gains, rising $2.8 billion, along with cocoa-related products.
On the export side, Canadian shipments to the U.S. totalled $169.6 billion in the first quarter of 2026, while imports from the U.S. were $153.1 billion. The weakness in vehicle exports is particularly concerning given the sector's importance to Ontario and Quebec manufacturing and employment.
The U.S. is escalating pressure on Canada ahead of formal CUSMA renegotiations. President Donald Trump has threatened to impose new tariffs on Canadian goods, with specific focus on autos and other sectors. The timing of the trade decline, occurring amid these broader tensions, underscores vulnerability in Canada's largest export market. The auto sector, already facing global headwinds around electrification and supply-chain restructuring, is now confronting the prospect of additional tariff barriers.
Are Trump's threatened tariffs already in effect, or are they still pending? When would they take effect if implemented?
Which Canadian regions and industries are being hit hardest by the motor vehicle parts decline, and what is the employment impact?
We'll update this story as answers emerge.
By the numbers
How much did Canada-U.S. trade decline between Q1 2024 and Q1 2026?
Canada-U.S. trade dropped by $1.9 billion between the first quarter of 2024 and the first quarter of 2026.
What was the total value of Canada-U.S. trade in goods and services in Q1 2026?
Total Canada-U.S. trade in goods and services reached $322.8 billion in the first three months of 2026.
Which product category saw the largest trade decline?
Motor vehicles and parts fell 18.9 percent, or $6.7 billion, the largest decline across any product category.
How much did Canadian exports to the U.S. fall in the first quarter of 2026?
Canadian exports to the U.S. fell 1.6 percent, or $2.8 billion, in the first quarter of 2026.
