Canada and the US: The Trade Relationship Is Huge, Profitable, and Bruised

The U.S. and Canada have done more than share a peaceful border for more than two
centuries. The two nations also enjoy one of the most lucrative and mutually profitable trade relationships in the world.

So, any threat to that long-term stable relationship is cause for worry, experts on both sides of the Detroit River say.

“The Michigan economy, particularly southeastern Michigan’s economy, is intrinsically related to our ability to trade across the border with Canada, and it’s been that way for a century,” said Patrick L. Anderson, Principal and Chief Executive Officer of East Lansing based Anderson Economic Group.

“Canada is the U.S.’s largest export market. We buy more of your stuff than anyone else by a long shot,” said Colin Bird, Consul General of Canada in Detroit. “And if you look directly at Michigan, it’s close to an $80-billion bilateral trade relationship that dwarfs the trade relationship that the state has as a whole with many nations, and that’s just Michigan.”

And almost more critical than looking at those import-export numbers, Bird added, is the integration of the cross-border economy here.

“We make things together,” he said. “So we’ve developed an ecosystem between Ontario, Quebec, and Michigan, where we have completely integrated our supply chains to out-compete the world. And when you have structured yourself in a way over 120-plus years in the Windsor-Detroit corridor, any disruption is potentially damaging to our global competitiveness on both sides of the border.”

And while assembled vehicles and auto parts comprise a huge share of the cross-border trade, virtually every sector of Michigan’s economy benefits – and feels the impact when something interrupts that trade.

Famed Detroit bookseller John King said he noticed an immediate fall off in visits from his Canadian customers in mid-2025 when U.S. President Donald Trump imposed new tariffs on Canadian imports and spoke about Canada about becoming the 51st state. King said his Saturday business, heavily reliant on Canadian shoppers crossing the border for weekend trips, dropped 30% immediately.

Henry Ford Health has nearly 1,500 Canadian employees who cross the border to work in the U.S.

Not just goods and services but cross-border employment is part of that trading relationship. Government statistics show that almost one in 10 in Michigan’s workforce is foreign born. While many of those workers are already naturalized U.S. citizens or working on guest worker visas from many countries, many Windsor-Detroit commutes happen every day.

For example, Henry Ford Health in Detroit reported that as of October 2025, 1,441 of its team members were residing in Canada, including nurses who cross the border every day.

The Detroit-Windsor Tunnel alone provides a rich benefit to both nations and to the neighboring cities of Detroit and Windsor. Anderson Economic Group reported in July 2025 that more than 3.7 million vehicles crossed the border via the Detroit-Windsor Tunnel in 2023, traveling for work, sporting events, entertainment, and shopping.

This traffic produced an economic impact totaling more than $595 million in Michigan while generating over $22 million in income tax, sales tax from employees and visitors spending, and property tax revenue for the State of Michigan.

And the majority of that economic activity and tax revenue generated by the tunnel stayed in Detroit. In 2023, tunnel operations accounted for more than $363 million in local economic activity and $13 million in municipal tax revenue.

With such a lucrative cross-border trade underway, many worry that the Trump tariffs will damage the economy on both sides of the border and it’s hard to predict how the relationship will evolve.

“It changes by the day,” Bird said.

Clearly the stable, long-term trade relationship has been bruised, at least for now.