However, the international shipment of non-U.S. goods through the United States can make standard measures of bilateral trade balances potentially misleading. For example, it is common for goods to be shipped through regional trade hubs without further processing before final shipment to their ultimate destination. This can be seen in data reported by the United States’ two largest trading partners, Canada and Mexico.
The U.S. data report a $17.5 billion goods deficit with Canada in 2017, and a $71.1 billion goods deficit with Mexico. Both countries, however, reported substantially larger U.S. goods surpluses in the same relationship. In 2017, Canada reported a $97.7 billion surplus, and Mexico a $132.4 billion surplus.
This reflects the large role of re-exported goods originating in other countries (or originating in one NAFTA partner, arriving in the United States, and then returned or re-exported to the other partner without substantial transformation). U.S. statistics count goods coming into the U.S. customs territory from third countries and being exported to our trading partners, without substantial transformation, as exports from the United States. Canada and Mexico, however, count these re-exported goods as imports from the actual country of origin. In the same way, Canadian and Mexican export data may include re-exported products originating in other countries as part of their exports to the United States, whereas U.S. data count these products as imports from the country of origin. These counting methods make each country’s bilateral balance data consistent with its overall balance, but yield large discrepancies in national measures of bilateral balance. It is likely that a measure of the U.S. trade deficit with Canada and Mexico excluding re-exports in all accounts would be somewhere in between the values calculated by the United States and by our country trading partners.
Canada is currently our 2nd largest goods trading partner with $582.4 billion in total (two way) goods trade during 2017. Goods exports totaled $282.5 billion; goods imports totaled $300.0 billion. The U.S. goods trade deficit with Canada was $17.5 billion in 2017.
Trade in services with Canada (exports and imports) totaled an estimated $91.5 billion in 2017. Services exports were $58.7 billion; services imports were $32.8 billion. The U.S. services trade surplus with Canada was $25.9 billion in 2017.
According to the Department of Commerce, U.S. exports of Goods and Services to Canada supported an estimated 1.6 million jobs in 2015 (latest data available) (1.2 million supported by goods exports and 360 thousand supported by services exports).
