LOCATION: National
Issue/Source: Canada-U.S.
Date: May 2025
Suggested Responses
- Canada’s economic partnership with the United States (U.S.) is underpinned by highly integrated transportation networks.
- These networks facilitate the smooth flow of goods across our borders and enhance connectivity between our people and communities.
- Given the value of trade that moves between our two countries, Transport Canada is committed to supporting our integrated supply chains and economies. We will continue to work with the U.S. Department of Transportation to create modern, safe, secure, and efficient transportation systems that benefit both nations.
- We continue to collaborate on shared transportation priorities, including enhancing safety and security, strengthening supply chains, driving innovation, and improving infrastructure.
IF PRESSED
- Tariffs and other trade measures have the potential to disrupt deeply integrated transportation networks and long-established North American supply chains.
- Transport Canada is monitoring impacts on the transportation network and Canadian transportation stakeholders to mitigate any potential disruptions.
BACKGROUND INFORMATION
- Canada and the U.S. have had a longstanding and robust trading relationship. The U.S. is Canada’s top trading partner, accounting for 76.4% of Canadian exports and 49.2% of imports in 2024. This economic partnership is underpinned by highly integrated transportation networks that span road, rail, air, and maritime systems. These networks facilitated the movement of $973.7 billion in goods across the border in 2024, supporting critical supply chains and driving economic growth in both countries.
- Imports and exports move by road, rail, water, air, and pipeline. Trucking continues to be the dominant form of freight transportation between Canada and the U.S., accounting for over half (55.5%) of total trade flows by value. Marine trade accounts for a small share of Canada’s trade with the U.S while air cargo is typically reserved for the movement of high-value/time-sensitive goods.
- Cooperation between TC and the U.S. Department of Transportation (U.S. DOT) is highly integrated across all modes and at all levels. In particular, TC and U.S. DOT maintain extensive regulatory cooperation to enhance cross-border efficiency, ensure safety and security, and promote consistency in standards.
- Since March 6, Canadian goods that are compliant with the Canada-United States-Mexico Agreement (CUSMA) have been exempt from U.S. tariffs that entered into force on March 4, 2025 (i.e., a 25% general tariff and a reduced 10% tariff applied to potash and energy products). Other tariffs that are in place on Canada include a 25% tariff on steel and aluminum imports (since March 12, 2025) and a 25% tariff on all imported passenger vehicles and light trucks (since April 3, 2025).
- In response to the U.S. tariffs, Canada has implemented a series of retaliatory measures: (i) February 4, 2025: a 25% tariff on $30 billion of U.S. origin goods, (ii) March 13, 2025: a 25% tariff on $29.8 billion of U.S. imports, including steel and aluminum products, and (iii) April 9, 2025: a 25% tariff on non-CUSMA compliant U.S.-made vehicles and on the non-Canadian and non-Mexican content of CUSMA-compliant U.S. vehicles.
- Canadian transportation companies are highly exposed to tariffs and other trade measures, including through reduced demand and associated merchandise volumes, rerouted trade flows, and increased cross-border compliance burdens.