Canada’s US Trade Dependence Is Quietly Easing

Scotiabank estimates US-bound exports fell to 69% in April, while Canada’s effective tariff hit stayed around 2.9% thanks to CUSMA exemptions.

What’s going on here?

Canada is leaning a little less on the US to sell its goods: Scotiabank estimates the US took 69% of Canadian exports in April, down from a 76% average in 2024, even as the overall tariff hit stayed around 2.9% thanks to CUSMA exemptions.

What does this mean?

The shift doesn’t mean the US stopped buying Canadian products. It mostly reflects faster growth in shipments to other destinations, with Scotiabank noting exports to non-US markets were 48.3% higher than in 2024, helped in part by outsized gold exports overseas. On tariffs, the headline picture still looks mild: because most cross-border trade qualifies for duty-free treatment under the Canada-United States-Mexico Agreement (CUSMA), Scotiabank puts Canada’s “effective tariff rate” – basically the average hit across all exports – at about 2.9%. But that average masks concentration: the share of Canadian goods entering the US that face tariffs has inched up, and sector-specific levies on metals like steel, aluminum, and copper can squeeze margins by raising costs through the supply chain. Scotiabank says tweaks taking effect June 1st should trim that burden a bit through the end of 2027, but they don’t remove the underlying constraint.

Why should I care?

For markets: Scotiabank’s 69% figure can still leave metals exporters doing the heavy lifting.

A lower US export share can make Canada’s top-line data look less sensitive to a US slowdown, but the composition matters. If diversification is driven by gold shipments, that can be less supportive for broad corporate earnings and employment than a similar rise in manufactured exports, since gold flows can be volatile and don’t pull as many domestic suppliers along. At the same time, a low average tariff rate can be misleading for investors watching specific industries. Tariffs on steel, aluminum, and copper don’t spread evenly across the economy; they land on particular producers and downstream customers, where higher input costs can pinch profits and change who stays competitive. The result: Canada’s macro backdrop can look steadier even while metals-linked sectors diverge sharply from the national “tariff hit” headline.

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Originally Posted June 10, 2026 – Canada’s US Trade Dependence Is Quietly Easing