U.S.-Canada Relations

The United States and Great Britain—representing Canada—sign a treaty [PDF] formally demarcating the border. This comes more than a century after the 1783 Treaty of Paris establishes the boundary between the newly independent United States and British North America. Spanning 5,525 miles, it is the longest international land border in the world. The treaty also establishes the International Boundary Commission, a binational organization whose primary responsibility is to inspect and maintain the U.S.-Canada border, including through surveying, mapping, and marking.

The U.S. Congress approves a concluded U.S.-Canada reciprocal tariff agreement, which would guarantee free trade of all agricultural products and the reduction of duties on various secondary food products between the two countries. However, despite U.S. approval, the agreement is a central dividing issue in what becomes known as Canada’s “reciprocity election” [PDF] in September. The election sees Robert Borden’s Conservatives, who argue that free trade will result in U.S. economic domination and the slow annexation of Canada, beat Sir Wilfrid Laurier’s Liberal Party, which negotiated the treaty.

The French cargo ship SS Mont-Blanc, laden with various explosives to be used in World War I, accidentally collides with the Norwegian vessel SS Imo in the harbor of Halifax, Nova Scotia. The clash ignites the munitions on board the SS Mont-Blanc, causing a massive explosion soon after that kills nearly two thousand people and injures at least nine thousand more. The blast—and the subsequent tsunami it creates—also devastates Halifax’s entire north end in what is the largest non-nuclear explosion in history at the time. The United States, particularly the state of Massachusetts, swiftly sends humanitarian aid, including supplies, medical personnel, and financial assistance to support recovery efforts. International organizations such as the American Red Cross also provide relief supplies. A year after the disaster, Nova Scotia sends a Christmas tree to Boston as a token of gratitude; in 1971, the province revives the annual tradition, which continues today.

In 1930, U.S. President Herbert Hoover signs into law the Smoot-Hawley Tariff Act, which imposes steep duties on agricultural imports and more than twenty thousand imported goods to protect American farmers and businesses from foreign competition. It follows the 1929 stock market crash, which pushed the United States to turn to protectionist measures to stimulate the economy and safeguard domestic industries. The act prompts retaliatory measures from several countries, including Canada, a major U.S. trading partner. Canada places tariffs [PDF] on more than a dozen U.S. goods, accounting for roughly a third of U.S. exports to the country, and cuts its tariffs on products from the British Empire, seeking alternative trade partners.

Intensified fighting and Nazi Germany’s advances in Europe elevate concerns in North America. U.S. President Franklin D. Roosevelt meets with Canadian Prime Minister William Lyon Mackenzie King in Ogdensburg, New York, to discuss the continent’s defense. The resulting Ogdensburg Agreement establishes the Permanent Joint Board of Defense, a senior advisory body composed of U.S. and Canadian civilian and military representatives that focuses on regional security. It also lays the groundwork for closer military cooperation.

Roosevelt and King meet again at Roosevelt’s home in Hyde Park, New York, where they sign an agreement to coordinate bilateral wartime production efforts and ensure that Canadian-made war materials destined for Great Britain would be included in the Lend-Lease Act. The act, which the U.S. Congress passed the previous month, allows the United States to supply Allied nations with military supplies during World War II without requiring immediate repayment. The inclusion of Canadian-made materials allows Canada to meet Great Britain’s wartime demands and promotes further U.S.-Canada economic cooperation.

Four years after the end of World War II, representatives from the United States, Canada, and ten European countries gather in Washington, DC, to sign the North Atlantic Treaty, creating the North Atlantic Treaty Organization (NATO). The transatlantic security alliance aims to serve as a bulwark against Soviet aggression and help preserve a free, integrated, and democratic Europe.

At the height of the Cold War, the United States and Canada formalize the North American Aerospace Defense Command (NORAD) to protect the continent against potential Soviet air attacks. The binational command, headquartered in Colorado, is the only such command in the world and is responsible for providing aerospace warning and control for North America’s defense. NORAD becomes permanent in 2006, at which point its mission expands to include maritime warning in response to post-9/11 security concerns.

As the auto industry grows in both countries, U.S. President Lyndon B. Johnson and Canadian Prime Minister Lester B. Pearson sign the Canada-United States Automotive Products Agreement, commonly known as the Auto Pact, removing tariffs on most automotive parts and equipment traded between the two countries. At the time the pact is signed, Canada has a $785 million auto trade deficit and a roughly 7 percent share of the North American auto market, which grows to approximately 11 percent by 1971. Economists credit the pact with reviving the Canadian auto industry and establishing an integrated North American market. 

In an address to the nation, U.S. President Richard Nixon announces a new economic policy to “create a new prosperity without war” amid rising unemployment and inflation, partly caused by the Vietnam War. The policy includes calls to cut nearly $5 billion in federal spending, implement a ninety-day freeze on all wages and prices, delink the U.S. dollar from gold, and impose a 10 percent supplemental tariff on all dutiable imports. Nixon also threatens to cancel the U.S.-Canada Auto Pact. Despite the United States being Canada’s largest market, Washington refuses to exempt Ottawa from the new surcharge, spurring Canada’s interest in strengthening trade ties with Europe. However, in December, Nixon lifts the surcharge after an agreement among Group of Ten nations realigns currencies and establishes a new dollar standard. In a 1972 speech to the Canadian Parliament, Nixon says that each country “must define the nature of its own interests.”

The CIA and the Canadian government conduct a joint rescue operation to smuggle six American diplomats out of Iran following the Iranian Revolution. The diplomats found refuge in the homes of Canadian Embassy officials after a group of primarily Iranian university students stormed the U.S. Embassy in Tehran in November 1979, taking sixty-six U.S. personnel hostage. To rescue the diplomats, U.S. and Canadian authorities develop an elaborate cover story that presents them as members of a Hollywood film crew that was scouting movie locations in Iran. Authorities exfiltrate the six diplomats using Canadian passports, fostering goodwill between the two countries.

On a resupply operation, the U.S. Coast Guard icebreaker Polar Sea travels from Greenland to Alaska via the disputed Northwest Passage—seen as a faster route than using the Panama Canal—without receiving permission from the Canadian government. Canada considers the passage to be part of its internal maritime waters, while the United States asserts it is an international strait, open to global shipping. The incident sparks outcry from Canadians, who express concerns about pollution and the U.S. encroachment of Canadian sovereignty in the Arctic. In response, the Canadian Parliament passes laws extending its offshore boundaries and asserting jurisdiction over the passage. In 1988, the two countries sign the Arctic Cooperation Agreement, establishing a framework for cooperation in the Arctic—particularly the Northwest Passage.

Free trade with the United States is once again a contentious issue in Canada’s 1988 federal election. Earlier in the year, incumbent Canadian Prime Minister Brian Mulroney had reached an agreement on free trade with U.S. President Ronald Reagan, a deal which John Turner of the opposition Liberal Party refers to as the “Sale of Canada Act” and says is “a matter of [Canada’s] political and economic and cultural independence.” After weeks of tense campaigning, Mulroney’s Progressive Conservative Party wins the majority of seats in the legislature, clearing the way for passage of the agreement.

A year after it was signed by Reagan and Mulroney, the Canada-U.S. Free Trade Agreement (FTA) [PDF] enters into force with the goal of “chart[ing] a new course for the largest and most important trading relationship in the world.” The agreement aims to eliminate all trade barriers, including tariffs, between the two countries, as well as promote fair competition, liberalize investment conditions, and establish a mechanism to resolve trade disputes. Between 1989 and 1999, U.S. trade with Canada grows from roughly $167 billion to more than $362 billion [PDF].

Hemispheric free trade expands after the North American Free Trade Agreement (NAFTA) enters into effect, beginning a fifteen-year process of eliminating tariffs between the U.S., Canadian, and Mexican economies. The landmark agreement creates the world’s largest free trade bloc by gross domestic product (GDP) and aims to boost the three countries’ trade and economic integration. It also establishes rules to protect intellectual property, investment, workers’ rights, and the environment. Regional trade increases sharply over the following two decades, growing from approximately $290 billion in 1993 to more than $1 trillion in 2016. However, some critics [PDF] later say NAFTA contributed to job losses in Canada and resulted in the country’s increased dependence on the United States.

U.S. border officials at Port Angeles, Washington, detain Ahmed Ressam, a thirty-two-year-old Algerian, on suspicions his Canadian passport is false as he is trying to cross into the United States via ferry. A U.S.-Canadian investigation reveals Ressam had received training from al-Qaeda in Afghanistan, was part of a terrorist cell in Canada, and was planning to bomb the Los Angeles International Airport during millennium celebrations. The incident becomes known as the Millennium Plot and leads to heightened security measures along the U.S.-Canada border, including enhanced surveillance and the deployment of border enforcement teams.

A World Trade Organization (WTO) ruling finds the 1965 pact violates international trade rules, specifically the most-favored-nation clause, which in essence prevents discrimination in trade or other agreements. The ruling is based on a dispute brought by Japan and the European Union (EU) who allege that the pact favors Canadian subsidiaries of the so-called big three U.S. automakers—Chrysler, Ford, and General Motors—and grants them an unfair competitive advantage. Canada launches an appeal but it is unsuccessful, and the pact is abolished in 2001. During the nearly four decades the pact was in place, the U.S. and Canadian auto industries became deeply integrated, and the pact is credited with increasing employment, exports, and production.

Shortly after the terrorist attacks on the United States, Canadian authorities launch Operation Yellow Ribbon to accept diverted U.S.-bound international flights after the U.S. Federal Aviation Administration closes U.S. airspace and grounds all aircraft across the country. Canada also shuts down its airspace—the first time both countries have ever done so—leaving it open only for outgoing humanitarian, police, and military flights, as well as incoming U.S. flights. The small Canadian town of Gander in the province of Newfoundland soon becomes a major hub, accepting thirty-eight commercial flights, four military flights, and more than 6,500 passengers. In the aftermath of 9/11, Canada accepts a total of more than thirty-three thousand people on over two hundred U.S.-inbound flights, according to estimates, making Operation Yellow Ribbon the largest emergency operation of civilian aircraft in history.

The two countries sign a Safe Third Country Agreement, asserting that refugees must make an asylum claim in the first safe country they enter—either the United States or Canada—save for certain exceptions. Previously, many asylum seekers relied on entering Canada via the United States to make their claims for international protection. According to Canadian government data, approximately one-third [PDF] of all refugee claims in Canada between 1995 and 2001 were made by asylum seekers who first arrived in, or traveled through, the United States. The new agreement, which applies only to crossings at official ports of entry, is part of a broader binational Smart Border Action Plan which seeks to strengthen border security and more effectively manage cross-border migration flows in the wake of 9/11. (The agreement was updated in 2023 to apply to the entire shared border, including areas outside of official ports of entry.)

The U.S.-Canada Softwood Lumber Agreement (SLA) [PDF] expires after nine years, reviving a decadeslong trade dispute. The dispute dates back to 1982, when U.S. lumber producers argued they were at an unfair competitive advantage due to Canada’s timber pricing policies. Under the SLA, which ended the fourth so-called lumber war, the United States revoked anti-dumping and countervailing duties and returned some $4 billion in duties collected from imports. The SLA also applied quota restrictions on Canadian softwood lumber exported to the United States when the price of U.S. softwood lumber products fell below a certain level. After the agreement expires, the United States files a new countervailing duty petition in 2016, marking the start of the fifth dispute.

U.S. President Donald Trump announces his administration will impose 10 percent tariffs on aluminum imports and 25 percent tariffs on steel imports to protect U.S. aluminum and steel makers, as well as boost domestic production and job creation. The tariffs come nearly a year after the administration launched two investigations under Section 232 of the Trade Expansion Act of 1962, which allows the president to raise tariffs on certain goods for national security reasons. While Canada was originally exempt, Trump follows up with aluminum and steel tariffs on Canada, Mexico, and the EU in May after they fail to reach “satisfactory arrangements” that meet U.S. national security requirements. In response, Canada launches a dispute complaint at the WTO and implements retaliatory tariffs that take effect in July on nearly $13 billion worth of U.S. exports. In May 2019, the Trump administration lifts aluminum and steel tariffs on Canada as part of an agreement aimed at easing trade tensions and replacing NAFTA.

The U.S.-Mexico-Canada Agreement (USMCA) enters into force, replacing NAFTA as the principal trade deal underpinning North American economic integration. Trump had previously called NAFTA “the worst trade deal ever made,” blaming the agreement for bringing U.S. job losses in the auto and manufacturing sectors and increasing the U.S. trade deficit with Canada and Mexico. The new USMCA adopts several changes, including stricter rules of origin for North American automobiles and better labor protections, as well as expands U.S. farmers’ access to Canada’s dairy markets, reforms dispute resolution mechanisms, and sets up new guardrails for digital trade. By 2022, U.S. goods and services trade with the USMCA totaled an estimated nearly $2 trillion.

A White House executive order announces 25 percent tariffs on Canada and Mexico and 10 percent tariffs on China, the United States’ largest trading partners. The tariffs aim to address the “extraordinary threat posed by illegal aliens and drugs,” saying they constitute a national emergency under the International Emergency Economic Powers Act (IEEPA). The act gives the president expanded authority to regulate international commerce during an emergency, which Trump has declared with respect to immigration at the southern U.S. border. Trump later places a stay on tariffs for Canada and Mexico after they promise greater cooperation on combating migration and drug trafficking, but the tariffs go into effect on March 4. Canada responds with tariffs on more than $100 billion worth of U.S. goods, including coffee, wine, and motorcycles, leading to several more weeks of back-and-forth action.