All Canadians know that we are closely tied in economic and political terms to our North American neighbors. In fact, recent figures show that almost 85% of Canadian exports go to the US, while over 50% of the goods that Canada imports come from the US. Of course, when it comes to exports, it is lumber and oil that remains king for Canada.
This close relationship means that most Canadian businesses will trade and interact with US-based ones on a regular basis. But what are the most common issues that many face when dealing with US companies?
Both the US and Canadian dollar are globally recognized currencies present on the world’s forex market. One challenge for any Canadian business trading with a US one can be the impact of the exchange rate on their bottom line. If the price of the USD/CAD currency pair rises, then the number of Canadian dollars you would get for any US ones could drop, for example. If you have been paid by a US supplier or business in US dollars, then this could see you make less money when it is exchanged into Canadian ones. Many businesses in the country keep an eye on the USDCAD chart to decide when it is best to exchange money or what the current rate is for budgeting.
Although this has improved somewhat in recent years, many people in the US can see Canada as a sort of little brother or sister. This can often see some US businesses adopt a high-handed attitude when dealing with Canadian business entities. Some Canadian organizations may notice this when trading financially with those in the US and find it a challenge. If you do run into this problem, the best approach is to remain professional and show them the error of their ways by offering an outstanding service.
Cross-border trading regulations
Another challenge that some face when dealing with US suppliers or customers are the arrangements around cross-border trade. As so much trade between the two countries happens, this is likely to crop up at some point!
The regulations in this area have been renegotiated in recent times under the USMCA agreement. It is key to know what your responsibilities are here to make sure that any deliveries are not held up at the border. With laws changing rapidly sometimes, this is not always easy! Tied in with this is the issue of taxes and tariffs on imports into the US from Canada. Some sectors have seen these rise in recent years, which has proved challenging to some businesses.
Canada continues to thrive
Although there are undoubtedly challenges to doing business with any US organization, as above, Canadian companies continue to overcome them. With so much trade happening between the US and Canada each year, it is easy to see why both countries are eager for this to carry on.