CONTINENTAL COMPLEXITY

While the US economy is 13x larger than Canada’s, because the two economies have become increasingly integrated — starting with the Auto Pact in 1965, CUSFTA in 1988, and NAFTA — these decades of increasing free trade have resulted in substantial national manufacturing specialization and reduced overlap. Canada isn’t a miniature US. Quickly replacing 60% of aluminum, almost all spruce-pine-lumber and 70% of oil refined in the US Midwest will hurt.