S. economy. What it does is allow Canada to sell more fuel to the United States. Moreover, American firms trade more with Canada as they begin to ramp up their economy. These trends mirror the trends with the Mexican economy as well, that country being another key supplier of both energy and general trade to the U.S.
In 2008, we can see higher fuel costs impact both economies. Canada's GDP increased 8.1% as a result of higher prices paid for its energy. By contrast, higher fuel prices forced U.S. businesses to slow down their pace of growth, and the nation recorded relatively soft GDP growth as a result. The slowing demand in the U.S. reduced Canada's energy output, but the higher prices compensated for that (Scotton, 2008).
Overall, the United States has seen strong growth in GDP over the past five years. This reflects a trend of strong growth that only recently began to slow down. Its main trading partner and energy source Canada, saw similarly strong growth, but with year-over-year differences that relate to the nature of energy trade between the two countries.
From the U.S. perspective, their dependence on energy has had a noticeable affect on...
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