Canada’s trade surplus narrowed sharply in July as exports fell and imports rose, fresh figures showed, offering an early indication of the pressure facing the country’s exporters amid an escalating dispute with the United States.
Statistics Canada said the surplus fell to C$769 million, down from C$4.2 billion in June. Economists polled by Reuters had expected a surplus of about C$3.57 billion.
Exports dropped 2.3 per cent to C$76.14 billion, while imports rose 2.2 per cent to C$75.37 billion. The decline in exports was led by energy products and metal and non-metallic mineral products.
Energy exports, which account for almost a quarter of Canada’s total exports, fell 4.4 per cent in July. Crude oil exports declined 5.5 per cent as both prices and volumes weakened, according to the statistics agency.
Exports of metal and non-metallic mineral products fell 8.5 per cent, reversing much of the strong increase recorded in the previous month. Higher exports of aircraft and other transport equipment, which surged by 34.9 per cent, provided some offset.
Imports rose for a sixth consecutive month, driven in part by an 11.4 per cent increase in motor vehicles and parts, mainly from the United States.
Canada’s exports to the US fell 6.6 per cent in July, while imports from its largest trading partner increased by 1.8 per cent. That reduced Canada’s trade surplus with the US by more than 40 per cent to C$5.9 billion.
Exports to countries outside the US increased by 7.4 per cent, while imports from those markets rose 2.8 per cent. Canada consequently recorded a non-US trade deficit of C$5.1 billion, narrower than the C$6.1 billion deficit recorded in June.
The figures cover July, before the latest US tariffs began to feed fully into trade data. Washington imposed additional 50 per cent duties on a range of Canadian goods from August 22, adding to the uncertainty for businesses on both sides of the border.
The United States accounted for 66.35 per cent of Canada’s total exports in July, down from 69.39 per cent in June and 72.64 per cent a year earlier. The figures underline Ottawa’s efforts to reduce its dependence on the US market while the two countries remain locked in a deepening trade dispute.
