Canada’s merchandise trade deficit widened to C$6.32 billion in August, more than market expectations and reflecting a larger drop in exports than a small increase in imports. Exports fell 3%, while imports rose 0.9%, according to StatsCan.
The decline in exports was not only to the United States, Canada’s top trading partner, but also to the rest of the world. Exports to the US fell 3.4% to C$44.18 billion, mainly due to lower exports of raw gold, sawn timber, machinery and equipment.
Canada’s share of exports to the US remained volatile, recovering slightly to 73%, but still lower than 75% a year ago. At the same time, imports from the US fell 1.4%, narrowing the bilateral trade surplus to C$6.43 billion.
Exports to countries other than the US fell 2% in August, the third consecutive month of declines. In contrast, imports from other markets rose 4.2%, pushing the non-US trade deficit to a record C$12.8 billion.
Prime Minister Mark Carney is scheduled to meet with President Trump to discuss the impact of tariffs on key sectors such as steel and automotive. But analysts expect no major breakthrough in the short-term negotiations, with Canada's trade deficit expected to remain high for the foreseeable future.
