Canada’s trade deficit expanded in August to $6.32 billion as exports decreased more significantly than imports on a monthly basis, according to recent government data. The decline was not only seen in exports to the U.S., Canada’s top trading partner, but also in shipments to other countries.
Earlier this year, Canada faced challenges in international trade due to sectoral tariffs imposed by U.S. President Donald Trump. This led to disruptions in supply chains with the country’s largest trading partner. Despite efforts to readjust, the trade situation has been unstable.
Analysts had predicted an August trade deficit of $5.55 billion, up from $3.82 billion in the previous month. Total exports fell by three percent, while imports rose by 0.9 percent, as reported by Statistics Canada.
In August, exports to the U.S. declined to $44.18 billion, with unwrought gold exports leading the drop. Other products like lumber and machinery also contributed to the decrease. Canada’s share of exports to the U.S. has been fluctuating, dropping below 70 percent a few months ago but recovering to 73 percent in August compared to 75 percent a year earlier.
Prime Minister Mark Carney is scheduled to meet with President Trump to address the impacts of tariffs on key sectors like steel, cars, and lumber. However, experts are skeptical about the likelihood of a significant agreement.
Imports from the U.S. decreased by 1.4 percent in August, reducing the trade surplus with the U.S. to $6.43 billion from $7.42 billion in July. Exports to countries other than the U.S. also fell by two percent in August, marking a third consecutive monthly decline. Notably, lower exports of crude oil and nuclear fuel were major contributors to the decrease.
On the other hand, imports from countries outside the U.S. increased by 4.2 percent, hitting a record high in August. This surge in imports raised Canada’s trade deficit with non-U.S. countries to a record $12.8 billion in August, up from $11.2 billion in July.