Canada’s trade deficit in August expanded to $6.32 billion due to a faster decline in exports compared to the increase in imports, according to official government data released on Tuesday. The deficit was driven by reduced exports not only to the U.S., Canada’s main trading partner, but also to other countries.
Earlier this year, Canada’s trade suffered from sectoral tariffs imposed by U.S. President Donald Trump, prompting companies to adjust their supply chains away from the U.S. However, this shift has been inconsistent and unpredictable.
Analysts had predicted the August trade deficit to reach $5.55 billion, up from $3.82 billion in the previous month. Total exports decreased by three percent, while imports rose by 0.9 percent, as reported by Statistics Canada.
Exports to the U.S. in August amounted to $44.18 billion, a 3.4 percent drop from July, primarily driven by lower unwrought gold exports. Other categories such as lumber, machinery, and equipment also contributed to the decline.
Canada’s export share to the U.S. has been fluctuating but has gradually decreased. It dipped below 70 percent a few months back but rebounded to 73 percent in August, down from 75 percent in the same period last year.
Prime Minister Mark Carney is set to meet with President Trump to discuss the impact of U.S. 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. dropped by 1.4 percent in August, reducing the trade surplus with the U.S. to $6.43 billion from $7.42 billion in July. Meanwhile, exports to countries other than the U.S. decreased by two percent for the third consecutive month, with lower exports of crude oil and nuclear fuel being major contributors to the decline.
On the other hand, imports from countries outside the U.S. surged by 4.2 percent in August, reaching a new high. This increase pushed Canada’s trade deficit with non-U.S. countries to a record $12.8 billion in August, up from $11.2 billion in July.
