Canada's Record Trade Deficit: Trump's Tariffs and Declining U.S. Exports
Canada's trade deficit hit an all-time high in April due to reduced U.S. demand following tariffs imposed by President Trump. While exports to the rest of the world rose slightly, they couldn't offset the significant drop in U.S.-bound exports, exacerbated by lower crude oil prices and a stronger Canadian dollar.
In April, Canada's trade deficit soared to a record C$7.1 billion, attributed largely to diminished demand from the U.S. after tariffs from President Donald Trump took effect. Although exports to other global markets increased, they were insufficient to counterbalance the substantial decline in U.S.-bound exports.
Data from Statistics Canada revealed a 15.7% decrease in exports to the U.S. in April, marking a third consecutive monthly drop. The trade imbalance widened beyond analysts' expectations and was aggravated by depressed crude oil prices and a strengthened Canadian dollar.
Deputy Chief Economist at Export Development Canada, Ross Prusakowski, highlighted the ongoing challenges facing Canadian exporters. Despite a slight increase in global exports, the sharp decline in motor vehicle exports was particularly impactful. Imports also fell, diminishing Canada's merchandise trade surplus with the U.S. to its lowest since December 2020.
(With inputs from agencies.)
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