Canada's Trade Deficit Narrowing Amidst Export Surge

In July, Canada's trade deficit narrowed significantly as exports increased, primarily driven by the shipment of crude oil and passenger cars to the United States. Statistics Canada reported a merchandise trade deficit of C$4.94 billion, improved from the previous month's C$5.98 billion, though higher than a year earlier.

Economists' projections had placed the expected deficit at a slightly lower C$4.75 billion, marking the sixth consecutive deficit since U.S. imposed tariffs under President Donald Trump's administration. Nonetheless, it signifies a recovery from the record high of C$7.6 billion in April.

Despite Trump's tariffs prompting businesses to adjust supply chains, 76% of Canada's total goods exports went to the U.S. last year, climbing for three consecutive months. July's exports rose by 0.9% to C$61.86 billion, while imports fell by 0.7% to C$66.80 billion. Energy product exports saw the largest increase, while aluminum exports fell sharply under 50% tariffs.

(With inputs from agencies.)