Canada's July Trade Deficit Narrows with Boost in Oil and Car Exports
Canada's trade deficit narrowed in July, driven by increased exports of crude oil and passenger cars, primarily to the United States. Despite this improvement, exports remain below previous year levels, current tariff impacts persist, and smaller companies struggle. Economic data indicates slow recovery, with potential implications for future interest rate cuts.
Canada's trade deficit saw a notable narrowing in July, primarily attributed to a rise in exports of crude oil and passenger cars directed towards its largest trading partner, the United States, as per Statistics Canada.
The merchandise trade deficit stood at C$4.94 billion, a decrease from the previous month's C$5.98 billion but still significantly higher than the same period last year. This marks the sixth consecutive trade deficit since U.S. President Donald Trump imposed tariffs on Canada.
Despite a 5% increase in exports to the U.S., year-on-year figures show exports are still down over 10%. Meanwhile, import levels from the U.S. decreased by 2.2% in July. Economists note that while there's been a bounce back in energy and auto exports, the overall trend hasn't fully reversed. Smaller businesses outside major trade exemptions continue to face challenges under the USMCA, and future economic indicators may influence monetary policy decisions.
(With inputs from agencies.)
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