Canada’s trade deficit expanded to $6.32 billion in August as exports saw a sharper decline in both value and volume compared to the increase in imports for the month, according to official government data released on Tuesday.
The trade deficit in August was driven by decreased exports not only to the U.S., Canada’s primary trading partner, but also to other global destinations during the month.
Earlier in the year, Canada faced challenges in international trade due to sectoral tariffs imposed by U.S. President Donald Trump, leading to disruptions in supply chains from its largest trading partner. However, the impact has been inconsistent and unpredictable.
Analysts had anticipated an August trade deficit of $5.55 billion, up from $3.82 billion in the previous month, according to a Reuters poll.
Statistics Canada reported a three percent decrease in total exports while imports rose by 0.9 percent in August.
Exports to the U.S. in August amounted to $44.18 billion, down 3.4 percent from July, with declines primarily driven by unwrought gold exports. Various product categories, including lumber, machinery, and equipment, also contributed to the export decrease.
The share of Canada’s exports to the U.S. has been fluctuating but gradually declining, dropping below 70 percent a few months ago before recovering to 73 percent in August, compared to 75 percent in the same period last year.
Prime Minister Mark Carney is scheduled to meet with President Trump on Tuesday to address the impacts of U.S. tariffs on key sectors like steel, automobiles, and lumber. However, experts caution against expectations of a significant agreement.
Imports from the U.S. decreased by 1.4 percent in August on a monthly basis, resulting in a reduced total trade surplus with the U.S. from $7.42 billion in July to $6.43 billion in August.
Exports to countries other than the U.S. experienced a two percent decline in August, marking the third consecutive monthly decrease, with reduced exports of crude oil and nuclear fuel being major contributors to the decline.
Conversely, imports from countries outside the U.S. surged by 4.2 percent in August, reaching a record high, leading to a record trade deficit of $12.8 billion with non-U.S. countries in August, up from $11.2 billion in July.
