Canada’s merchandise trade deficit widened in June to C$5.9 billion ($4.24 billion) as imports grew faster than exports, fueled by a significant one-time import of high-value oil equipment. This deficit is the second highest on record, following April’s historic peak at C$7.6 billion. Analysts, previously anticipating an expansion to C$6.3 billion, were surprised by the actual widening. June saw total imports rise by 1.4% to C$67.6 billion, with a notable exception of a U.S. oil equipment import. Excluding this one-off item, imports actually decreased by 1.9% in June. The month also witnessed a 0.9% surge in total exports, now reaching C$61.74 billion, driven primarily by increased crude oil exports, the price of which surged due to Middle East tensions. However, in terms of volume, exports experienced a 0.4% decline.
The [1] U.S. President’s tariff escalation on Canada, climbing to 35%, alongside sectoral tariffs on steel, aluminum, and automobiles, impacted the country’s trade relations. Despite these challenges, exports to the U.S. edged up by 3.1% in June due to crude oil shipments. In contrast, when compared to the same period last year, exports to the U.S. lingered 12.5% lower. Moreover, after a May peak, exports to non-U.S. countries plummeted by 4.1% in June, marking the first decrease since February. On the import side, a notable 2.6% rise was observed in imports from the U.S. in June, attributed to an oil project module, reversing three consecutive monthly declines. Recapping the data was Promit Mukherjee, with editing contributions from Dale Smith.
