Canada Trade Surplus Shrinks Ahead of New US Tariffs

Canada's trade surplus narrowed significantly in July to C$769 million ($557 million), down from a four-year high of C$4.2 billion in June, according to Statistics Canada. This decline comes just weeks before Washington's new 50% tariffs begin to show up in statistics.

The drop in exports was mainly due to a decrease in energy and metal products, which together contributed more than 40% of total exports. These products fell by 4.4% in July, with crude oil exports decreasing by 5.5%. Exports of aircraft and other transportation equipment and parts increased by 34.9%, partially offsetting the decline.

The trade surplus was lower than economists' forecasted C$3.57 billion for July. The U.S. accounted for 66.35% of Canada's total exports in July, down from 69.39% in June and 72.64% a year ago. However, Canada's import dependence on the U.S. has narrowed to 59% over the last 12 months compared to 62% in 2024.

Stuart Bergman, chief economist at Export Development Canada, said that keeping the share of Canada's exports going to the U.S. below 70% is an encouraging trend. He noted that there have been concerted efforts to shift some exports to other markets, citing the increase in agricultural exports, especially canola to China and Japan.

The Canadian dollar was trading firmer at C$1.3792 against the U.S. dollar or 72.51 U.S. cents, up 0.35% from the previous day.