Canada’s trade surplus in August significantly expanded to $4.2 billion, driven by a surge in exports to the U.S. before the implementation of new tariffs by President Donald Trump. Analysts had predicted a rise to $1.55 billion from the revised $787 million. Canada’s exports to the U.S. rose by 8.1% while imports from the U.S. declined by 2.5%, resulting in a trade surplus of $11.2 billion with the U.S., the highest in 19 months. This boosted Canada’s share of exports to its largest trading partner to nearly 70%, a level not seen since September 2025.
The new tariffs imposed by Trump on around $20 billion worth of Canadian exports came into effect on August 22. Economists anticipate that September will provide a clearer picture of the impact of these tariffs, which cover various items like wine, furniture, dairy products, cement, clothing, fishing gear, and hockey equipment. September will also reveal the effects of Canadian counter-tariffs on U.S. imports and Trump’s restrictions on certain Canadian goods.
Overall exports from Canada increased by 2.5% in August to reach $77.91 billion, rebounding from a 2.6% decline in the previous month. The export growth was primarily driven by energy products, with refined petroleum products and crude oil exports rising by 4.7% to $19.03 billion. Exports excluding energy products also saw a rise of 1.8% in August. In terms of volume, total exports grew by 2.5%.
Notably, consumer goods exports increased by 6.6%, while industrial machinery, equipment, and parts saw a 10.1% surge, and electronic equipment and parts rose by 11% in August. On the import side, there was a 2% decline to $73.71 billion, with motor vehicles and parts showing the largest decrease.
Despite facing tariffs in sectors like steel, aluminum, autos, and lumber for almost a year and a half, Canada has been diversifying its trade partners to reduce its reliance on the U.S. After an 8.2% rise in July, exports to countries other than the U.S. dropped by 8.5% in August. Canada’s trade deficit with non-U.S. countries widened to $7 billion in August from $5.3 billion in July.
Following the release of the trade data, the Canadian dollar strengthened slightly, trading at $1.4250 to the U.S. dollar, equivalent to 70.18 U.S. cents.