Canada’s trade deficit in August expanded to $6.32 billion, driven by a decline in exports surpassing the increase in imports, according to official government data released on Tuesday. The decrease in exports affected not only shipments to the U.S., Canada’s primary trading partner, but also exports to other countries.
Earlier this year, Canada’s international trade was impacted by sectoral tariffs imposed by U.S. President Donald Trump, prompting businesses to restructure their supply chains away from the U.S. This shift has been unpredictable and volatile.
Analysts, surveyed by Reuters, had predicted a trade deficit of $5.55 billion for August, up from $3.82 billion in the previous month. Statistics Canada reported a 3% decline in total exports and a 0.9% increase in imports for the month.
Exports to the U.S. totaled $44.18 billion in August, a 3.4% decrease from July. The decline was primarily driven by unwrought gold exports, along with reductions in lumber, machinery, and equipment shipments. Canada’s share of exports to the U.S. has been fluctuating but gradually decreasing, standing at 73% in August compared to 75% in the same period last year.
Prime Minister Mark Carney is set to meet with President Trump to discuss the impact of U.S. tariffs on key sectors like steel, cars, and lumber. However, experts caution against expecting a significant agreement.
Imports from the U.S. fell by 1.4% in August, reducing the trade surplus with the U.S. to $6.43 billion from $7.42 billion in July. Exports to countries other than the U.S. dropped by 2% in August, with lower exports of crude oil and nuclear fuel contributing to the decline. Meanwhile, imports from countries outside the U.S. surged by 4.2%, reaching a record high in August, leading to a record trade deficit of $12.8 billion with non-U.S. countries.