OTTAWA – Canada’s merchandise trade deficit narrowed in July as overall exports rose, driven by increased outbound shipments of crude oil and passenger cars to its largest trading partner, the United States, according to data from Statistics Canada released on Thursday.
The deficit from goods trading was $4.94 billion in July, which is smaller than the previous month’s deficit of $5.98 billion, but significantly higher than the same period last year. Overall exports saw a 0.9 per cent increase to $61.86 billion in July, while imports decreased by 0.7 per cent to $66.8 billion.
This marks the sixth consecutive month of a trade deficit since the U.S. imposed tariffs on Canada. However, the deficit has been improving since the record high of $7.6 billion observed in April.
The U.S. tariffs and threats have forced many Canadian businesses to adjust their supply chains and seek out new markets. Despite this, exports to the U.S.—which accounted for 76 per cent of Canada’s total goods exports last year—have been on an upswing for the last three months on a monthly basis. Specifically, Canada exported more crude oil and passenger cars to the U.S. in July, leading to a five per cent increase in exports to that country. On a year-on-year basis, however, exports to the U.S. are still down more than 10 per cent. Conversely, imports from the U.S. continued their decline, dropping 2.2 per cent in July.
