Canada Trade Surplus Much Lower Than Expected

Canada recorded a trade surplus of C$770 million in July of 2026, narrowing sharply from the C$4.2 billion in June, marking the first slowdown in four months and well below market expectations of a C$3.6 billion surplus. Imports rose 2.2% to C$75.4 billion, driven by higher purchases of motor vehicles and parts (11.4%), passanger cars and light trucks (19.8%), non-ferrous metals and non-ferrous metal alloys (49.7%), particularly copper anodes from Chile, and higher purchases of gold from US residents in Canada. Exports declined 2.3% to C$76.1 billion, driven by lower shipments of metal and non-metallic mineral products (-8.5%) and energy products (-4.4%), reflecting a shortfall of crude oil (-5.6%) and natural gas (-14%). The decline was partially offset by higher shipments of aircraft and other transportation equipment and parts (34.9%). Meanwhile, exports to the US fell by 6.6%, the sharpest decline since April 2025, while increasing for the Netherlands, China and Germany.

Canada recorded a trade surplus of C$3.86 billion in June of 2026, widening from the C$3.7 billion in May to mark the largest surplus in over four years. Exports rose by 0.4% from the previous month to a record high of C$77.5 billion. Sales rose sharply for metal and non-metallic products (16.5% to C$15.02 billion) amid a 27.9% surge in sales of gold, mostly to the UK. Sales of metal ores and non-metallic minerals rose by 17.3% to C$3.14 billion with support from copper ores. These offset the 10% plunge in energy products (to C$18.37 billion) as the momentary respite in the Middle East war had lowered energy prices. Meanwhile, imports rose by 0.2% to a record of C$73.6 billion with drops in industrial machinery, equipment, and parts (-3.3% to C$7.6 billion) and metal ores and non-metallic minerals (-3.4% to C$2.81 billion). The depreciation of the Canadian dollar in the period lifted trade turnover expressed in the loonie, contributing to the rise in both imports and exports.

Canada faces the threat of steep new U.S. trade measures after the Trump administration on Monday announced plans to impose a 50% tariff on Canadian imports starting in 30 days, accusing Ottawa of discriminating against U.S. exports, including alcohol, automobiles, and dairy products. The White House said the tariffs would cover a broad range of goods, from hockey sticks to cement, and would also apply to products covered under the U.S.-Mexico-Canada Agreement (USMCA) that had been exempt from previous tariff actions. Only a limited number of products would be spared, including energy, critical minerals, potash, fish, and goods already subject to sector-specific Section 232 tariffs. The move marks a significant escalation in trade tensions between the two neighboring economies and could disrupt cross-border supply chains if implemented.