Canada’s trade surplus narrows as imports rise faster than exports

Statistics Canada announced that the country’s merchandise imports rose 4.2% in July while exports increased 0.6%. As a result, Canada’s merchandise trade surplus narrowed from $2.6 billion in June to $778 million in July.

Total imports reached a record high of $53.0 billion, up in 9 of 11 product sections. Motor vehicles and parts (+21.1%) accounted for more than two-thirds of the increase in total imports in July. Imports of electronic and electrical equipment and parts (+8.5%) also contributed to the increase in July. The decrease in imports of consumer goods (-5.3%) partially offset these increases in July. Imports of pharmaceutical products (-15.8%) contributed the most to this decline.

Total exports rose to $53.7 billion in July, Increases in a number of different product sections were partially offset by a sharp decline in lumber exports. Exports of motor vehicles and parts (+6.4%) posted the largest increase in July. The rise in exports of energy products (+1.9%) also contributed to the growth in July. Several other product sections contributed to the growth in total exports such as electronic and electrical equipment and parts (+7.9%); aircraft and other transportation equipment and parts (+8.3%); basic and industrial chemical, plastic and rubber products (+4.5%); industrial machinery, equipment and parts (+4.5%); and consumer goods (+2.0%). The increases observed in these other product sections were almost entirely offset by the decrease in exports of forestry products and building and packaging materials (-12.7%).

Imports from countries other than the United States decreased 2.6% in July, down for the second consecutive month and exports to those countries were down 7.6% with sharp decreases in exports to China (copper ore, canola and iron ore) and Hong Kong (gold). Canada’s trade deficit with countries other than the United States widened from $5.3 billion in June to $5.9 billion in July.

Imports from the United States increased 8.4% in July to a record high of $34.1 billion. Exports to the United States rose 3.6% to $40.8 billion, which was also a record high. Both increases were mainly attributable to growth in the trade of motor vehicles and parts. Canada’s trade surplus with the United States narrowed from $7.9 billion in June to $6.7 billion in July.

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