Canada’s trade deficit narrows as exports rise, imports decline

Investing.com -- Canada’s merchandise trade deficit with the world narrowed from a record $7.6 billion in April to $5.9 billion in May, as exports increased and imports fell, according to Statistics Canada data released Thursday.

Merchandise exports rose 1.1% in May, marking the first increase in four months. The growth was primarily driven by a 15.1% surge in exports of metal and non-metallic mineral products, particularly unwrought gold. Exports of unwrought gold, silver and platinum group metals increased by 30.1% to reach a record $5.9 billion, largely due to higher physical shipments of gold to the United Kingdom (TADAWUL:4280).

Meanwhile, imports decreased by 1.6%, representing the third consecutive monthly decline. The decrease was led by a 16.8% drop in imports of metal and non-metallic mineral products, primarily due to lower imports of unwrought gold, silver, and platinum group metals, which fell by 43.2%.

Exports to the United States decreased by 0.9% in May, the fourth consecutive monthly decline. This trend coincides with the recent implementation of tariffs on Canadian goods by the United States. Canada’s share of exports to the United States was 68.3% in May, one of the lowest proportions on record, compared to a monthly average of 75.9% in 2024.

In contrast, exports to countries other than the United States rose by 5.7% to reach a record high, with increased shipments to the United Kingdom, Singapore, and Italy. This growth was partially offset by lower exports to China.

The merchandise trade surplus with the United States widened slightly from $3.1 billion in April to $3.2 billion in May, while the trade deficit with other countries narrowed from $10.7 billion to $9.1 billion.

In the energy sector, exports of energy products decreased by 5.6% in May, with declines observed across all subcategories. Crude oil exports fell by 4.0%, affected by both lower prices and volumes.

Consumer goods exports increased by 2.6%, driven by higher meat product exports to Japan and a rebound in prepared and packaged seafood products. However, consumer goods exports remained 18.5% below the high observed in January.

When combining international trade in goods and services, Canada’s total trade deficit with the world decreased from $8.0 billion in April to $6.6 billion in May.

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