Canada's trade surplus widens substantially in August

By Promit Mukherjee

OTTAWA, Oct 6 (Reuters) - Canada's trade surplus ‌widened substantially in August ​to C$4.2 ​billion ($2.94 billion), data showed on Tuesday, as exporters rushed to increase shipments to the US before President Donald Trump's new tariffs took effect.

Analysts polled by Reuters had forecast that the trade surplus would expand to C$1.55 billion ‌from an upwardly revised C$787 million.

As exporters shipped more to the US to beat the looming new 50% ⁠tariffs from the Trump administration, Canada's exports to the country surged 8.1% in August, while imports were down 2.5%, Statistics Canada reported.

This change helped Canada post a ‌trade surplus with the US of C$11.2 ‌billion, a 19-month high, lifting its share of exports to its biggest trading partner to almost 70% for the first time since September 2025.

Trump's new tariffs, which cover roughly $20 billion of Canadian exports to the US, came into effect on August 22.

Economists ​have said that September would show a more accurate impact of the new tariffs, which apply to a variety of products including wine, furniture, dairy products, cement, clothing, fishing rods and hockey equipment.

September will also show the impact of Canadian counter-tariffs on US ⁠imports and Trump's ban on some goods imports from Canada.

Canada's overall exports increased by 2.5% in August to C$77.91 billion, after falling by 2.6% in the prior month. Exports ​of energy products — refined petroleum products and crude oil — posted the biggest overall gain and increased by 4.7% to C$19.03 billion.

Exports of refined petroleum energy products were up 17.4%, driven by a rise in ​diesel exports to Peru, the United Kingdom, the US and the Netherlands.

Economists ‌said that in light of refinery outages due to the continuing Russia-Ukraine war and the Middle East crisis, exports of diesel could boost Canadian trade surplus once again in September.

"My general assumption is that diesel exports ⁠might be able to offset some of the impact of new tariffs in September," said Prince Owusu, senior economist with Export Development Canada, a federal export promotion company, adding that Canada has a unique opportunity to ship more refined products to the US and counterbalance the impact new tariffs.

A stronger ⁠Canadian dollar also affected the value of exports.

Excluding energy products, exports were up 1.8%. In volume terms, total exports rose 2.5%, StatsCan said.

Exports of consumer ​goods were up 6.6%, industrial machinery, equipment and parts were up 10.1% and electronic and electrical equipment and parts increased 11.0% in August, the statistics agency said.

Imports were down 2% to C$73.71 billion, with imports of motor vehicles and parts posting the largest decline in August.

As Canada negotiated waves of tariffs ‌across some crucial sectors such as steel, aluminum, autos and lumber for almost 18 months, its export dependence on the US had shrunk while exports to the rest of the world rose as ‌it sought to diversify its trade partners.

After increasing 8.2% in July, exports to countries other than the US fell 8.5% in August, and imports decreased. ⁠Its trade deficit with countries other than the US ‌widened to C$7.0 billion in August from ​C$5.3 billion in July, StatsCan said.

The Canadian dollar strengthened after the trade data, with the currency trading up 0.05% to C$1.4250 to the US dollar, or 70.18 US cents.

(Reporting by Promit Mukherjee; Editing by Paul Simao ‌and Mark Porter)

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