![\"\"](\"https:\/\/i.cbc.ca\/ais\/2870cee6-2179-4c8b-bec8-18301d9aa00f,1753302942255\/full\/max\/0\/default.jpg?im=Crop%2Crect%3D%280%2C0%2C1920%2C1080%29%3BResize%3D620\")
<\/p>\nCanada’s trade deficit\u00a0narrowed in July as overall exports rose, especially driven by\u00a0outbound shipments of crude oil and passenger cars to its\u00a0biggest trading partner the United States, Statistics Canada\u00a0said on Thursday.<\/p>\n
Its merchandise trade deficit, or deficit from trading in\u00a0goods, in July was at $4.94 billion, smaller\u00a0than last month’s $5.98 billion, but much higher than the same\u00a0period last year, according to Statistics Canada’s data.<\/p>\n
Overall exports rose by 0.9 per cent\u00a0to $61.86 billion in July\u00a0while imports slowed 0.7 per cent\u00a0to $66.8\u00a0billion, the agency said.<\/p>\n
Analysts polled by Reuters had forecast the trade deficit\u00a0for July at $4.75 billion.<\/p>\n
This was the sixth consecutive trade deficit since U.S.\u00a0President Donald Trump imposed tariffs on Canada, but it has\u00a0been improving from an all-time record deficit of $7.6 billion\u00a0observed in April.<\/p>\n
Trump’s threats and subsequent tariffs on imports from\u00a0Canada have\u00a0forced many businesses to alter their supply chains\u00a0and seek markets elsewhere. This has disturbed the trade balance between the two countries, pushing Canada into a trade deficit.<\/p>\n
But exports to the U.S., which was the destination for 76 per cent of Canada’s total goods exports last year, have been on an\u00a0upswing for the last three months on a monthly basis.<\/p>\n
More exports of energy, vehicles<\/p>\n
Canada\u00a0exported more crude oil and \u00a0passenger cars to the\u00a0U.S. in July, pushing its exports up five\u00a0per cent. But on a year-on-year\u00a0basis, exports south of the border were still down more than10 per cent.<\/p>\n
Exports of energy products specifically posted an increase in\u00a0July of 4.2 per cent\u00a0and exports of motor vehicles and parts increased\u00a06.6 per cent, StatsCan said, adding that lower exports of metal and\u00a0non-metallic mineral products partially offset the overall\u00a0increase in exports in July. Exports of\u00a0aluminum and steel \u2014 which both have 50 per cent tariffs \u2014\u00a0dropped a respective 30 per cent and 25 per cent in July.<\/p>\n
The July statistics weren’t “as bad as feared,” said Shelly Kaushik, senior economist at BMO\u00a0Capital Markets, despite recent trade blows, especially to specific industries.<\/p>\n
\u00a0“The economy is doing fairly well. It’s just there are specific sectors that are quite heavily impacted by this trade war,” she told CBC News. “And I think that is what we’re seeing in the trade data, but also in the broader economic data writ large.”<\/p>\n
However, economists cautioned that exports haven’t fully\u00a0recovered.\u00a0<\/p>\n
“We haven’t completely reversed the trend yet,” said Ross\u00a0Prusakowski, deputy chief economist at Export Development Canada, adding that the\u00a0bounce in energy and autos was due to the significant lows seen\u00a0in the previous months.\u00a0<\/p>\n
Exports to the U.S. are down 2.9 per cent\u00a0in the first seven months\u00a0of this year compared with the same period in 2024. And exports\u00a0to rest of the world are up 14 per cent, he said.\u00a0<\/p>\n
Prusakowski said the knock-on effects of tariffs are still\u00a0playing out and will be seen in economic data in the coming\u00a0months.\u00a0<\/p>\n
WATCH |\u00a0Is Canada-U.S. free trade dead?:<\/p>\n
Is Canada-US free trade dead? | About That<\/p>\n
North American free trade is teetering on the edge of uncertainty as U.S. President Donald Trump’s tariffs continue to complicate how goods come and go. Andrew Chang explores signs that free trade \u2014 as we’ve come to know it \u2014 is on its way out, and challenges that may lie ahead in renegotiating the Canada-U.S.-Mexico Agreement (CUSMA). <\/p>\n
Images provided by Getty Images, The Canadian Press and Reuters.<\/p>\n
Exports to countries other than the United States were down\u00a08.6 per cent\u00a0in July\u00a0\u2014 a second consecutive monthly decline \u2014 and imports\u00a0from countries excluding the U.S. increased 1.3 per cent.<\/p>\n
On the flip side, imports from the U.S. continued to fall and dropped\u00a02.2 per cent\u00a0in July.<\/p>\n
The Canadian dollar was trading down 0.21 per cent\u00a0(worth 72.34 U.S. cents)\u00a0after the trade data\u00a0was released. Bond yields on the government’s two-year bonds\u00a0improved and were down 0.1 basis point at 2.61 per cent.<\/p>\n
The recent GDP data, which showed that the economy\u00a0contracted by 1.6 per cent, has led money markets to bet that a rate cut by the central bank is coming. Markets are now betting on an almost 70 per cent chance of a rate cut on Sept. 17.<\/p>\n","protected":false},"excerpt":{"rendered":"Canada’s trade deficit\u00a0narrowed in July as overall exports rose, especially driven by\u00a0outbound shipments of crude oil and passenger…\n","protected":false},"author":2,"featured_media":133084,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,101],"class_list":["post-133083","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/133083","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=133083"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/133083\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/133084"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=133083"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=133083"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=133083"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}