Canada experienced a narrowing trade deficit of $506 million in March, surprising analysts who expected it to widen. This was attributed to a 1.5% drop in imports, particularly from the U.S., following retaliatory tariffs imposed by Canada against Trump's steel and aluminum tariffs. Exports also decreased by 6.6% to the U.S., but gains in exports to other countries offset some losses. Overall, although exports fell for the second consecutive month, they remained significantly higher compared to the previous year, revealing complexities in the trade dynamics influenced by tariffs.
Exports to the U.S. also dropped by 6.6 per cent but was almost compensated by an increase in exports to the rest of the world, Statistics Canada said.
The U.S. is Canada's biggest trading partner and Trump's tariffs have hurt trade, investments and jobs on both sides of the border.
Despite the two consecutive monthly declines, export levels remained relatively high in March, posting a 10.2 per cent increase compared with the same month a year earlier.
Imports fell in both value and volume terms. They dropped for the first time in five months, with the largest contributors being metal and non-metallic mineral products.
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