Canadian trade deficit more than doubles in April

Thursday, 04 June 2020 19:37:58 (GMT+3)   |   San Diego
       

According to Statistics Canada, in April, production shutdowns in a number of manufacturing industries, falling energy product prices, the closure of many retail stores, and weaker demand due to physical distancing measures related to the COVID-19 pandemic, resulted in drastic decreases in Canada's exports and imports.

Exports fell 29.7 percent to $32.7 billion in April, the lowest level in more than 10 years. Imports were down 25.1 percent to $35.9 billion, a value not seen since February 2011. These declines, in both absolute value and percentage, are unparalleled, as monthly decreases of this magnitude have never been observed, Statistics Canada said.

Canada's merchandise trade deficit with the world widened from $1.5 billion in March to $3.3 billion in April. Despite this increase, it is important to note that trade deficits of more than $3 billion are not uncommon, most recently occurring in February 2019 (deficit of $3.4 billion).

In real (or volume) terms, exports were down 19.9 percent in April and imports fell 24.8 percent.

While total trade declined $25.8 billion in April, total trade with the United States fell $23.4 billion, representing more than 90 percent of the decrease in Canada's trade activity in April. The impact of COVID-19 on the Canadian and American auto manufacturing and energy product industries—which are heavily integrated—accounted for most of the decline observed in trade with the United States.

Exports to the United States fell 35.7 percent, while imports were down 35.3 percent. As a result, Canada's trade surplus with the United States narrowed from $3.5 billion in March to $2.2 billion in April.

Exports to countries other than the United States decreased 11.7 percent in April. The strongest declines were in exports to Germany, the United Kingdom and Mexico. Imports from non-US countries were down 6.3 percent, primarily due to lower imports of motor vehicles and parts from Mexico, Japan and Germany. Following significant declines earlier this year, imports from China (+30.8 percent) rebounded in April, mainly on higher imports of computers and peripherals as well as textiles (face masks).

As a result, Canada's trade deficit with countries other than the United States widened from $5.1 billion in March to $5.4 billion in April.


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