Canadian trade deficit narrows to $114 million in July

Wednesday, 05 September 2018 20:34:03 (GMT+3)   |   San Diego
       

According to Statistics Canada, Canada's merchandise trade deficit with the world narrowed from $743 million in June to $114 million in July, the smallest deficit since the most recent surplus in December 2016. Total exports rose 0.8 percent, mainly on higher crude oil prices. Total imports declined 0.4 percent, due to fewer aircraft imports.

Exports rose 0.8 percent in July to a record $51.3 billion, despite declines in 6 of 11 product sections. Increased exports of energy products and motor vehicles and parts were partially offset by lower exports of aircraft and other transportation equipment and parts. Year-over-year, total exports rose sharply (+16.3 percent). Month-over-month, exports excluding energy products edged down 0.2 percent in July.

Exports of motor vehicles and parts increased by 3.4 percent in July to $8.0 billion, primarily on the strength of higher exports of passenger cars and light trucks (+3.8 percent). This year, planned closures in the automotive manufacturing industry in July were fewer and shorter compared with a year earlier. For the section as a whole, exports rose 5.9 percent compared with July 2017, but were 6.7 percent lower than in July 2016.

Imports declined 0.4 percent to $51.4 billion in July, with 7 of 11 product sections decreasing. Lower imports of aircraft and other transportation equipment and parts, and of metal ores and non-metallic minerals, were partially offset by higher imports of energy products. Year over year, total imports rose 10.1 percent.

Following a 15.8 percent increase in June, imports of metal ores and non-metallic minerals fell 13.9 percent in July to $1.2 billion. The decline in imports was led by other metal ores and concentrates, which fell 16.7 percent due to decreased imports of gold bullion from Japan and of gold doré from Brazil and the Dominican Republic.

Exports to the United States rose 3.3 percent to $38.4 billion in July, and increased 15.8 percent on a year-over-year basis. Imports from the United States edged down 0.1 percent to $33.1 billion in July.

Consequently, Canada's trade surplus with the United States widened from $4.1 billion in June to $5.3 billion in July. This represents the largest trade surplus observed since October 2008. For the year to date through July, Canada's merchandise trade surplus with the United States was $24.2 billion, while it totaled $25.6 billion for the same period in 2017.

July marked the second consecutive month in which tariffs were applied to exports of steel and aluminum products to the United States. It was also the first month in which tariffs were imposed on imports of steel, aluminum and other miscellaneous products from the United States.

Imports of steel products from the United States subject to a 25 percent tariff fell 39.6 percent in July, on a customs seasonally adjusted basis. This follows a 32.7 percent increase in June. Year over year, imports of these products decreased 16.3 percent.

After reaching a record high in June, exports to countries other than the United States fell 6.0 percent to $12.8 billion. Several countries contributed to the decline in July, including Japan, Germany, Mexico, India and Saudi Arabia. These decreases were partially offset by higher exports to the United Kingdom (crude oil and unwrought gold).

Imports from countries other than the United States fell 1.0 percent to $18.3 billion in July. Lower imports from Belgium (pharmaceutical and medicinal products), Japan (various products) and Saudi Arabia (crude oil) were mainly behind this decline.

Consequently, Canada's trade deficit with countries other than the United States widened from $4.8 billion in June to $5.5 billion in July.


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