Canada’s merchandise trade surplus narrowed sharply in July as imports increased and exports declined, with shipments to the United States posting their steepest drop in more than a year.
Canada recorded a C$770 million trade surplus in July, down from C$4.2 billion in June and well below market expectations for a C$3.6 billion surplus, according to Statistics Canada.
The decline marked the first narrowing of the trade surplus in four months.
Imports Rise on Vehicles, Copper and Gold
Total imports increased 2.2% to C$75.4 billion, led by stronger purchases of motor vehicles and parts, which climbed 11.4%.
Imports of passenger cars and light trucks jumped 19.8%, while purchases of non-ferrous metals and metal alloys surged 49.7%, partly reflecting higher imports of copper anodes from Chile.
Statistics Canada also reported increased purchases of gold from U.S. residents in Canada.
The broad increase in imports contributed significantly to the narrowing of the country’s merchandise trade balance.
Exports Fall 2.3% as Energy Shipments Decline
Exports decreased 2.3% to C$76.1 billion, reversing part of the gains recorded during previous months.
Shipments of metal and non-metallic mineral products fell 8.5%, while energy exports declined 4.4%.
Within energy, crude oil exports decreased 5.6%, while natural gas shipments dropped 14%.
The declines were partially offset by a sharp increase in exports of aircraft and other transportation equipment and parts, which rose 34.9% in July.
Exports to U.S. Drop 6.6%
Trade with the United States weakened considerably during the month. Canadian exports to its largest trading partner fell 6.6%, the steepest monthly decline since April 2025.
The decline reduced Canada’s merchandise trade surplus with the United States, while exports to several other major markets increased.
Shipments to the Netherlands, China and Germany all rose during July, providing some diversification in Canadian export demand but not enough to offset the decline in U.S.-bound shipments.
The July figures left Canada with exports of C$76.1 billion against imports of C$75.4 billion, producing a substantially smaller merchandise trade surplus than in June.
