Canada's Trade Surplus With U.s. Nearly Doubles To $11.2 Billion

Canada’s trade surplus with the United States grew to $11.2 billion in August from $6.1 billion in July, the largest positive monthly change since 1997, as exports surged ahead of the implementation of U.S. Section 338 levies.

Exports to the U.S. jumped by 8.1 per cent in August while imports were down 2.5 per cent, according to Statistics Canada data published Tuesday.

While the new tariffs weren’t fully implemented until the end of August, Statistics Canada officials said U.S. President Donald Trump’s announcement on July 22 may have influenced trade patterns and prompted American customers to stock up to avoid additional costs.

Canadian counter-tariffs that were announced at the end of August weren’t reflected in Tuesday’s data because they took effect in September.

Meanwhile, Canada’s overall trade surplus widened to a four-year high of $4.2 billion in August after narrowing to $787 million in July.

Total exports increased by 2.5 per cent month over month in August after falling by 2.6 per cent in July, mainly due to energy exports — particularly diesel to Peru, the United States, the Netherlands and the United Kingdom — which increased by 4.7 per cent.

Gains were also broad-based, with eight out of 11 product sections reporting increases in exports for the month. Exports in consumer goods; industrial machinery, equipment and parts; and electronic and electrical equipment and parts also helped widen the trade surplus.

In real or volume terms, exports also rose by 2.5 per cent.

Total imports decreased by two per cent in August, the first decline since January, driven mainly by imports of motor vehicles and parts, which fell by 8.8 per cent in August after a 8.3 per cent increase in July.

Imports of metal and non-metallic mineral products were also down in August, as well as imports of metal ores and non-metallic minerals.

In volume terms, imports were down by 1.1 per cent.

Statistics Canada noted that the appreciation of the loonie affected import and export values for August. The average value of the Canadian dollar increased by 1.1 cents U.S. that month, the largest monthly increase since December. When expressed in U.S. dollars, exports rose by four per cent in August while imports decreased by 0.6 per cent.

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Exports to non-U.S. markets decreased by 8.5 per cent in August after increasing by 8.2 per cent in July. The largest contributors to this decline were exports of gold to the U.K., energy products to the Netherlands and aircraft and crude oil to France.

Imports from non-U.S. markets also fell by 1.4 per cent in August, driven by lower imports of crude oil from Saudi Arabia as well as passenger car and light trucks from Japan and South Korea. This was partly offset by higher imports from Germany and China.

As a result, Canada’s trade deficit with countries other than the U.S. widened to $7 billion in August from $5.3 billion in July.

• Email: ptran@postmedia.com