Canada slashes trade deficit in June
Canada's trade deficit fell to Can$626 million ($482 million US) in June, according to official data released Friday, as the nation searched for new trading partners and eased its reliance on the United States.
The figure was far below the Can$2.3 billion deficit forecast by economists following a Can$2.7 billion deficit posted in May.
"Canadian trade was a large and pleasant surprise in June, and a surge in exports for the month capped a solid quarter," CIBC economist Avery Shenfeld said in a research note, adding that it will likely mean a Bank of Canada interest rate hike in September or October.
The United States is still Canada's largest single trading partner.
But the month saw growing trade diversification away from the United States as trade tensions worsened and the two neighbors slapped tit-for-tat tariffs on metals and other goods.
In June, total exports rose 4.1 percent to Can$50.7 billion, said Statistics Canada. It was the first time exports surpassed the Can$50 billion mark.
There were increases during the month of exports of crude oil, heavy fuel oils, diesel fuel, metal ores and non-metallic minerals, motor vehicles and parts, as well as industrial machinery, equipment and parts.
Exports of aircraft and other transportation equipment and parts also rose sharply to a record Can$2.5 billion, largely on higher shipments of business jets.
June was the first month in which Canadian exports of steel and aluminium products to the United States were subject to tariffs of 25 and 10 percent, respectively. This led to a 36.8 percent decline in exports of affected steel products to the US, following a spike in previous months.
Aluminium exports to the US fell 7.0 percent in the month.
Total imports, meanwhile, edged down 0.2 percent to Can$51.3 billion.
Canada imported less refined petroleum energy products as several Canadian refineries were brought back online, reducing the demand for foreign motor gasoline and diesel fuel.
Imports of aircraft and other transportation equipment and parts also decreased.
© 2018 AFP