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Statistics Canada says the country’s merchandise trade deficit increased to $3.2 billion in December, as rising imports outpaced export growth—defying expectations that the deficit would be smaller than in November.

Economists had expected a deficit of $2.2 billion, down from $2.7 billion in November, according to Thomson Reuters.

Total imports increased 1.5% to a record $49.7 billion in December, boosted by higher imports of energy products and industrial machinery, equipment and parts.

Read: Snapshot: Canadian economic data

Imports of energy products increased 16.9% to $3 billion in December, while industrial machinery, equipment and parts climbed 6.3% to $5 billion.

Meanwhile, total exports rose 0.6% to $46.5 billion driven by higher exports of energy products and metal and non-metallic mineral products.

Exports of energy products rose 6.2% to $8.5 billion, while metal and non-metallic mineral products climbed 7.7% to $5.6 billion.

U.S. trade gap highest since 2008

The U.S. trade deficit hit the highest level in nine years in 2017, defying President Donald Trump’s efforts to bring more balance to America’s trade relationships.

Read: Snapshot: U.S. economic data

The Commerce Department says the trade gap in goods and services rose to $566 billion last year, highest since $708.7 billion in 2008. Imports set a record $2.9 trillion, swamping exports of $2.3 trillion. The import surge reflects America’s economic strength; confident consumers are buying more foreign products.

The goods deficit with China hit a record $375.2 billion in 2017. And the goods gap with Mexico rose to $71.1 billion. Trump has sought to reduce the deficits with China and Mexico.

The overall December trade deficit in goods and services rose to $53.1 billion, highest since October 2008, from November’s $50.4 billion.

Originally published on Advisor.ca
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