Canada’s trade deficit nearly triples as U.S. exports strengthen

Canada posted a $3.6-billion trade deficit in June, widening from a $1.4-billion deficit in May. Exports fell 4.3% to $46.5 billion in June, according to a data release by Statistics Canada, which says the “sharp decrease was mainly due to lower exports of unwrought gold and energy products […].”

June’s decline follows three consecutive monthly record highs, the agency adds. In May, Canada’s imports and exports both reached record highs.

Read: Imports and exports hit record highs ahead of BoC decision

When it comes to imports, the story is slighter brighter. Statistics Canada says, “Imports edged up 0.3% to $50.1 billion, led by an increase in gold bullion.” But, even so, sustained growth in total imports slowed in June.

Imports of metal ores and non-metallic minerals rose (by 39.1%, mostly on higher volumes), along with imports of aircraft and other transportation equipment and parts (by 11.7%). But at the same time, says Statistics Canada, “Largely offsetting these gains were lower imports of motor vehicles and parts, down 3.2% to $9.4 billion, with widespread decreases throughout the section. The overall decrease follows five consecutive monthly increases.”

Read more from Statistics Canada.

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In the U.S.

The U.S. trade deficit narrowed in June as exports hit the highest level in two-and-a-half years.

The Commerce Department said Friday that the trade gap slid 5.9% in June to $43.6 billion.

Exports of goods and services rose 1.2% to $194.4 billion, the highest amount since December 2014 on higher foreign demand for American soybeans, computer accessories and other products. Services exports reached a record $65.4 billion.

U.S. exports may be getting a lift from a pickup in global economic growth and a drop in the value of the U.S. dollar against other currencies. A weaker dollar makes American products a better bargain in foreign markets.

Overall imports slipped 0.2% to $238 billion on a drop in demand for cellphones and other household goods.

So far this year, the trade deficit is up 10.7% to $276.6 billion.

The deficit means the United States is buying more goods and services from other countries than it is selling them. A shrinking trade gap boosts U.S. economic growth.

President Donald Trump has vowed to bring down America’s trade deficits, saying they are caused by bad trade deals and abusive practices by China and other U.S. trading partners.

The deficit in goods with China rose 3.1% in June to $32.6 billion and is up 6.1% to $170.7 billion so far this year.

The goods deficit with Mexico slid 18.3% in June to $6 billion. The Trump administration is preparing to renegotiate the North American Free Trade Agreement with Mexico and Canada. Trump has complained that NAFTA encourages U.S. manufacturers to move to Mexico to take advantage of cheaper labour.