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Investing.com -- Canada’s trade balance deteriorated sharply in April, with merchandise exports plunging 10.8% and imports sliding 3.5%, according to data released Thursday by Statistics Canada. The resulting merchandise trade deficit hit a record $7.1 billion, widening significantly from the $2.3 billion shortfall posted in March.
Exports totaled $60.4 billion, the lowest since June 2023, marking a third consecutive monthly decline and the steepest drop in five years. Notably, exports to the United States fell 15.7% following the imposition of tariffs on Canadian goods, including a focus on Canadian-manufactured motor vehicles in early April, while exports to other countries rose by 2.9%.
Automotive exports were among the hardest hit, with motor vehicles and parts plunging 17.4%. Passenger cars and light trucks in particular declined 22.9% after surging in the months prior as automakers rushed to ship vehicles ahead of anticipated U.S. levies.
Exports of consumer goods dropped 15.4% to $7.0 billion, the lowest level since December 2023, with nearly all groups posting losses. The contraction was especially pronounced in food products such as chocolate and frozen items, as well as pharmaceuticals and meat, primarily due to falling demand from the United States.
Energy product exports also lost ground, falling 7.9% as crude oil exports tumbled 11.7% on weaker global pricing and demand. A rupture-induced pipeline shutdown in the northern U.S. further constrained volumes shipped, amplifying the sector’s downturn for a third straight month.
On the import side, declines were less severe, cushioned by a sharp increase in unwrought gold, silver, and platinum group metal imports, which nearly tenfolded to a record $2.7 billion. Removing those gains, imports would have dropped 6.9%, impacted predominantly by a 17.7% decline in motor vehicle and parts imports and downturns in machinery and electronics.
Currency fluctuations also played a role in the monthly weakness: the Canadian dollar rose 1.8 U.S. cents compared to March, its largest monthly gain since May 2021. When measured in U.S. dollars, exports fell a lesser 8.4% and imports just 0.9%, highlighting the currency’s dampening effect on trade values denominated in Canadian dollars.
Broader trade dynamics painted a mixed picture: while trade with the U.S. eroded, activity with non-U.S. partners set new records. Exports to countries such as the United Kingdom (TADAWUL:4280), China, and Brazil grew, and total trade with non-U.S. nations rose to an all-time high of $47.3 billion, with the deficit in that segment expanding to $10.7 billion.