Canada Exports to US Keep Falling as Tariffs Curb Shipments

EliyaBusiness2025-07-049190

(Bloomberg) -- Canada’s share of exports destined for the US shrank to the smallest proportion since at least 1997, excluding the Covid pandemic. Shipments to other countries reached a new high, led by gold exports.

Most Read from Bloomberg

NYC Commutes Resume After Midtown Bus Terminal Crash Chaos
Struggling Downtowns Are Looking to Lure New Crowds
Massachusetts to Follow NYC in Making Landlords Pay Broker Fees
Foreign Buyers Swoop on Cape Town Homes, Pricing Out Locals
What Gothenburg Got Out of Congestion Pricing

With President Donald Trump’s tariffs crushing exports and imports between Canada and its biggest trading partner, the country’s share of exports destined for the US shrank to 68.3% in May, from last year’s monthly average of 75.9%, according to Statistics Canada data Thursday.

Exports to the US were down for a fourth straight month, declining 0.9% in May. Canadian businesses and consumers were also buying fewer cars and other products from the US, with imports falling 1.2%, a third straight monthly drop.

Canada exports most of the cars it makes to the US. While the country’s shipments of cars and parts rose 0.9% in May from a month earlier, shipments plunged 8.4% from a year ago. Prime Minister Mark Carney met Wednesday with auto industry representatives to discuss trade negotiations with the US.

Canada’s goods trade surplus with the US widened slightly to C$3.2 billion ($2.4 billion) in May, from C$3.1 billion in April.

“Canada-US trade is stuck in a lull and it is unlikely to improve for a while. Activity in both directions has slowed, and the drop in imports, especially for integrated trade like energy and manufacturing, is a warning sign that exports could be impacted in the coming months,” Andrew DiCapua, principal economist at the Canadian Chamber of Commerce, said in an email.

Exports to countries other than the US, however, surged to a record high, led by higher shipments of gold to the UK, crude oil to Singapore and unwrought aluminum and pharmaceutical products to Italy. Canada’s trade deficit with countries excluding the US narrowed to C$9.1 billion in May, from C$10.7 billion in April.

Higher shipments elsewhere helped narrow Canada’s trade deficit to C$5.9 billion in May, from a record C$7.6 billion in April. May’s smaller trade gap was in line with the median projection in a Bloomberg survey of economists.

Alexandra Brown, economist at Capital Economics Ltd., called the increased shipments to non-US destinations “a small consolation,” saying in a report to investors that “the outlook for exports continues to be weak.”

Story Continues

Total exports rose 1.1% in May, the first increase since January, led by higher gold shipments. However, excluding metal and non-metallic mineral products, exports were down 1.2%. Exports of consumer goods rose 2.6% due to higher pork exports to Japan. A 5.6% decrease in energy exports partially offset some of the gains.

Total imports were down 1.6% in May, the third consecutive monthly decline, led by lower inbound shipments of unwrought gold, which saw a strong increase in April when imports from US surged. Imports of cars and parts fell 5.3%, with passenger cars and light trucks dropping 9.7% to the lowest level in more than two years.

In volume terms, total exports were up 0.7%, and imports fell 0.6%.

--With assistance from Mario Baker Ramirez.

(Recasts with new headline and details starting from the second paragraph.)