Updated:
Canada’s merchandise trade surplus widened to C$4.2 billion in August from a revised C$787 million in July, as exports rose and imports fell, Statistics Canada reported Tuesday, October 6. The turnaround was especially sharp in trade with the United States: Canadian exports south of the border increased 8.1%, while imports from the U.S. declined 2.5%, lifting the bilateral surplus from C$6.1 billion to C$11.2 billion.
The figures came as businesses adjusted to new U.S. tariffs on selected Canadian products. Statistics Canada said the tariff announcement may have prompted importers to bring shipments forward ahead of the duties taking effect late in August. That timing means the August increase may partly reflect orders moved forward rather than a sustained improvement in trade.
The wider goods surplus exceeded the C$1.55 billion economists had expected, according to Investing.com’s report, and marked Canada’s sixth consecutive monthly merchandise trade surplus. Statistics Canada’s release also showed a broad increase in exports, alongside a decline in imports, making the result more than a simple shift in U.S.-Canada trade flows.
Exports rise across several categories
Total merchandise exports increased 2.5% to C$77.9 billion in August, after falling 2.6% in July. Gains were recorded in eight of 11 product sections, and exports excluding energy products rose 1.8%. In volume terms, total exports also increased 2.5%, indicating the monthly gain was not solely a result of higher export prices.
Energy exports rose 4.7%, their first monthly increase since April. Refined petroleum exports climbed 17.4%, with higher diesel shipments to Peru, the United Kingdom, the United States and the Netherlands contributing to the increase. Crude oil exports rose 2.1%, which Statistics Canada attributed to higher prices; exports of nuclear fuel and other energy products surged 58.4%, driven by shipments to Germany and the U.K.
Some manufactured goods also recorded notable gains. Exports of industrial machinery, equipment and parts rose 10.1% to their highest level since January 2025, with increases in general-purpose machinery and heating, cooling and air-purification equipment shipments to the U.S. Exports of electronic and electrical equipment and parts grew 11%, while consumer-goods exports increased 6.6%.
Statistics Canada noted that some products contributing to the increase in electrical components and miscellaneous goods were among those targeted by U.S. tariffs. The agency said some of the tariffs were subsequently removed in September, underscoring that policy changes during the period were affecting both the timing and composition of trade.
U.S. trade balance posts a record monthly change
Canada’s C$11.2 billion surplus with the United States was the largest since January 2025. Statistics Canada described the month-to-month widening as the largest positive change ever recorded in Canada’s trade balance with the U.S. The rise reflected both the jump in exports and the decline in imports from Canada’s largest trading partner.
Washington announced on July 22 that it intended to impose new tariffs on a range of Canadian products and increase rates on others. The new measures took effect late in August, according to Statistics Canada. The agency said such announcements can influence trade patterns by encouraging U.S. importers to receive goods before higher duties apply. Canada subsequently announced new tariffs on selected U.S. goods at the end of August.
The tariff measures cover a range of products, including wine, furniture, dairy products, cement, clothing, fishing equipment and hockey equipment, Investing.com reported. The Associated Press reported that the U.S. tariffs applied to about $20 billion worth of Canadian goods. The scope is significant for affected producers, but the August data alone do not establish how much of the export increase was caused by buyers advancing shipments.
Imports fall as vehicle purchases retreat
Canadian merchandise imports declined 2.0% to C$73.7 billion, their first monthly fall since January. Six of 11 product sections still recorded gains, but the overall result was pulled down by motor vehicles and parts, which fell 8.8% after rising 8.3% in July. Imports of passenger cars and light trucks dropped 15.4% on a seasonally adjusted basis after reaching a record high in July.
Imports of metal and non-metallic mineral products fell 7.0%, while imports of metal ores and non-metallic minerals declined 15.5%. Statistics Canada also reported that real import volumes decreased 1.1%. The import decline therefore added to the improvement in the merchandise balance, although the agency’s figures do not attribute the overall decrease to tariffs alone.
Currency movements affected the reported values. The Canadian dollar gained 1.1 U.S. cents on average between July and August, its strongest monthly increase since December 2025. Statistics Canada cautioned that many cross-border transactions are conducted in U.S. dollars and then converted into Canadian dollars: expressed in U.S. dollars, Canadian exports rose 4.0% and imports fell 0.6% in August.
Trade outside the U.S. moves in the opposite direction
Exports to countries other than the United States fell 8.5% in August after jumping 8.2% in July. Lower shipments of unwrought gold to the U.K., energy products to the Netherlands, and aircraft and crude oil to France were among the largest contributors. Non-U.S. destinations accounted for 30.2% of Canadian exports, down from 33.9% in July.
That shift followed a July record for exports to markets outside the U.S., which Statistics Canada had reported at C$25.6 billion. The August reversal illustrates how a single month’s overall surplus can coexist with weaker sales in other markets. Canada’s merchandise trade deficit with countries outside the United States widened to C$7.0 billion from C$5.3 billion.
Combining goods and services, Canada’s exports rose 2.1% to C$99.1 billion in August, while imports fell 1.7% to C$94.4 billion. The resulting total trade surplus was C$4.6 billion, compared with C$988 million in July. Statistics Canada scheduled its September merchandise trade release for November 4; those figures will provide the next monthly reading after the late-August tariff changes.
