While US Trade Deficit Shrinks, Canada Posts Largest Yet!

Canada Posted Largest Trade Deficit on Record in March

The 2018 first quarter goods trade deficit with China and with the world is significantly larger than figures for the first quarter of 2017 even as the March monthly goods deficit with China declined as USA exporters accelerated shipments to beat tariffs that may be imposed relating to the 301 action, which gave an extra boost to us exports overall this month.

United States exports rose by 2 per cent month-on-month in March to... Economists predicted the March figure would narrow to C$2.25 billion.

This means that Canada posted the largest trade deficit in our nation's history in March, with the gap between imports and exports reaching $4.14 billion.

But even without a NAFTA deal nailed down, Canadian exporters may be starting to make up for lost time amid a healthy and growing USA economy, which is by far Canada's biggest export market.

The goods trade deficit with the world of $196.7 billion is larger than any period since before the 2008 financial crisis - up 8.5 percent over the first quarter of 2017 deficit of $181.4 billion.

While Canada's trade deficit increases and overall economy wobbles, our Southern neighbor has rapidly shrunk their deficit and grown their market bringing with it new investments and jobs. There were also increases in exports of soybeans, corn and crude oil.

Despite the reduction in March, the trade gap is up 18.5 percent to $163.4 billion so far this year.

Imports from China (+26.6 percent) led the increase, mainly on higher imports of computers and peripheral equipment, and of communications and audio and video equipment. Real goods exports were the highest on record.

The 2018 first-quarter goods trade deficit with the world is up $24.4 billion compared to the $172.4 billion first-quarter global goods deficit in 2016, the previous year of the Obama administration.

Imports of goods and services fell 1.8% in March to $257.5 billion.

Imports of consumer goods decreased by $0.9 billion. "They're buying beans in Canada, in Brazil, mostly Brazil, but very deliberately not buying anything from the U.S".

However, the government statistical agency noted higher than usual import levels of light trucks, as well as increased imports of clothing, footwear and accessories, and pharmaceutical and medicinal products.

Several analysts also pointed to the timing of Lunar New Year, which began in mid-February, as a possible source of recent import volatility.

March's drop in core capital goods orders and shipments suggest business spending on equipment is slowing.


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