FX.co ★ Canada Trade Gap Narrows on Tariff Impact

In March 2025, Canada reported a trade deficit of C$0.51 billion, an improvement over the C$1.41 billion shortfall recorded in the previous month. This narrowing can be attributed to Ottawa's retaliatory tariffs in response to new US levies, coupled with a voluntary boycott of US products by Canadian retailers and consumers, resulting in a greater reduction in imports compared to exports. Import levels decreased by 1.5% to $70.4 billion, marking the first decline since September of the previous year, largely due to substantial reductions in imports of metal and non-metallic mineral products (-15.8%) and energy products (-18.8%). Imports from the United States fell by 2.9% following Canada's imposition of a 25% tariff on US goods, including metals, effective March 13th. Concurrently, exports experienced a slight decline of 0.2% from the prior month, totaling $69.9 billion. Although exports to the United States dropped by 6.6% due to US tariffs on Canadian goods, this was counterbalanced by a robust 24.8% increase in sales to countries other than the US. The export of metal and non-metallic mineral products faced a 3.2% decline due to US tariffs on this sector, with consumer goods also witnessing a reduction in sales by 4.2%.