FX.co ★ Canada Trade Gap Narrows as Expected

Canada reported a trade deficit of C$5.9 billion for May 2025, a reduction from the C$7.6 billion deficit observed in April. This improvement was driven by a decrease in imports coupled with an increase in exports, influenced by Ottawa's reciprocal tariffs and filing delays related to the CARM system. Imports decreased by 1.6% to C$66.7 billion, marking the third consecutive month of decline, primarily due to reductions in metal and non-metallic mineral products (down 16.8%) and motor vehicles and parts (down 5.3%). Imports from the United States declined by 1.2% as Canada continued to enforce its reciprocal tariffs. Meanwhile, exports rose by 1.1% compared to the previous month, reaching C$60.8 billion. Although exports to the U.S. fell by 0.9%, this was compensated by a 5.7% increase in exports to countries other than the U.S. Notably, sales increased for metal and non-metallic mineral products (up 15.1%), and consumer goods exports also experienced a rise (up 2.6%).