Despite ongoing threats of U.S. tariffs, Canada has managed to post its first trade surplus in 10 months as exports expanded at a faster rate than imports.
Ironically, the threat of U.S. tariffs led American businesses to buy more Canadian products as they looked to build-up inventories ahead of potential new duties being placed on imported goods from Canada.
The result is that Canada posted a December trade surplus of $708 million compared with a deficit of nearly $1 billion the previous month.
It was the first trade surplus that Canada has posted in nearly a year and was driven by a surge in exports.
Statistics Canada reported that increased shipments of energy products, especially to the U.S., as well as higher crude oil prices and a weak Canadian dollar drove growth in exports during December.
Imports grew by 2.3% in December, slower than the 2.8% gain seen in November. Analysts polled by the Reuters news agency had forecast a December surplus of $750 million.
Canada’s trade surplus with the U.S. widened for a second consecutive month, growing 5% in December to $11.3 billion, led primarily by greater exports of energy products such as crude oil.
Imports from the U.S. into Canada declined 1.5% in the month.
Stockpiling by U.S. companies ahead of potential tariffs under U.S. President Donald Trump and strong American consumer demand led to the rise in Canada’s exports, say analysts.
Canada’s merchandise trade surplus with America totaled $102.3 billion for all of 2024, down from a surplus of $108.3 billion in 2023, said Statistics Canada.
The combined value of Canadian imports and exports traded with the U.S. surpassed the $1 trillion mark for a third consecutive year.
During 2024, Canada sent 75% of its exports to the U.S. and bought 62% of its imports from south of the border.
Exports to the U.S. account for 18% of Canada’s gross domestic product (GDP) and are responsible for more than two million jobs in the country.
Excluding America, Canada’s trade deficit with the rest of the world expanded in December to $10.6 billion from $9.2 billion in November.
