Canada posts C$978 million trade deficit in September

Andrew Cummings
November 6, 2019

Canada's merchandise trade deficit narrowed to $978 million in September compared with a revised deficit of $1.2 billion in August, as imports fell faster than exports, Statistics Canada said Tuesday.

Ongoing trade conflicts between the United States and China is hitting business investment in Canada and weighing on export markets. In volume terms, which strip out the effects of price changes, exports fell 2.1 per cent in September.

The August deficit had previously been reported as $955-million, Statistics Canada said.

Exports of canola plunged by 49.8% to their lowest level in six years after China blocked some shipments.

Total exports for the month reached $5.90 billion, 2.6 percent lower compared to $6.05 billion in September 2018.

Imports of metal and non-metallic minerals were also down, slumping 20.5% on the month because of lower shipments of gold and copper ores. Exports of refined gold fell in September, largely eliminating gains in July and August.

"While this looks like a soft report, the declines in two-way trade were anticipated and not any worse than we had feared", said Andrew Grantham of CIBC Economics.

The data helped push the Canadian dollar up to a near one-week high against its US counterpart. These have yet to show a "significant rebound" since the United States lifted steel and aluminum tariffs in May, the agency said.

Lower imports of transportation equipment parts from Belgium and Swiss pharmaceuticals, meanwhile, were partially offset by higher imports of cellphones from China and various products from Britain.

Canada's trade surplus with the USA, its main trading partner, was largely unchanged in September as both exports and imports fell. At the same time Canada bought more Chinese goods which increased their deficit with that country.

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