Canada’s exports to the United States dropped 6.6% in March, which was largely offset by a 24.8% rise in exports to other nations. Overall, Canadian exports fell 0.2% for the month.
Consumer goods exports dropped 4.2%, while meat and pharmaceutical products exports dropped 10.8% and 7.0% respectively. Motor vehicle exports rose 11.8%, though this preceded U.S. tariffs.
For the first time since September of 2024, imports dropped. The 1.5% overall decline was led by a 15.8% drop in metal and non-metallic mineral products, and an 18.8% drop in energy products. Total imports were down 0.1%.
This means Canada’s trade deficit narrowed from $1.4 billion to $506 million. This is why lower trade deficits cannot automatically be considered positive, since lower imports and lower exports leave the economy worse off.
U.S. steel and aluminum tariffs, along with Canadian counter tariffs, were imposed in mid-March, and the impact is not fully captured in the data.
U.S. trade actions are pushing many countries to shift away from trade with America when feasible, and Canada is no exception. Canadian exports to the U.K., Netherlands, Germany, and Hong Kong led the way amid an overall 24.8% surge in exports to non-U.S. markets, the second-largest increase on record.
Q1 imports and exports reached a record high, with exports up 6% for the quarter and imports up 5.2%. Q2 may prove tougher, with the full impact of tariffs and trade policy uncertainty being felt.
Spencer Fernando
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