Trade was bustling in January, despite U.S. tariff uncertainty, as Canadian merchandise exports increased 5.5 per cent as well as imports, which increased 2.3 per cent.
According to data from Statistics Canada, January marked the fourth consecutive monthly increase for exports and imports, which both hit record highs in January.
“Canada’s merchandise trade surplus with the world widened from a revised $1.7 billion in December to $4.0 billion in January. This was the largest surplus since May 2022,” reads the report.
Additionally, Canada’s exports exceeded six out of the 11 categories, with energy being its largest export, up $143.7 billion.
Metal and non-metallic mineral products were the second largest export, up $20.2 billion in January.
Exports in electronic and electrical equipment and parts saw a decrease of $29.2 billion, with industrial machinery, equipment and parts also down $23.5 billion.
“Following a 6.0% increase in December, total exports increased 5.5% in January to reach a record of $74.5 billion,” reads the report. “The strong increases in total exports in December and January occurred in the context of announcements from the United States federal government that tariffs on Canadian goods would be imposed.”
It’s likely that the threat of tariffs boosted trading patterns which were incentivised by companies shipping their products before the additional costs could be implemented.
“Exports to the United States increased 7.5% in January and reached a record for a second consecutive month. The value of the Canadian dollar decreased 1.0% on average in January against the US dollar, which also contributed to the increase in total exports (and total imports) in the month,” reads the report.
Motor vehicles and parts saw a significant increase in January, up 12.5 per cent, with passenger cars and light trucks reaching their highest level since May 2019.
“Exports of consumer goods rose 7.8% in January. Following a strong decline of 22.8% in December, exports of pharmaceutical products surged 41.5% in January, mainly because of higher shipments to the United States,” it said.
Statistics Canada monthly international merchandise trade report relies heavily on the administrative data from the Canada Border Service Agency.
“Following a 6.8% increase in November and a 6.3% increase in December, exports to the United States rose 7.5% in January, reaching a record of $58.2 billion,” reads the report. “Meanwhile, imports from the United States increased 4.7%. As a result, Canada’s merchandise trade surplus with the United States widened from $12.3 billion in December to a record $14.4 billion in January.”
However, exports to countries outside the U.S fell 1.0% in January, with lower exports heading to Switzerland in the form of unwrought gold and aircraft, South Korea being coal and various products to Germany.
Excluding imports from the U.S., Canada saw a decrease of 1.4 per cent in January.
Canada slightly narrowed its trade deficit with countries other than the U.S. from $10.6 billion in December to $10.4 billion in January.
Imports in December accounted for $68.9 billion in trade while exports came in at $70.6 billion.
“When international trade in goods and services are combined, exports rose 4.1% to $92.1 billion in January, while imports increased 1.7% to $88.9 billion. As a result, Canada’s total trade surplus with the world went from $984 million in December to $3.2 billion in January,” reads the report.