Canadian global exports declined in March, despite a double-digit surge in trade with the U.K., Germany and other European nations as part of a continued plan to offset reliance on the U.S.
Canada’s global merchandise trade deficit was reduced from $1.4 billion in February to $506 million in March, driven by a decline in exports to the U.S. due to tariffs.
While exports to countries elsewhere jumped by up to nearly 100% since February, Canada’s reliance on the American market was still dramatically felt as total exports declined.
Prime Minister-elect Mark Carney said in March that Canada’s “old relationship with the United States was “over” and that he travelled to Europe, aiming to expand trade.
“We will need to pivot our trade relationships elsewhere,” Carney told reporters at the time. “That’s why I chose to go to France and the United Kingdom, two long-standing and reliable partners, friends and allies of Canada.”
U.S. tariffs on various Canadian imports took effect in early March, including a 25 per cent tariff on Canadian steel and aluminum.
This led to a 9 per cent decrease in exports of basic and semi-finished iron and steel products, while exports of unwrought aluminum and aluminum alloys were up 4.4 per cent, a fourth consecutive monthly increase.
Canada followed by implementing 25 per cent retaliatory tariffs on U.S. steel and aluminum on March 13, decreasing the import of non-metallic mineral products by 15.8 per cent.
Overall exports to the U.S. dropped by 6.6 per cent, “following the strong ramp-up in exports to the United States that led to a record in January.”
However, this decline was offset by an increase in exports to countries outside the U.S., which jumped up by 24.8 per cent.
“Exports to the United Kingdom (unwrought gold), the Netherlands (crude oil), Hong Kong (crude oil) and Germany (various products) increased the most for the month,” said Statistics Canada.
From February to March, Canada’s exports to the U.K. increased by 93.7 per cent, to the Netherlands by 74.8 per cent, to Germany by 52.3 per cent and to Italy by 22.3 per cent.
There were export declines in six of the 11 product sections overall in March, with lower prices contributing to the month’s decrease in exports.
Meanwhile, imports from countries outside the U.S. were up 1.0 per cent in March, and total exports increased by 6 per cent in the first quarter of 2025, hitting a record high of $214 billion.
Imports into Canada saw their first decrease after increasing for five consecutive months in March, dropping 1.5 per cent.
According to data from Statistics Canada, the March deficit fell “within the typical bounds for monthly revisions applied to imports and exports in subsequent months” but significant movement took place concerning U.S. trade.