Canada’s merchandise trade deficit surged to a record $7.1 billion in April, driven by a 10.8% plunge in exports—the steepest drop since June 2023—largely due to new U.S. tariffs. Exports to the U.S. alone fell nearly 16%, with auto sector shipments down 17.4%, including a 22.9% fall in cars and light trucks. Consumer goods, food products, industrial machinery, and forestry products also saw sharp declines. While exports to non-U.S. markets rose 2.9%, they were insufficient to offset the downturn. The stronger Canadian dollar further weighed on export values. Economists now expect Canada’s GDP to stall in Q2, prompting forecasts for Bank of Canada rate cuts in July and September.
