MNI 5 THINGS:Canada Goods Trade Gap Narrows On Export Gains>

--5 Things We Learned From Canadian Merchandise Trade Data

By Yali N'Diaye

     OTTAWA (MNI) - The following are the key points from the July data 

on the Canadian merchandise trade data released Wednesday by Statistics 

Canada: 

     - The goods trade deficit narrowed to C$0.1 billion in July, the 

smallest since December 2016, when the balance was actually a surplus. 

The June deficit was revised down to C$0.7 billion from C$0.6 billion. 

Analysts in a MNI survey had expected the gap to widen to C$1.2 billion. 

While a rise in exports combined with lower imports explained the 

improvement, real trade data showed a less positive export picture. 

     - Exports rose 0.8% on the month following a 4.6% advance in June, 

to C$51.3 billion. Overall, 6 of 11 categories posted decreases. Imports 

were down 0.4% in July to C$51.4 billion, following a 0.1% increase in 

June. 

     - In real terms, however, exports contracted 0.8%, showing July's 

improvement was all price related. This partly reflected the energy 

story, as energy exports rose 5.0% to C$10.3 billion, the highest level 

since September 2014. However, energy export volumes fell 3.0%. Overall 

exports excluding energy edged down 0.2% in July, with volumes flat. 

Real imports fell 1.1%. On the positive side, imports of industrial 

machinery and equipment and parts rose 1.3% (volumes up 0.9%). Overall, 

the real trade deficit narrowed to C$0.5 billion from C$0.7 billion. 

     - Regionally, exports to the U.S. rose 3.3%, following a 2.7% 

increase in June. Imports from the U.S. edged down 0.1%, leading to a 

trade surplus of C$5.3 billion, the largest since October 2008. 

Meanwhile exports to non-U.S. countries fell 6.0% and imports declined 

1.0%. 

     - July was the second month that Canada's exports of steel and 

aluminum were hit by U.S. tariffs of 25% and 10%, respectively. It was 

the first month that Canada retaliated with similar tariffs on U.S. 

steel, aluminum and other products. On a customs seasonally adjusted 

basis, steel exports to the U.S. rose 16.4% after falling 36.3% in June. 

Aluminum exports fell 2.0%. Steel imports plunged 39.6% and aluminum 

imports were down 5.2%. Imports excluding tariffed products rose 0.8% 

(for a total decline of 0.2%) in July. Exports excluding tariffs goods 

rose 0.3%. 

--MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com 

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