Canada’s trade surplus in August expanded significantly to $4.2 billion, driven by a surge in exports to the U.S. ahead of the implementation of President Donald Trump’s new tariffs. Analysts had predicted a surplus of $1.55 billion, which was revised upward from $787 million. Canadian exports to the U.S. spiked by 8.1%, while imports from the U.S. declined by 2.5%, leading to a trade surplus with the U.S. of $11.2 billion, the highest in 19 months. This boosted Canada’s export share to the U.S. to nearly 70%, the highest since September 2025 when the new tariffs affecting about $20 billion of Canadian exports came into effect on August 22.
Economists anticipate that September will provide a clearer picture of the impact of the tariffs, covering various products such as wine, furniture, dairy items, clothing, and sports equipment. September will also reveal the effects of Canadian retaliatory tariffs on U.S. imports and Trump’s restrictions on certain Canadian goods.
Overall, Canadian exports in August rose by 2.5% to $77.91 billion, rebounding from a 2.6% decline in the previous month. Energy products, including refined petroleum and crude oil, led the gain with a 4.7% increase to $19.03 billion. Excluding energy products, exports rose by 1.8%, while total exports in volume terms grew by 2.5%. Notably, consumer goods, machinery, and electronic equipment exports saw significant increases in August.
Imports, on the other hand, decreased by 2% to $73.71 billion, with motor vehicles and parts experiencing the largest decline. Despite facing tariffs in key sectors like steel, aluminum, autos, and lumber for over 18 months, Canada has been diversifying its trade partners, reducing its reliance on the U.S. July saw an 8.2% increase in exports to countries other than the U.S., but in August, there was an 8.5% decline, widening the trade deficit with non-U.S. countries to $7 billion.
The Canadian dollar strengthened following the trade surplus data, trading at $1.4250 to the U.S. dollar, equivalent to 70.18 U.S. cents.