Canada's exports to the United States reached a new record in shipments of automobiles, auto parts, and oil, allowing it to record its largest trade surplus with its southern neighbor. The country's trade surplus with the U.S. rose to 14.4 billion Canadian dollars in January, up from 12.3 billion Canadian dollars in December, Statistics Canada reported on Thursday.
Exports to the U.S. increased by 7.5 percent in January, setting a record for the second consecutive month. Uncertainty surrounding tariffs imposed by former President Donald Trump has influenced trade flows, prompting exporters and importers to accelerate shipments to avoid higher costs.
After a month delay, the Trump administration imposed a 10 percent tariff on Canadian energy products and a 25 percent tariff on everything else the U.S. purchases from Canada and Mexico, with a deferral for auto manufacturers until April. New tariffs are expected targeting what Trump considers trade imbalances.
This week, the Canadian government responded with retaliatory tariffs on U.S. products worth 30 billion Canadian dollars, including household appliances, cosmetics, fruits, and tires. The list will expand to include vehicles and other goods manufactured in the U.S. with a total import value of 155 billion Canadian dollars.
The overall trade deficit of the United States reached a record 131.4 billion dollars in January, with exports rising by 5.5 percent and a 2.3 percent increase in imports, both hitting historic highs with a fourth consecutive monthly increase.
Shipments to the U.S. supported the rise in key export products such as motor vehicles and their parts, energy products, and consumer goods. Canada's economy heavily relies on its ability to trade with the U.S. In 2024, the combined value of Canada's goods imports and exports with the U.S. surpassed the one trillion Canadian dollar mark for the third consecutive year.
Automobile exports increased by 12.5 percent in January, with over 90 percent of automobiles and light trucks destined for the U.S. Energy exports grew by 4.8 percent, driven by crude oil and natural gas heading to the U.S., while consumer goods exports rose by 7.8 percent, mainly due to the increase in shipments of pharmaceutical products to the south. Exports of industrial machinery also increased, primarily due to rising demand from the U.S.
