Statistics Canada reported that Canada’s trade deficit narrowed in November. It was the ninth consecutive month the economy ran a trade deficit. Exports and imports both increased over the month. Trade has come under an immense spotlight with the threat of widespread tariffs from the US. Economists expect the potential tariffs to weigh on Canada’s economic growth. Here’s a look at November’s trade data.

• Exports from Canada rose by 2.2% to $66.1 billion in November. This marked the highest value of exports since February 2024. Exports to the US rose by 6.8%, suggesting US purchasers might be trying to front-load purchases before tariffs kick in.
• Imports also increased, rising at a slower 1.8% pace. The total value of imports was $66.4 billion, its highest level ever. Higher purchases of consumer goods and industrial machinery drove November’s increase.
• Canada’s trade deficit narrowed to $320 million in November from $540 million in the previous month. Despite the overall deficit, Canada ran an $8.2 billion trade surplus with the US. President-elect Donald Trump has threatened to place a tariff on Canadian imports into the US.
• The US also reported its trade data yesterday, which showed its trade deficit widened to US$78.2 billion in November. Imports rose at a faster pace than exports.

The data is showing an uptick in trade activity between Canada and the US as we potentially approach a period of widespread tariffs. US purchasers might be frontloading orders to get ahead of the potential tariffs. The US is Canada’s largest trade partner. Canadian consumers rely on many imports from the US, while Canadian companies export goods from key industries such as car manufacturing and energy production. There is fear that the tariffs could raise consumer prices and hinder Canada’s trade activity, which could weigh on overall growth.

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