\n
<\/p>\n
Canada\u2019s latest trade numbers indicate that the ongoing dispute with the United States continues to take its toll, with <\/p>\n
steel, aluminum<\/p>\n
and automobiles \u201cbearing the brunt.\u201d <\/p>\n
Statistics Canada data released Tuesday revealed the trade deficit grew to $5.9 billion in June from a downwardly revised $5.5 billion the month before, as imports outpaced exports, rising 1.4 per cent versus 0.9 per cent. <\/p>\n
\u201cCanada\u2019s deficit in goods trade was little changed in June, albeit with plenty of moving pieces in the detail due to <\/p>\n
U.S. tariff policy<\/p>\n
,\u201d Andrew Grantham, an economist with CIBC Capital Markets, said in a note, adding that \u201cCanadian trade still hasn\u2019t found a new footing.\u201d <\/p>\n
Details behind the numbers belied an apparent increase in trade activity. <\/p>\n
Imports rose due to a one-off shipment of industrial machinery to a Newfoundland oil project, while exports rose mainly on a jump in the price of oil. <\/p>\n
Minus those factors, Grantham said imports shrank nearly two per cent and exports fell 0.4 per cent when adjusted for inflation. <\/p>\n
\u201cWhile trade flows should stabilize in the months ahead, the level of trade will remain lower than it was previously due to ongoing U.S. tariff policy and related uncertainty,\u201d Grantham said. <\/p>\n
Exports to the U.S. were down 12.5 per cent in June from the same time last year, while imports were down 4.2 per cent year over year. <\/p>\n
Economists attribute the bulk of the decrease in U.S. exports to the ongoing decline in shipments of aluminum and steel, with the <\/p>\n
doubling of tariffs<\/p>\n
to 50 per cent from 25 per cent having a \u201cclear impact,\u201d Grantham said, adding that exports in both sectors were down just over 11 per cent, their lowest levels since 2020. <\/p>\n
Auto exports were also down, falling 4.2 per cent on the month to lows not seen since late 2022. <\/p>\n
Shelly Kaushik, an economist at BMO Capital Markets, said in a note that auto exports were down 8.5 per cent year over year \u201c<\/p>\n
alongside slower domestic production.\u201d<\/span> <\/p>\n CIBC\u2019s Grantham estimated that trade to the U.S. accounted for 70 per cent of exports, which is up from May but still below the 75 per cent average. <\/p>\n Marc Ercolao, an economist at <\/p>\n Toronto-Dominino Bank<\/p>\n , said in a note he believes that exports will continue to recover after nearly hitting a five-year low in April. <\/p>\n \u201cIt is the sectors impacted by tariffs \u2014 steel, aluminum, autos and energy \u2014 that continue to disproportionately bear the brunt of the shock,\u201d he said. <\/p>\n June\u2019s data also closed the books on the second quarter, and Ercolao thinks trade will put a \u201csubstantial dent\u201d in Canada\u2019s economic growth. TD is forecasting the economy will contract two per cent in the second quarter, annualized from the first quarter. <\/p>\n One bright spot in the trade report was the apparent resilience of the increase in exports to other countries. <\/p>\n