Canada’s merchandise trade deficit was cut in half in April as exports rose to a record and imports moved lower, Statistics Canada said Wednesday.
The agency said the deficit amounted to $1.9 B compared with a deficit of $3.9 B in March.
The smaller than expected deficit came as exports rose 1.6 per cent to a record $48.6 B in April boosted by exports of metal and non-metallic mineral products, consumer goods and energy products.
“The recently imposed tariffs on aluminum and steel, together with retaliatory Canadian tariffs, will likely hold back movement of metals and metal products across the border and be a drag on economic activity – particularly in Quebec and Ontario,” TD Bank senior economist Michael Dolega wrote in a report.
Statistics Canada said that last year the export value of aluminum products subject to the new tariffs was about $9.2 B, while the value of steel products was about $7.2 B.
The agency said the import value of U.S. goods that may be subject to Canada’s proposed tariffs was $19.4 B in 2017.
Economists had expected a deficit of $3.4 B, according to Thomson Reuters Eikon.
“Canada’s trade picture perked up to start Q2, consistent with expectations that growth is going to bounce back after a soft start to the year,” said Benjamin Reitzes, Canadian rates and macro strategist at BMO Capital Markets.
“While there’s still tons of room for improvement on the trade front, this is welcome news and consistent with the Bank of Canada hiking rates at the July policy meeting.”