By Promit Mukherjee
OTTAWA, Jan 29 (Reuters) – Canada posted a huge jump in its monthly international trade deficit in November as merchandise exports dropped by a big margin, data showed on Thursday, and economists said firms were still pursuing their drive to diversify trade away from the U.S.
It posted a goods trade deficit of C$2.2 billion ($1.62 billion) in November, compared with an upwardly revised C$395 million registered in October, Statistics Canada said.
Barring September, when Canada posted a marginal surplus, there has been a trade deficit with the U.S. since February 2025, coinciding with the start of uncertainty driven by President Donald Trump’s tariffs and takeover threats.
Trump’s levies on imports of steel, automotive, aluminum and lumber have hit these critical Canadian sectors hard, pushing exporters to find new markets.
Exports to the U.S. accounted for over 68% of total outbound shipments from Canada in November, down from 76% a year ago.
The November deficit was largely driven by a 24.4% drop in exports of metals and nonmetallic goods, led by a fall in exports of unwrought gold, StatsCan said.
Large declines were observed in exports of unwrought gold to Britain, the United States and Hong Kong. In volume terms, exports were down 0.9%.
Exports of motor vehicles and parts fell by 11.6%. This was the biggest drop seen in this category in three years, the statistics agency said.
Imports also dropped, but minimally, with total imports down only 0.1% to C$66.14 billion. Imports of motor vehicles and parts and energy products led the slight decline.
U.S. TRADE
Exports to the U.S. decreased by a smaller amount than the fall in imports from south of the border, helping boost Canada’s merchandise trade surplus with the U.S. to C$6.6 billion in November, up from C$5.2 billion in October.
Imports from the U.S. dropped 5.4% while exports dropped only 1.8%.
“I do see the momentum moving in the right direction. Are we going to see results overnight? No,” said Stuart Bergman, chief economist at Export Development Canada.
He said exports to the U.S., which posted their second monthly decline in November, will only keep shrinking as exporters find new markets.
However, he warned that Canada’s exports were still concentrated in a handful of countries with almost 90% of its exports going into the U.S., Britain, the European Union and China, and it needed to diversify more.
Imports from countries other than the U.S. rose 7.8%, their highest level in current records, StatsCan said, adding that this trend was led by China and Germany.
However, exports to other countries apart from the U.S. fell by 4.9%, taking Canada’s trade deficit with countries other than the U.S. up to C$8.8 billion in November from C$5.6 billion in October.
The Canadian dollar firmed after the data release and was trading up 0.32% to C$1.3511 to the U.S. dollar, or 74.03 U.S. cents. Yields on the two-year government bonds were down 0.5 basis points to 2.4192%.
The November trade data was delayed as information for Canadian exports to the U.S. was unavailable due to a 43-day government shutdown in the United States, impacting data collection for several months.
(Reporting by Promit Mukherjee; editing by Dale Smith and Mark Heinrich)
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