Canada posted a trade surplus in December, Statistic Canada said Wednesday, driven in part by a widening trade gap with the United States, an issue being closely scrutinized by President Donald Trump.
Statistics Canada put the monthly surplus at Can$708 million (US$495 million), the first surplus in 10 months, with exports rising by 4.9 per cent.
That spike was probably linked to increased trade volumes among companies trying to plan ahead after Trump threatened to impose a 25 per cent import tariff on all Canadian goods, according to TD Economics.
“Trade-related uncertainty has likely led companies to stockpile inventories, temporarily boosting trade,” Maria Solovieva, of TD Economics, said in a note.
Trump announced his plans to impose tariffs on Canada after he won the Nov. 5 election.
He signed an executive order Saturday for the measures to go into force on Tuesday, prompting Canada to unveil a retaliatory package.
On Monday, Trump agreed to pause his tariffs for 30 days while the two sides negotiate further.
Chief among his justifications for tariffs were concerns over illegal immigration and the flow of deadly fentanyl across US borders, but he has previously also pointed to America’s trade deficits with its northern neighbour.
Statistics Canada said the trade surplus with the United States widened from Can$8.2 billion in November to Can$11.3 billion in December.
The news came as the US Commerce Department announced the US trade gap swelled last year to its second-largest on record.
A growing trade imbalance may impact further talks between the United States and Canada to avoid a trade war.
Trump has maintained that the United States does not need to import anything from Canada.
He has claimed without citing evidence that bilateral trade amounts to a US subsidy for Canada and that Canada would not be “a viable country” without it.
