Canada's Trade Balancing Act Amidst Tariff Concerns

Canada experienced a trade deficit of C$1.52 billion in February, a shift from the previous surplus, as exports and imports remain high. The impending U.S. tariffs have prompted inventory build-ups, influencing trade dynamics. Notably, energy and motor vehicle exports saw significant declines while imports continued to rise.

Canada faced a trade deficit in February, with both exports and imports nearing record highs, according to data released on Thursday. The deficit stood at C$1.52 billion, a steep downturn from the previous surplus peak of C$3.13 billion, Statistics Canada reported.

Experts surveyed by Reuters had anticipated a surplus tally of C$3.55 billion. The nation's trade activity has gained vigor since November as U.S. tariffs under President Trump loomed, sparking preemptive inventory stocking by businesses, primarily in the U.S.

The latest figures revealed Canada's trade surplus with the U.S. escalated for three straight months, hitting a record in January, despite a 5.5% fall in total exports to C$70.11 billion in February. Energy product exports saw a 6.3% decrease, while motor vehicle parts fell 8.8%. Contrarily, February marked the fifth consecutive rise in imports, at 0.88%, totaling C$71.63 billion.

(With inputs from agencies.)