Published: Fri, May 04, 2018
Economy | By

Statistics Canada says trade deficit hit record $4.1 billion in March

Statistics Canada says trade deficit hit record $4.1 billion in March

Canada's trade deficit hit a record 4.14 billion Canadian dollars (about 3.21 billion US dollars) in March as imports increased more than exports, Statistics Canada said on Thursday.

Hence, the Department of Commerce's assumption that net trade had contributed 0.2 percentage points to the rate of GDP growth during the first three months of 2018 would likely be revised away.

The deficit was more than double what analysts had forecasts, and marked a month of record trade with countries other than the United States, as well as a continued narrowing of Canada's surplus with its southern neighbor and biggest trading partner. Economists surveyed by The Wall Street Journal had expected a slightly larger March deficit of $49.6 billion.

Exports rose in March to a record $208.5 billion, led by shipments of civilian aircraft and soybeans.

The global trade figures are measured on a balance-of-payments basis after seasonal adjustment, and the country-by-country and regional breakdowns are based on unadjusted customs-cleared data.

China, which denies it coerces such technology transfers, has threatened retaliation in equal measure, including tariffs on U.S. soyabeans and aircraft. Wheat exports were up 52 percent.

Imports of consumer goods decreased by $0.9 billion.

More broadly, the US trade gap has widened this year, increasing 18.5% in the first three months of 2018 compared with the same period a year earlier.

Despite the reduction in March, the trade gap is up 18.5 percent to $163.4 billion so far this year.

Imports dropped 1.8% in March, "starting to reverse the surge which followed the hurricanes last summer, when wholesalers and retailers had to rebuild inventory very quickly", Pantheon Macroeconomics chief economist Ian Shepherdson said in a note to clients. Other notable increases were in imports from the Netherlands and Germany.

However, the government statistical agency noted higher than usual import levels of light trucks, as well as increased imports of clothing, footwear and accessories, and pharmaceutical and medicinal products.

The U.S. dollar.DXY was little changed, consolidating some of its recent gains, after the Federal Reserve on Wednesday held interest rates steady but stayed on course to hike in June.

The release of the report came as US Treasury Secretary Steven Mnuchin is leading a delegation to China for highly anticipated trade talks. Imports from China fell 2.1 percent. More American-made goods were sent to China in March and fewer Chinese goods were shipped to the U.S.

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