Tab 1

Tab 2

Tab 3 Imports $50.0 billion August 2018 -2.5% (monthly change) Exports $50.5 billion August 2018 -1.1% (monthly change) Trade balance $526 million August 2018

In August, Canada's merchandise trade balance with the world was in a surplus position for the first time since December 2016. The $526 million surplus followed a $189 million deficit in July. Both imports and exports declined in August. Imports fell 2.5%, mainly on lower imports from non-US countries, while exports were down 1.1%, mostly on decreased exports of passenger cars and light trucks.

In real (or volume) terms, imports declined 1.5% and exports fell 0.7%.

Chart 1

Merchandise exports and imports

Aircraft imports fall for a third consecutive month

Total imports declined 2.5% to $50.0 billion in August, with decreases in 7 of 11 product sections. Aircraft and other transportation equipment and parts, consumer goods, and motor vehicles and parts were mostly responsible for the decrease. Year over year, total imports were up 7.3%.

Imports of aircraft and other transportation equipment and parts were down 27.8% to $1.3 billion, the third consecutive monthly decrease. Since the record posted in May, imports of these products have fallen by almost half. In August, there were no imports of commercial airliners, leading to the lowest level of aircraft imports since November 2016. Imports of aircraft engines and parts (-16.9%) also decreased in August, however, the 2018 year-to-date value represents the highest on record.

Imports of consumer goods decreased 3.7% to $10.5 billion in August. Widespread decreases throughout the product groups were led by pharmaceutical and medicinal products (-5.0%), miscellaneous goods and supplies (-3.5%) and furniture and fixtures (-9.5%).

Also contributing to the overall decrease were lower imports of motor vehicles and parts, down 3.8% to $9.0 billion. This marks the fifth consecutive monthly decline, with imports falling 12.2% since the peak in March. Motor vehicle engines and parts (-9.6%) drove the decrease, as atypical planned shutdowns in the automotive manufacturing sector in August contributed to lower imports of auto parts.

Motor vehicles and parts lead the decrease in exports

Exports decreased 1.1% to $50.5 billion in August, despite gains in 6 of 11 product sections. Lower exports of motor vehicles and parts and of metal and non-metallic mineral products were partially offset by higher exports of metal ores and non-metallic minerals. Exports excluding energy products decreased 1.5%. Year over year, total exports were up 15.5%.

Following a 7.9% increase from May to July, exports of motor vehicles and parts fell 6.2% in August to $7.4 billion. Exports of passenger cars and light trucks (-8.9%) were mainly responsible for the decline. As with imports of engines and parts, this decrease coincided with atypical shutdowns in the automotive industry. Year over year, exports of passenger cars and light trucks were down 5.7%.

Exports of metal and non-metallic mineral products fell 6.2% to $5.4 billion in August, the third consecutive monthly decrease. Exports of unwrought precious metals and precious metal alloys (-14.3%) led the decrease for the section. Contributing the most to the decline were lower exports of unwrought gold to the United Kingdom. For the section as a whole, volumes fell 3.8%, while prices were down 2.5%.

These decreases were partially offset by a 20.1% increase in exports of metal ores and non-metallic minerals. After posting a strong decrease in July, exports of copper ores and concentrates (+$187 million) drove the increase in August, mostly on higher shipments to Japan, South Korea and India.

Lower imports from non-US countries contribute to the overall trade surplus

Imports from countries other than the United States fell 4.5% to $17.6 billion in August, the third consecutive monthly decline. Many countries contributed to the decrease, including China (various products), Brazil (bauxite), Belgium (pharmaceutical and medicinal products), Algeria (crude oil) and the Netherlands (motor gasoline). These declines were partially offset by higher imports from Switzerland (copper).

Exports to countries other than the United States were down 0.9% to $12.8 billion. Lower exports to the United Kingdom were behind the decline, principally on decreased exports of unwrought gold and crude oil. Gains in exports to India (copper ores and potash) and South Korea (copper ores) partially offset the decline.

Consequently, Canada's trade deficit with countries other than the United States narrowed from $5.5 billion in July to $4.8 billion, contributing to the movement of the overall trade balance from a deficit to a surplus in August.

Imports from the United States decreased 1.3% to $32.4 billion, mostly on lower imports of aircraft. Exports to the United States declined 1.2% to $37.7 billion, mainly on lower exports of passenger cars and light trucks. Consequently, Canada's trade surplus with the United States in August was essentially unchanged at $5.3 billion. The trade surpluses in July and August were the largest since October 2008.

Exports and imports of products subject to customs tariffs

August marked the third month in which tariffs were applied to exports of steel and aluminum products to the United States, and the second month in which tariffs were imposed on imports of steel, aluminum and other miscellaneous products from the United States.

On a customs seasonally adjusted basis, exports of steel products to the United States that were subject to a 25% tariff rose 6.3% in August, the second consecutive monthly increase. Despite this gain, export levels for these products were down 21.4% in August compared with May, when these steel products were still exempt from tariffs.

Aluminum exports subject to a 10% customs tariff fell 13.2% in August, a third consecutive decline. Prices of the product group unwrought, basic and semi-finished aluminum and aluminum-alloy products, which is comprised mostly of tariffed aluminum, also posted three consecutive monthly decreases since the imposition of US tariffs.

Chart 2

Exports of products subject to US tariffs

Imports of steel products from the United States subject to a 25% tariff fell 12.8% in August, on a customs seasonally adjusted basis. This follows a 38.2% decrease in July and a 32.4% increase in June. Year over year, imports of these products were down 29.0% in August.

Aluminum product imports subject to a 10% tariff were up 2.6% in August. Year over year, aluminum imports were up 13.9%.

After falling 21.7% in July, imports of other miscellaneous products subject to a 10% customs tariff saw little change in August. The July and August levels were the lowest since 2014.

Chart 3

Imports of US products subject to tariffs

Revisions to July exports and imports

Revisions reflect initial estimates being updated with or replaced by administrative and survey data as they become available, as well as amendments made for late documentation of high-value transactions. Exports in July, originally reported as $51.3 billion in last month's release, were revised to $51.1 billion in the current month's release. July imports, originally reported as $51.4 billion in last month's release, were revised to $51.3 billion.

Chart 4

International merchandise trade balance

Products

Customs based data are now available in the Canadian International Merchandise Trade Database (Catalogue number65F0013X).

The updated Canada and the World Statistics Hub (Catalogue number13-609-X) is available online. This product illustrates the nature and extent of Canada's economic and financial relationship with the world using interactive graphs and tables. This product provides easy access to information on trade, investment, employment and travel between Canada and a number of countries, including the United States, the United Kingdom, Mexico, China, Japan, Belgium, Italy, the Netherlands and Spain.

Contact information

For more information, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca).

To enquire about the concepts, methods or data quality of this release, contact Benoît Carrière (613-415-5305; benoit.carriere@canada.ca), International Accounts and Trade Division.