Canada reports record trade deficit in April due to US tariff policy

Canada recorded its largest-ever trade deficit of 7.1 billion Canadian dollar ($5.2 billion) in April, dramatically exceeding analyst expectations. Reuters analysts had anticipated a much smaller deficit of 1.5 billion Canadian dollar ($1.1 billion), but the actual figures came in more than four times higher than projections.

The unprecedented deficit was primarily driven by a significant 15.7% drop in exports to the United States, Canada's main trading partner. According to Ross Prusakowski of Export Development Canada, the tariffs imposed by President Trump have dealt a severe blow to Canadian manufacturers. The situation was further exacerbated by declining oil prices and appreciation of the Canadian dollar. While exports to other countries increased by 2.9%, this growth failed to compensate for the losses in trade with the US.

The automotive sector was particularly hard hit, with vehicle exports plunging 22.9% and auto parts shipments down 17.4%. Gold imports provided some balance to the trade figures, though overall imports still decreased by 3.5% during the period.