July Trade Numbers Show Signs of Stabilization
- ClearView Insider
- Sep 8, 2025
- 1 min read
July Trade Numbers Show Signs of Stabilization
Canada’s international trade flows showed early signs of stabilization in July following the Q2 downturn. The merchandise trade deficit narrowed to $4.9 billion, down from $6.0 billion in June.
Exports rose 0.9% month-over-month, marking a third consecutive gain, with energy products and motor vehicles leading the rebound. Exports to the U.S. climbed 5.0% to $45.1 billion, their highest in four months, though still down 10.3% year-over-year.
Imports slipped 0.7%, largely reflecting the absence of a one-time high-value offshore oil equipment delivery recorded in June. Excluding that distortion, machinery and equipment imports rose nearly 5% in July, pointing to resilience in Canadian business investment.
Sector-specific tariffs remain a drag, particularly on steel and aluminum exports, which continue to lag. Still, 88% of Canadian exports to the U.S. crossed the border duty-free in July, supported by CUSMA compliance.
While trade tensions and tariffs continue to create uncertainty, the July data suggests that the sharp drag on GDP from trade in Q2 may not repeat in Q3.
Sources: RBC Economics, National Bank of Canada Economics & Strategy
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