Canada's trade deficit nearly triples to $3.6B in June

Canada's trade deficit nearly triples to $3.6B in June

Canada's trade deficit nearly triples to $3.6B in June

Canada's trade surplus with the United States narrowed to $2.2 billion in June from $3.5 billion in May, the smallest surplus since June 2016.

The trade deficit with other nations contracted 5.9% from a month earlier to $43.64 billion, the Commerce Department said Friday. "June exports were $194.4 billion, $2.4 billion more than May exports", the announcement reads.

The goods deficit with Mexico slid 18.3 percent in June to $6 billion.

In a research note sent to clients following Friday's release, Michael Pearce at Capital Economics said: "Real goods exports increased by a strong 1.6% m/m, benefiting from strong global growth and the weaker dollar".

Exports of goods decreased just over $1.7 billion to $129.0 billion in June, driven by a $0.5 billion increase in petroleum products. Imports of capital goods rose, a possible sign of higher business investment spending. Exports to China fell 4.7 percent.

"Even allowing for an upturn in imports, net trade should be broadly neutral for growth this year, after subtracting 0.5%-pts or so from annualised GDP growth over the previous three years". There were decreases in imports of industrial supplies and materials.

The U.S. still imports more goods and services than it exports, and the broader trend shows a widening deficit.

Exports of goods reached the highest level on record in June, after inflation. Trump has complained NAFTA encourages USA manufacturers to move to Mexico to take advantage of cheaper labor.

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