December sees large U.S. trade deficit while Canada's balance moves into surplus
December’s US trade deficit of $98.4bn from $78.9bn in November is even wider than expected and the widest since March 2022. Exports fell by 2.6% after a 2.7% November increase while imports rose by 3.5% for a second straight month.
Goods exports fell by 4.2% versus 4.5% in the advance report while goods imports rose by 4.0% versus 33.9% in the advance report. Strong imports may reflect precautionary gains ahead of threatened tariffs but the weak month for exports is disappointing, though needs to be seen alongside a strong November.
The services surplus slipped as assumptions for services trade in the Q4 GDP report had suggested. Service exports rose by 0.5% after a 1.0% increase in November while service imports rose by 1.4% after a 0.3% November increase. December’s dip in the services surplus did not fully erase a November increase.
December saw Canada record its first trade surplus since February 2024, of C$0.71bn from a November deficit of C$0.99bn. Exports rose by 4.9% and imports rose by 2.3%, with the gains in real terms being 2.6% and 0.2% respectively. That suggests greater fear over US tariffs on Canadian exports than any potential Canadian retaliation.
