Canada's trade gap swells but import, export growth signals economic momentum
- Author: Tabitha Byrd May 05, 2018,
May 05, 2018, 1:32
Economists predicted the March figure would narrow to C$2.25 billion.
The 2018 first quarter goods trade deficit with China and with the world is significantly larger than figures for the first quarter of 2017 even as the March monthly goods deficit with China declined as USA exporters accelerated shipments to beat tariffs that may be imposed relating to the 301 action, which gave an extra boost to us exports overall this month.
The Commerce Department said the deficit declined to $49 billion in March from $57.7 billion in February, the highest level since October 2008.
America and China are engaged in a tit-for-tat dispute over import tariffs, which has sparked volatility in markets since the scrap began in March.
March's decline ended six straight monthly increases in the trade deficit.
That outweighed growth in exports, which rose 3.7 per cent to $47.6-billion, their biggest gain in four months and their second-highest level on record.
Data on worldwide trade can be volatile from month to month, and the figures weren't adjusted for inflation. He recently slapped 25 percent import duties on steel and 10 percent on aluminum.More news: Russia: Chemical weapons inspectors head to Syria site
While Canada's trade deficit increases and overall economy wobbles, our Southern neighbor has rapidly shrunk their deficit and grown their market bringing with it new investments and jobs. The economy grew at a 2.9 percent rate in the fourth quarter. Imports from China fell 2.1 percent.
The declining trade deficit is due in large part to rising exports of civilian aircraft, but soybeans and corn also saw increases, according to the data.
"This report actually seems like good news from a GDP perspective given what it implies for domestic demand", he said in a note to clients. The non-oil trade deficit increased from $573 billion to $756 billion from 2014 to 2017, including the increase in Trump's first year of office from $703 billion to $756 billion.
Meanwhile, imports from China led the increase with 26.6 percent, mainly on higher imports of computers and computer peripheral equipment and of communications and audio and video equipment.
The United States ran a $20.5 billion surplus in the trade of services such as education and banking. Imports slipped 1.8 percent to $257.5 billion.
The trade gap has continued to rise since Trump entered the White House partly because the US economy is strong and American consumers have an appetite for imported products and the confidence and financial wherewithal to buy them.
March's drop in core capital goods orders and shipments suggest business spending on equipment is slowing.