In July, Canada's merchandise imports decreased 5.4%, while exports were up 0.7%. As a result, Canada's merchandise trade deficit with the world narrowed from a revised $4.9 billion in June to $987 million in July.
Total imports decreased 5.4% in July, the strongest percentage decline since January 2022. Overall, imports in 9 of 11 product sections decreased in July 2023 and, as was the case in May and June, imports of unwrought gold were central to the monthly movement. In real (or volume) terms, imports were down 4.3%.
A port strike that significantly affected activity at British Columbia marine terminals began on July 1 and disrupted regular operations for more than 13 days. In July, customs-basis imports that were cleared in British Columbia marine ports were down 18.5% compared with June (not seasonally adjusted). This represented the strongest decline from June to July since 2005. When the data are adjusted for seasonality, widespread declines in overall imports from countries on the Pacific Rim—such as China, Taiwan, South Korea, Peru and Japan—were observed in July on a balance-of-payments basis. Imports of goods that typically arrive through British Columbia marine ports, like consumer goods, electronic products, and industrial machinery and equipment, were down.
Exports leaving British Columbia marine ports also decreased in July, falling 23.0% to their lowest level since February 2020. While declines were observed in overall exports to countries such as Japan, South Korea and India, exports to China posted a large increase. This rise was mainly the result of higher exports of canola, as grain terminals remained active during the strike. Exports of coal, potash, and pulp and paper were among the notable July declines in terms of products typically exported through British Columbia ports.
Canada's international trade may also be affected by this situation in subsequent months as well, as freight backlogs continue to be cleared.
Following declines of 2.7% in May and 3.5% in June, total exports were up 0.7% in July. Although the impacts of the British Columbia marine port strike were evident in the exports of some products, declines attributable to strike activity were more than offset by increases in products less affected by this event. In real (or volume) terms, exports edged down 0.2%.
Imports from countries other than the United States decreased 13.2% in July, the sharpest decline since October 2016. Imports from China (-27.2%) decreased the most in July 2023, with widespread declines among products imported from that country. Notable decreases were also observed in imports from the United Kingdom (gold) and Germany (passenger cars).
Exports to countries other than the United States were down 2.0% in July. Lower exports to Saudi Arabia (other transportation equipment), Japan (various products) and Italy (pharmaceutical products and crude oil) were largely offset by higher exports to China (canola and wheat).
After reaching a record $11.4 billion in June, Canada's merchandise trade deficit with countries other than the United States narrowed to $8.4 billion in July.
Imports from the United States were down 0.6% in July, while exports to that country rose 1.5%. As a result, Canada's merchandise trade surplus with the United States went from $6.4 billion in June to $7.4 billion in July.
This is an excerpt from the 06 September 2023 edition of The Daily from Statistics Canada.