Statistics Canada reported on June 5 that the country’s merchandise trade deficit reached a historic high in April, driven largely by new US tariffs. Canada’s exports fell by 10.8% while imports declined by 3.5%, resulting in a record trade deficit of CAD 7.1 billion. 

The sharp decline in trade with the US was a major factor, as Canadian exports to the US dropped 15.7%, and imports from the US fell 10.8%. The automotive sector, including vehicles and parts, was the largest contributor to the overall drop. 

While trade with the US contracted, Canada expanded its trade with other global partners, reaching record levels outside North America. 

Andrew DiCapua, Chief Economist at the Canadian Chamber of Commerce, described the export decline as being in "free fall," with exports to the US down nearly CAD 15 billion since the beginning of the year. He warned that weakening demand for Canadian goods could further widen the deficit, and that shifting to new markets remains a challenge in key sectors.