Canada trade deficit hits record Can$4.1 bln in March

Canada Posted Largest Trade Deficit on Record in March

In March, Canada's total trade with countries other than the United States reached a record 31.2 billion Canadian dollars, with imports increasing 11.5 percent and exports up 11.4 percent.

Canada's trade deficit hit a record 4.14 billion Canadian dollars (about 3.21 billion USA dollars) in March as imports increased more than exports, Statistics Canada said on Thursday.

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.

Trump has vowed to bring down America's massive deficits, which he blames on bad trade agreements and abusive practices by US trading partners.

According to Statistics Canada, imports rose 6.0 percent to a record Can$51.7 billion in March, while exports increased 3.7 percent to Can$47.6 billion. But that was offset by a $69.5 billion deficit in the trade of goods. He recently slapped 25 per cent import duties on steel and 10 per cent on aluminium.

The president views trade deficits as a sign of economic weakness that can be brought down by more aggressive trade policies. The economy grew at a 2.9 percent rate in the fourth quarter.

Interesting enough the United States is also beginning to pull investments Canada once use to get as a recent report from RBC states that investments are leaving Canada "in real time" for the United States.

The government reported last week that trade contributed 0.2 percentage point to the first quarter's 2.3 per cent annualised growth pace.

Exports also showed broad strength, with nine of 11 sectors rising. "Nevertheless, we anticipate that improved momentum, stronger demand from the USA, and a sub-80-U.S. -cent loonie should encourage a rebound in Canadian exports in the second quarter", said Fotios Raptis, senior economist at Toronto-Dominion Bank, in a research report.

Meanwhile, gains in imports of computer equipment (up 13 per cent), medium and heavy vehicles (up 9 per cent), and industrial machinery and equipment (up 3 per cent) suggested a solid pick-up in business investment.

Imports of goods and services fell 1.8% in March to $257.5 billion. After improving from 2011 to 2016, but worsening in 2017, the NAFTA first-quarter 2018 goods deficit is up slightly relative to the first quarter of 2017 - an increase from $49.1 billion to $49.6 billion.

The trade gap has continued to rise since Trump entered the White House partly because the USA economy is strong and American consumers have an appetite for imported products and the confidence and financial wherewithal to buy them.

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