Trade Deficit Narrows to $924 Million in October

Key insights

In October, exports of metal and non-metallic mineral products posted larger gains than all other product categories. A sharp rise in exports of unwrought gold, silver, platinum group metals, and their alloys (+20.9 per cent) was the main driver behind the monthly increase in this product category. Higher exports of refined gold and higher transfers of gold to the United Kingdom and Hong Kong were responsible for the monthly increase. Additionally, exports of consumer goods contributed to the monthly gain. Exports of pharmaceutical products were up 36.8 per cent in October with most of this growth coming from increased shipments of medicaments to the United States.

There is some uncertainty around the near-term future of Canadian trade. President-elect Donald Trump stated he wants to impose 25 per cent tariffs on all Canadian and Mexico imports into the United States on his first day in office. With merchandise exports representing more than 25 per cent of Canada’s GDP, such policies certainly cast a dark shadow on the economy. Universal tariffs on Canadian goods would cause a near-immediate reduction in Canadian exports. Auto manufacturing would be hit particularly hard, given that inputs usually cross the border multiple times. Canadian auto production could be rendered uneconomic.