Canada trade surplus jumps to C$4.2bn in August

Canada's trade surplus rose to CAN$4.2 billion in August from CAN$787 million in July, Statistics Canada said Tuesday, as exporters increased shipments to the United States before new tariffs took effect late in the month.

It was Canada's sixth monthly surplus in a row. Exports to the United States rose 8.1 percent in August, pushing Canada's trade surplus with the US to CAN$11.2 billion, almost double the July figure.

Statistics Canada said it was the largest positive monthly change ever observed in Canada's trade balance with the United States.

US President Donald Trump announced new tariffs in July. They took effect on August 22 after Canadian Prime Minister Mark Carney broke off trade negotiations.

Exports to countries other than the United States fell 8.5 percent in August after rising 8.2 percent in July, Statistics Canada said.

TD Bank economist Marc Ercolao said the trade outlook remained clouded by bilateral friction and said a major negotiating breakthrough before year-end appeared unlikely. CIBC economist Katherine Judge said Canada's trade position was likely to deteriorate and exports would remain under pressure in the fourth quarter unless a trade deal with the United States is reached.

Ottawa retaliated against the US tariffs in early September by imposing its own matching tariffs.