Trade Update April 3, 2025

In February 2025, Canada reported a merchandise trade deficit of $1.5 billion, according to numbers released April 3 by Statistics Canada.¹ The report comes amid the backdrop of an ongoing tariff dispute with the United States. The deficit represents a significant reversal from the $3.1 billion surplus recorded in January. This shift was driven by a 5.5% drop in exports alongside a 0.8% rise in imports.

Statistics Canada notes that a new digital initiative (CARM) delayed import data, prompting them to estimate values to ensure data completeness.

Exports Drop After Strong Run

Merchandise exports fell 5.5% in February after rising 15.9% over the previous four months. In real terms, exports declined 5.0% month-over-month. The largest drops were seen in energy products (-6.3%), motor vehicles and parts (-8.8%), and forestry products (-10.8%). Year-over-year comparisons weren’t specified, but significant monthly losses suggest a cooling in export momentum, especially to the U.S., U.K., and Germany. Aircraft exports were a rare bright spot, up 29.6%, helping offset some losses.

Modest Import Gains, Data Under Revision

Imports rose for the fifth straight month, increasing by 0.8% in February after a 2.4% gain in January. In real terms, import volumes remained flat (0.0%). Growth was led by motor vehicles and parts (+5.8%), energy products (+5.2%), and industrial machinery (+3.1%). However, due to delays caused by the CARM system, much of the February import data includes estimates and is subject to future revision, making long-term comparisons less reliable at this time.

Trade Surplus with U.S. Narrows, Deficit with Rest of World Widens

Canada’s trade surplus with the United States narrowed from a record $13.7 billion in January to $10.6 billion in February, as exports to the U.S. declined by 3.6% while imports rose by 2.5%. In contrast, Canada’s trade deficit with countries other than the U.S. widened significantly, from $10.6 billion to a record $12.1 billion. This was due to a steep 12.4% drop in exports and a 2.0% decrease in imports from non-U.S. countries, underscoring weakening global trade ties outside North America.

Industry Trade Breakdown

Farm, fishing and intermediate food products

Exports $5.0B, down 6%

Imports $2.9B, down 1.7%

Basic and industrial chemical, plastic and rubber products

Exports $3.5B, down 4.3%

Imports $5.5B, down 3.3%

Forestry products and building and packaging materials

Exports $4.1B, down 10.8%

Imports $3.2B, down 2.4%

Industrial machinery, equipment and parts

Exports $4.7B, down 5.8%

Imports $8.1B, up 3.1%

Electronic and electrical equipment and parts

Exports $3.2B, down 1%

Imports $8.2B, up 1.8%

Consumer goods

Exports $8.7B, down 2.4%

Imports $14.4B, down 1.7%

Tariff Uncertainty Complicates Cross-Border Trade

Tariff uncertainty is creating significant challenges for exporters shipping goods to both the United States and China. Rob Spurgeon, General Manager of Transportation at Canadian Alliance Terminals, outlines the real-world impact these shifting policies are having on businesses.

“Shipments are crossing the border one day and getting hit with $30,000 in tariffs, only for those same tariffs to be removed by Trump the next day,” he says.²

Amidst the constant changes in trade policy and speculation, Spurgeon acknowledges the difficulty of planning with any degree of certainty.

“These are small businesses,” he adds. “It’s murder.”

Flexible Strategies Are Essential—But They Come at a Cost

In this unpredictable environment, exporters must adopt flexible and agile strategies to remain competitive. However, that agility comes at a cost to transportation providers.

“Trucking companies strive to operate as efficiently as possible,” explains Spurgeon. “You can’t just cross the border one day and then sit idle for three more. There are drivers, tractors, trailers, perishables, and overall equipment utilization to consider.”

Still, there are moments when cancelling a cross-border shipment—despite incurring fees from the carrier—makes more financial sense than risking high tariff charges.

Experience and Communication Are Key to Navigating Disruption

While Canadian Alliance can’t control U.S. foreign policy, our decades of experience allow us to guide customers through even the most uncertain conditions.

“Canadian Alliance is known for being responsive and communicative,” says Spurgeon. “This isn’t the first time we’ve seen unexpected events disrupt the supply chain. We’ve learned from past disruptions—and we continue to learn every day.”

A True Logistics Partner for Cross-Border Success

Canadian Alliance is more than just a warehouse. We are a committed logistics and transportation partner, helping exporters adapt and thrive in uncertain times.

Contact Canadian Alliance today and let us help you optimize your supply chain strategy.