U.S. share of Canada’s exports drops to 66%, lowest outside pandemic

By Nojoud Al Mallees

(Bloomberg) — Canada’s trade surplus narrowed sharply in July as declines in gold and energy dropped exports to the U.S. to their lowest proportion since 1997, outside the COVID-19 pandemic.

Canadian exports to the U.S. decreased by 6.6% during the month, which was the steepest percentage decline since April 2025, Statistics Canada reported on Thursday. The overall share of Canada’s exports destined for the U.S. fell to 66.3%.

At the same time, Canadian imports of U.S. goods ticked up 1.8%, mainly because of passenger cars and light trucks. Canada is the largest buyer of U.S.-made vehicles, but the auto sector has been at the centre of a trade dispute since President Donald Trump returned to the White House last year and began putting tariffs on foreign autos. 

The data captures trade flows prior to the recent escalation of that trade war. The Trump administration imposed new 50% tariffs on about $20 billion of Canadian goods on Aug. 22, following the breakdown in negotiations between the two countries. Canadian counter-tariffs are set to take effect next week.

“Today’s trade data suggests that Canadian exports were already waning in July, even before new US tariffs hit, and will probably be a slight negative to GDP in the third quarter even after accounting for some tariff front-running activity during August,” wrote Canadian Imperial Bank of Commerce senior economist Andrew Grantham in a note to investors. 

A new survey conducted by Export Development Canada prior to the latest US tariffs coming into effect found 72% of Canadian exporters planned to enter new markets over the next two years, up from 65% five months prior. Confidence also improved, with the federal agency’s index rising to 71.7 from 69.7 at the end of 2025. 

Canada’s trade surplus with the U.S. narrowed to $5.9 billion in July — the smallest surplus since February — from $10.3 billion in June. 

Total Canadian exports to all markets fell by 2.3% while imports increased by 2.2%, reducing the trade surplus to $769 million, the agency said. The June surplus was revised to $4.2 billion. 

Economists surveyed by Bloomberg had expected a trade surplus of $3.18 billion in July.

Lower exports of unwrought gold, silver and platinum and their alloys fell by 13.1%, due to lower purchases of Canadian-held gold by foreign residents and fewer shipments to the U.S. A decline in prices also contributed to the decrease in gold exports, the federal agency noted.

Energy shipments declined by 4.4% in July, marking a third straight monthly drop as both crude oil prices and export volumes fell.

In volume terms, exports declined by 1.5% and imports rose by 2.2%.

Canada’s exports to countries other than the U.S. increased for a third consecutive month, rising by 7.4% and reaching a record high. 

–With assistance from Mario Baker Ramirez.

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Last modified: September 4, 2026