C$ pares some gains with trade deficit at record

C$ pares some gains with trade deficit at record

C$ pares some gains with trade deficit at record

Canada's trade deficit unexpectedly widened to a record in March as a surge in automobile imports outpaced a rebound for the nation's exporters.

Canada's trade surplus with the United States, meanwhile, narrowed for a fifth consecutive month, from Can$2.3 billion in February to Can$1.7 billion in March.

President Donald Trump has argued the US should reduce its trade deficits and in March he announced tariffs of 25% on imported steel and 10% on aluminum imports, with temporary exemptions in place for some countries.

The price of oil, one of Canada's major exports, slipped as swelling US crude inventories and record weekly USA production clashed with OPEC supply cuts and the potential for new USA sanctions against Iran.

Demand for US exports has helped support the manufacturing sector, aided by a weaker dollar and stronger growth overseas. Even though the negotiations over China's trade practices hasn't become a full-fledged trade war, it looks like the country has already stopped buying American soy, according to a report from Bloomberg. Thursday's report showed the dollar value of bauxite and aluminum imports increased in March from the prior month, as did imports of iron and steel mill products.

One key factor that has been holding back export growth has been the deep uncertainty surrounding the North American free-trade agreement (NAFTA) talks.

However, the deficit was still up 18.5 per cent in the first quarter compared to the same period past year, at US$25.5 billion.

Prices for U.S. Treasuries were trading higher, while the dollar was little changed against a basket of currencies.

The U.S. central bank on Wednesday left interest rates unchanged and said it expected annual inflation to run close to the Fed's 2 percent target over the medium term.

China canceled orders for almost 63,000 metric tons of soybeans over two weeks in mid-April, and another 133,718 metric tons for the last full week in April, according to U.S. Department of Agriculture data.

However, the government statistical agency noted higher than usual import levels of light trucks, as well as increased imports of clothing, footwear and accessories, and pharmaceutical and medicinal products. Imports from China fell 2.1 percent in March.

Exports also showed broad strength, with nine of 11 sectors rising. That outweighed growth in exports, which rose 3.7 per cent to $47.6-billion, their biggest gain in four months and their second-highest level on record.

Imports of goods and services fell 1.8 percent to $257.5 billion, in part as the boost from royalties and broadcast license fees related to the Winter Olympics faded.

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