Canada's international merchandise trade deficit unexpectedly narrowed further in July, as exports rose to a new record level on the strength of energy products, Statistics Canada reported.
Canada posted a seasonally adjusted trade deficit of C$114 million in July, lower than the revised C$743 million trade gap in June and Econoday's forecast of a C$1.2 billion deficit.
July's trade deficit was Canada's smallest since December 2016, when the country had its most recent global trade surplus.
Total exports increased in monthly terms to a record C$51.27 billion from C$50.86 billion, despite declines in six of 11 product categories. Exports of energy products hit at their highest level since September 2014, climbing to C$10.28 billion from C$9.79 billion.
Total imports fell to C$51.38 billion in July from C$51.60 billion in June, with decreases recorded in seven of 11 product categories. Aircraft and other transportation equipment and parts, as well as metal ores and non-metallic minerals, posted the biggest declines.
In July, Canada posted its largest trade surplus with the U.S. since October 2008 at C$5.35 billion, up from C$4.09 billion in the previous month. Exports rose to C$38.42 billion from C$37.20 billion, while imports edged down to C$33.07 billion from C$33.11 billion.
Following declines in June, exports of steel and aluminum products to the U.S. that were subject to new U.S. tariffs jumped 16.4% and fell 2.0%, respectively, in July.
Canada's trade deficit with countries other than the U.S. widened to C$5.5 billion in July from C$4.8 billion in the previous month. Imports decreased 1.0% to C$18.3 billion, and exports fell 6.0% to C$12.8 billion.