Canadian Merchandise Trade (October 2025)

Canada's Trade Books Flip Back to Red in October

• Canada's trade position with the world flipped from a revised $243 million surplus in September to a $583 million deficit in October.
• Exports in October edged forward for a second consecutive month (+2.1% month-on-month, m/m). The increase was almost entirely driven by a 47.4% m/m increase in unwrought gold, silver, and platinum metals. Excluding this category, total exports were down 2.5% m/m with 6 of 11 subsectors registering contractions on the month. Exports to the U.S. (-3.4% m/m) were offset by shipments to non-U.S. markets (+15.6% m/m). 
• Goods imports rose by 3.4% m/m in October, with 8 of 11 subsectors booking a gain. Imports of electronic and electrical equipment (+10.2% m/m) led the way, with imports of metal and non-metallic markets (+9.5% m/m) and industrial machinery and equipment (+5.7% m/m) providing an assist.
• In volume terms, merchandise exports were down 0.4% m/m while imports increased by 2.6% m/m.
• Canada's merchandise trade surplus with the United States narrowed from $8.4 billion in September to $4.8 billion in October.

Key Implications

• Trade data for the month of October continues to show a modest recovery in Canadian export activity, with some caveats. The data has been subject to pronounced volatility in both imports and exports of unwrought gold, which has muddied the overall trend in trade. After a solid contribution to GDP in the third quarter, net trade may pose a slight headwind to growth as import volumes outpaced exports.
• We continue to believe that the peak negative impacts from tariffs are in the rearview mirror especially as consumers and businesses adopt to the new normal. The path forward is still subject to significant risk, notably the upcoming and complex review of the USMCA agreement. The U.S. Supreme Court is also set to rule, possibly as early as tomorrow, on whether the U.S. administration's use of IEEPA tariffs is lawful. The jury is out on what the decision will be, but it may have implications for upcoming negotiations.        

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