Merchandise Trade December 2024: Trade with the U.S. holds supreme.

“Canada’s merchandise exports have held strong again this month, widening our trade surplus, giving a boost to our fourth-quarter GDP growth. Even though a weaker Loonie is skewing the numbers a bit, it’s making Canadian products more attractive. U.S. companies purchased more Canadian goods compared to last year, possibly to get ahead of President Trump’s tariff threats last November. That said, the trade relationship between Canada and the U.S. is certainly going to be put to the test this year.”

Headline

Canadian nominal merchandise exports grew 4.9% in December, with volumes rising 2.6% on the month. Merchandise imports grew 1.8% narrowing the trade deficit from $544 million to $323 million. Export values were once again supported by a weaker Loonie, as the Canadian dollar depreciated 1.3 cents against the U.S. dollar in December.

Key Takeaways

• 8 of 11 categories contributed to an increase in December exports. Energy exports led the way, growing 9.5% as stable oil prices supported trade values. Metal and non-metallic mineral products rose 9.2% with scrap metal, nickel, and non-ferrous metals supporting the category. Motor vehicles and parts rose nearly 4%, their highest level since May 2024, as temporary holiday closures didn’t impact exports as much.
• Services exports were up 0.8% in December, with imports down 1.2%.
• Overall monthly exports of goods and services rose 4.1%, while imports increased 1.6% which reversed the trade deficit of $1.4 billion in November to a surplus of $641 million.
• Merchandise imports increased in December by 2.3% due to higher imports of consumer goods, metal and non-metallic minerals, and industrial machinery and equipment.
• Exports to the United States rose 5% due to higher energy products. With exports growing $2.5 billion compared to November, the trade surplus with the U.S. widened again from $8.2 billion to $11.3 billion (the largest surplus since June 2022). Exports to other countries grew in December by nearly 5% with Germany, Norway, Japan, and Switzerland the top destinations.
• On an annual basis, Canadian trade posted a $7.2 billion deficit in 2024 with exports up 1%, compared to import growth of nearly 2%. Excluding metal and non-metallics, which carried exports in 2024, our export performance wasn’t great, falling 0.7%.

Implications

• The fourth quarter GDP will be supported by real net trade growth of about 0.7%.
• A weaker Canadian dollar will continue to support export values. In U.S. dollars, exports still increased 3% compared to imports being up only 0.4%.
• Revisions to November’s import data were large, adding $800 million on the import side with only $100 million in revisions on November exports, as the CBSA Assessment and Revenue Management updates continue to impact trade data.

Sources: Statistics Canada; Canadian Chamber of Commerce Business Data Lab