Canada posted a $4.2B goods trade surplus in August. This sixth consecutive monthly surplus came on the back of a 2.5% increase in exports…

… driven primarily by energy (+$852M), consumer goods (+$510M) and industrial (+$445M).

The near-5% jump in energy exports was tied mainly to refined petroleum products, which could be an opportunity going forward, as Hormuz oil flows have normalized but refined product flows remain constrained.

Imports fell 2%, the first down month in the last seven on the back of a 15% drop in passenger cars and light trucks…

… which was caused by a normalization of US activity after a busy July. Together, an 8.1% rise in exports and 2.5% drop in imports from south of the border drove the largest US surplus expansion on record (up $5.2B to $11.2B)…

… although we suspect this will moderate on the back of new tariffs that took effect at the end of August, encouraging Canada to renew its diversification efforts…

… which could have limited near-term impact, as proximity imposes economic constraints to the flow of goods.

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