Canada's trade surplus in May jumps to a four-year high as US exports surge

The trade deficit with non-US countries has widened even as its US surplus expands

A truck carries a container near a cargo ship bound for Japan at the Centerm container ship terminal at the Port of Vancouver in Vancouver, British Columbia, Canada Aug 3, 2025. REUTERS/Chris Helgren

Canada's trade surplus widened to a four-year high in May, with exports rising for the fourth consecutive month, as goods shipped to the United States topped their highest level since February last year, data showed on Tuesday.

Canada clocked a trade surplus of C$4.24 billion, up 0.9 percent from a revised C$3.41 billion posted in the prior month, Statistics Canada said, as exports of metals and energy byproducts increased during the Iran war.

A 1.5 percent jump in exports to top trading partner the US led to Canada's third consecutive trade surplus.

Analysts polled by Reuters had estimated a trade surplus of C$2.85 billion.

As President Donald Trump's tariffs slammed some critical sectors in Canada, businesses have tried to diversify away from the US, which usually bought almost three quarters of Canada's total exports.

But unwinding decades-old supply chains from the world's biggest market is not easy.

The share of Canada's exports south of the border was almost 70 percent in May. Imports from the US fell by 1.4 percent.

As a result, Canada's trade surplus with the United States widened to C$11.6 billion in May from C$10.3 billion in April, posting its largest surplus since the record high observed in January 2025, the statistics agency said.

Exports to countries other than the US continued to shrink, although at a lower rate in May than April, and imports from non-US countries rose.

This widened Canada's trade deficit with countries other than the US to C$7.4 billion in May.

"The diversification story is not fizzling out," said Prince Owusu, senior economist with Export Development Canada.

He said exports to countries such as Mexico, Brazil and Indonesia have grown and the US share continues to be well below the 75 percent mark seen before the trade shock.

The monthly increase in exports was led by outbound shipments of metal ores and non-metallic minerals, which rose by 16.1 percent, data showed.

This was largely driven by sulphur exports, as Canada benefited from a slowdown in shipments passing through the Strait of Hormuz since the conflict in the Middle East began.

Exports of consumer goods, industrial chemicals, and farm and fishing food products, also rose, StatsCan said.

Energy exports dropped by 2 percent due to lower crude oil volume exports, after a 43.1 percent increase from February to April.

Total imports dropped by 0.2 percent led by an 18.2 percent drop in metal and non-metallic categories imports in May.

The Canadian dollar was trading down 0.06 percent to 1.4214 to the US dollar, or 70.35 US cents. Yields on the 2-year government bonds were up 0.9 basis points to 2.367 percent.