Canada’s trade surplus in May jumps to a four-year high

Canada's merchandise trade surplus widened to a four-year high in May, rising for the fourth consecutive month, as exports 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 ($2.98 billion) in May, up 0.9% from a revised C$3.41 billion posted in the prior month, Statistics Canada said.

This was the third consecutive month of trade surplus for Canada and was led by a 1.5% jump in exports to the U.S., its largest trading partner.

Analysts polled by Reuters had estimated the trade surplus to be at C$2.85 billion.

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

But trade experts have said that while diversification is important, it might take time for many to unwind decades-old supply chains from the world's biggest market.

Exports to the U.S. rose 1.5% to C$53.72 billion, a fourth consecutive monthly increase, taking the share of exports to south of the border to almost 70% in May. Imports from the U.S. fell by 1.4%.

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 U.S. continued to shrink, although at a lower rate in May than April, and imports from non-U.S. countries rose. This widened Canada's trade deficit with countries other than the U.S. to C$7.4 billion in May.

CRUDE OIL EXPORTS FALL

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

This was largely driven by sulfur exports as its shipments passing through the Strait of Hormuz slowed since the conflict in the Middle East began.

Other product sections also saw notable gains in May, with widespread increases observed in consumer goods, industrial chemicals, and farm and fishing food products, StatsCan said.

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

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

The Canadian dollar was trading down 0.06% to 1.4214 to the U.S. dollar, or 70.35 U.S. cents. Yields on the two-year government bonds were up 0.9 basis points to 2.367%.

($1 = 1.4219 Canadian dollars)