U.S. Trade Deficit With Canada at Smallest Amount Since 2020, Notes BMO

09:31 AM EDT, 08/06/2025 (MT Newswires) -- The United States trade deficit on goods & services narrowed to $60.2 billion in June, and to $85.9 billion on goods alone, both the smallest since 2023, said Bank of Montreal (BMO).

In almost the mirror image of Canada's data, net exports added a "whopping" 5 ppts to U.S. Q2 gross domestic product, as exports eased only slightly while imports plunged, noted the bank.

This "massive" improvement comes with a giant asterisk, as the trade gap surged in Q1 on the tariff front-running, pointed out BMO.

For the entire first half of 2025, the U.S. trade deficit widened to $735 billion from $638 billion in the second half of last year. On a seasonally-adjusted basis, that is the widest half-year deficit on record.

However, bilateral trade with Canada points to a somewhat

different story, according to the bank. The U.S. deficit with Canada narrowed to just $1.3 billion in June, the smallest since 2020.

That accounted for a trifling 1.5% of the total U.S. trade deficit in the month. While some of the small June deficit reflects a correction from front-loading early in the year, even the H1 gap with Canada narrowed to $27.5 billion non-seasonally adjusted, the smallest in five years.

For comparison, here's the H1 deficit with: Mexico $96.2 billion; China $111.5 billion; the EU $147.2 billion; Japan $34.5 billion; Vietnam $81.3 bil0lion; Taiwan $56.2 billion; and Switzerland $47.8 billion.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.