CIBC Doesn't See Trade as A "Big" Positive for Canada's Q3 GDP After August's Deficit Widens

09:02 AM EDT, 10/07/2025 (MT Newswires) -- Canada's trade deficit widened back out in August, as exports dropped off by 3.0% month over month and imports rose by 0.9% month over month, said CIBC.

That left the deficit at $6.32 billion, worse than the $5.6 billion shortfall expected by the consensus, although the widening occurred from a better starting point, as the prior month's deficit was revised narrower, to $3.8 billion, noted the bank.

August's drop in exports followed three consecutive months of gains, with declines seen in eight of 11 categories, including a sizable drop in softwood lumber shipments as duty rates increased on those products being sent to the United States.

Compounding the drop was a pullback in unwrought gold shipments to the U.S. and industrial machinery.

On the import side, the rise was fully accounted for by unwrought gold, as excluding that category would have seen a 1% drop in imports on declines in six of 11 categories.

In volume terms, exports were down by 2.8% month over month and imports were down by 0.3% month over month.

This suggests that the tariff shock is still limiting activity, and net trade won't be as "big" of a positive for Q3 GDP as CIBC previously expected.

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