BMO Notes U.S. Swaps Trade Deficit With Canada for Other Countries

06:19 AM EDT, 05/07/2026 (MT Newswires) -- Ahead of the upcoming summit between the United States and China, Bank of Montreal (BMO) noted that the bilateral trade imbalance is melting before its eyes.

In fact, the latest trade data for March revealed that the U.S. now runs a larger trade deficit with Taiwan than it does with China, said the bank.

This is no "onemonth wonder," pointed out BMO. Over the past 12 months, the deficit with Taiwan hit US$177 billion, more than tripling in two years, versus US$165 billion with China, which has been nearly sawn in half in two years.

As recently as 2018, China's bilateral deficit with the U.S. was 27 times larger than Taiwan's gap.

Meantime, the deficit with Canada, which was larger than with Taiwan just two years ago, has narrowed to "near insignificance" at just US$33 billion, stated the bank.

In a sense, this is the trade war and the Artificial Intelligence boom all wrapped up in a single chart, according to BMO. Even as tariffs have curtailed imports from two of the biggest suppliers to the U.S. economy --Canada and China -- the voracious U.S. appetite for technological gear -- and especially chips -- has stepped right in and kept the overall deficit nearly flat on net from pretariff levels.

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