Monthly trade report: 2025 - June

ISSN 2819-408X

August 2025

Highlights

• In June, Canada’s exports of goods and services increased by 0.9% (see column “m/m” in Table 1), due largely to higher crude oil prices. Imports of goods and services increased by 1.0%.
• Following declines from February to April and marginal growth in May, June saw the first significant rebound in trade with the United States since January, as goods exports rose 3.1% and imports grew 2.6%.
• In contrast, goods exports to other countries fell 4.1% in June, while imports edged down 0.3%.
• In volume terms, total goods exports declined 0.4% in June, while import volumes rose 1.5%.
• After reaching a record high in Q1 (Jan.-Mar.), total exports declined 10.3% in Q2 (Apr.-Jun.), largely due to a front-loading of sales in Q1. Sectors that experienced the most significant declines in Q2 were energy products, motor vehicles and parts, and consumer goods. Quarterly imports fell 2.9% in Q2.
• Despite the large declines in Q2, exports and imports of goods and services were higher in the first half of 2025 compared to the same period in 2024, with exports up 1.3% and imports up 5.3%.

Table 1: Canada’s trade performance – June 2025

Figure 1: Canada’s monthly trade performance

Industry view – exports

Following a 9.2% decline in total exports in April—driven in part by the introduction of the first set of U.S. tariffs on Canadian imports under the International Emergency Economic Powers Act (IEEPA)—exports rebounded by 1.5% in May and 0.9% in June. Overall, total exports declined 10.3% in Q2 after reaching a record high in Q1. For the first half of 2025, total exports were 1.3% higher, compared to the same period in 2024.

The June increase was led by a 3.8% rise in energy product exports—the first monthly gain since January—driven primarily by higher crude oil prices. Exports of farm, fishing and intermediate food products also rose 6.7% in June, with broad-based growth across categories such as live animals, canola, and other crop products. These gains were partially offset by a 3.4% decline in exports of metal and non-metallic mineral products, mainly due to lower shipments of unwrought gold. Exports of unwrought aluminum, as well as iron and steel products, also fell in June, coinciding with increased U.S. tariffs on steel and aluminum. Exports of motor vehicles and parts fell 4.2% in June.

Services exports rose 1.0% in June, as both commercial and travel services increased by 1.2%, while transportation services edged down 0.3%.

Figure 2: Exports by industry and sector (monthly % change)

Industry view - imports

Total imports increased by 1.0% in June, following 3 consecutive months of declines. Despite the monthly gain, imports fell 2.9% in Q2. Year-over-year, total imports were up 5.3% in the first half of 2025.

The June increase was largely driven by a 27.7% rise in imports of industrial machinery, equipment, and parts, reflecting a one-time, high-value import of a module destined for an oil project off the coast of Newfoundland. Excluding this product category, total goods imports were down 1.9% in June. Imports of motor vehicles and parts increased by 2.9%, as higher imports of passenger cars and light trucks were partially offset by lower imports of motor vehicle engines and parts, amid declining vehicle production in Canada. Meanwhile, lower imports of consumer goods (-4.8%), metal and non-metallic mineral products (-7.8%), and aircraft and other transportation equipment and parts (-12.0%) partially offset the overall increase.

Services imports edged down 0.2% in June, as travel (-0.8%) and commercial services (-0.3%) both declined.

Figure 3: Imports by industry and sector (monthly % change)

Global markets

Canada’s 2-way goods trade with the United States increased in June, with exports up 3.1% and imports rising 2.6%. As a result, Canada's goods trade surplus with the United States widened from $3.6 billion in May to $3.9 billion in June. On a year-over-year basis, goods exports to the United States were down 1.4% in the first half of 2025, while imports rose 1.4% over the same period.

After reaching a record high in May, goods exports to countries other than the United States declined by 4.1% in June—the first drop since February. Lower exports to the United Kingdom (unwrought gold) and Japan (iron ore) were partially offset by higher exports to China (canola and copper ore). Overall goods exports to non-U.S. countries were up 14.8% in Q2 and 13.6% in the first half of 2025. Meanwhile, goods imports from countries other than the United States edged down 0.3% in June. Canada's goods trade deficit with countries other than the United States widened from $9.1 billion in May to $9.8 billion in June.

Figure 4: Goods trade by main markets (monthly % change)

Prices and volumes

The increase in the value of Canadian goods exports in June was primarily driven by a rise in export prices, which rose 1.3%. It was supported by a significant increase in the price of Western Canada Select (WCS), the benchmark price for Western Canadian crude oil, which rose by 12.9% in June to US$58.22 per barrel. Meanwhile, export volumes decreased by 0.4% in June, bringing the overall Q2 decline to 9.8% (export volumes in Q1 had only increased 2.2%).

On the import side, volumes rose by 1.5% in June, the biggest monthly increase in 2025, while prices were essentially unchanged (-0.1%). Import volumes increased in only 2 months during the first half of 2025 and declined by 2.1% overall in Q2.

The Canadian dollar continued its appreciation against the U.S. dollar for a third consecutive month, increasing by 1.0 cent in June to reach an exchange rate of 73.1 US cents per CAD. This trend is not unique to Canada, as the U.S. dollar has also depreciated against a basket of the world’s 6 most traded currencies in the first half of 2025.

Figure 5: Goods trade (monthly % change in volume and price indices)

Figure 6: Exchange rate & oil prices

What to watch

• U.S. consumer inflation rose 2.7% in June year-over-year, up from 2.4% in May. Monthly price increases were more pronounced in goods that rely heavily on imports, such as household furnishings, appliances, and toys. Many forecasters expect the tariff passthrough to intensify over the summer, as pre-tariff inventories are exhausted and businesses restock at higher import costs.
• The Bank of Canada held its policy interest rate steady at 2.75% in late July as the Canadian economy continues to exhibit signs of resilience amid high uncertainty and ongoing pressures on underlying inflation. However, the Bank lowered its Canadian GDP growth forecast for 2025 by 0.5 percentage points to 1.3% signaling headwinds.
• In contrast, the IMF revised its 2025 global GDP forecast upward in July to 3.0% (from 2.8% in the April forecast), mainly due to stronger-than-expected front-loading ahead of tariffs early in the year and lower than initially announced effective U.S. tariffs.
• Chinese factory activity fell for the fourth month in July, as export momentum faded and domestic demand remained weak.

Next release: September 4, 2025

Table 2: Trade by industry sector – June 2025

Table 3: Goods trade by main markets – June 2025