Canadian and U.S. Trade Balances Weakened in March on Energy
May 12, 2010
Because the United States and Canada do so much trade with one another, their trade balances often move in opposite directions. That did not happen in March, however. The U.S. goods and services deficit widened 2.5% to $40.4 billion, and the merchandise trade shortfall climbed 3.5% to $52.9 billion. Canada’s trade surplus plunged 78.0% to CAD 0.254 billion, and energy accounted for 95.6% of the deterioration. Energy imports advanced 10.1% on month in Canada, while energy exports shrank 6.6%, their largest percentage drop in 11 months. The U.S. deficit with OPEC shot up 41.5% to $9.1 billion. The Canadian dollar and U.S. dollar were unmoved by these numbers. EUR/USD is quoted at 1.2699 compared to 1.2674 at 11:00 GMT, 90 minutes prior to the release of the trade figures, and CAD/USD is at 1.0169 versus 1.0173 earlier today.
Despite the latest month’s setback, Canada recorded a CAD 2.28 billion trade surplus last quarter, much better than surpluses of CAD 0.322 billion in the final quarter of 2009 or CAD 0.749 billion a year earlier. The U.S. goods and services trade deficit of USD 116.8 billion in 1Q10 was 26.7% greater than a year earlier. The $9.0 billion bilateral imbalance between the United States and Canada, according to U.S. Commerce Department figures, was USD 3.8 billion (or 72.4%) larger last quarter than in 1Q09. A $9.53 billion deterioration in the U.S. trade balance with North America between 1Q09 and 1Q10 was more than neutralized by a $10.6 billion improvement in trade with Central and South America. OPEC accounted for 56.3 of the incremental growth in the total U.S. deficit between those two quarters, and trade with Japan and the EU was responsible for another 31% of such. Trade with China, by comparison, accounted for just 5.2% of the U.S. deficit’s incremental growth.
Copyright Larry Greenberg 2010. All rights reserved. No secondary distribution without express permission.
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