Change in Monthly Merchandise Exports to the US

Monthly merchandise exports to the US have dropped by nearly $8.3 billion since the beginning of the year. Trade to other jurisdictions only increased by $232 million offsetting a mere 2.3% of our losses.

I’ve had Canada’s trade data on my mind all week thinking about creating the “perfect” chart to explain what is going on with Canada’s exports. And the truth is, most of the charts are messy and the detailed story is not straightforward. But those simple statistics say a lot.

The US has been Canada’s stalwart trading partner for my entire life. Exports make up roughly 1/3rd of our economy. Prior to the trade war, more than 75% of those exports went to the United States and the other 25% got shipped to the rest of the world.

Because trade with the US has been so steady and certain, Canada has been able to let other relationships be looser; less certain. And the data shows it. Changes in trade with different countries are all over the map. Since January, exports to the UK have increased by 10%. Exports to Germany increased by 40%. At the same time exports to Spain dropped by 40% and to Australia by 4%. We’re going to need to build more steady relationships.

The nation building projects announced this week are focussed on getting goods to external markets or mining natural resources that will eventually be shipped to other markets.

But there is lots of material that might end up stuck in Canada right now. In addition to these long-term projects that will build us up for the future, Canada needs to do the work to link supply and demand across the country.

We’ve already gone through the exercise of reducing interprovincial trade barriers – an exercise that honestly is not likely to deliver much – and I haven’t heard very much about new trade relationships east and west.

The next wave of effort to increase trade between provinces should focus on building the digital and physical infrastructure that is necessary for businesses and people to fill our made-in-Canada shopping carts to the brim.