09:22 AM EDT, 08/05/2025 (MT Newswires) -- Canada's merchandise trade deficit was little changed at $5.9 billion in June from a revised $5.5 billion -- previously also $5.9 billion -- in May, said Bank of Montreal (BMO) after Tuesday's data release.

Exports were up 0.9% month over month, led by energy (+3.8%, as higher energy prices helped drive the first increase since January) and farm, fishing, and intermediate food products (+6.7%). Meantime, higher tariffs on steel and aluminum, along with a decline in gold from May's surge, weighed on exports of metal and non-metallic mineral products (-3.4%).

Auto exports fell 4.2%, and are now down 8.5% y/y alongside slower domestic production.

Imports rose 1.4% month over month for their first increase in four months thanks to a one-time shipment in industrial machinery and equipment (+27.7%) destined for an offshore oil project in Newfoundland. Excluding this category, imports were down 1.9%.

In volume terms, exports plunged 31.1% a.r. in Q2 while imports were down 6.1% annualized. Unsurprisingly, BMO expects trade to weigh heavily on growth as trade uncertainty peaked in the second quarter.

Separately, the services trade deficit clocked in at $700 million from $900 million in May. Altogether, Canada's overall trade deficit was little changed at $6.5 billion in June.

Despite the usual volatility, Canada's trade figures came in line with expectations for June. While trade flows have recovered a touch from the spring, normalization is unlikely until the Canada-U.S. relationship stabilizes, added the bank.