08:50 AM EDT, 04/03/2025 (MT Newswires) -- Canada's international trade balance swung into deficit territory in February, as the United States tariff front-running efforts in prior months dented demand for exports, said CIBC.

The $1.5 billion deficit released Thursday was in contrast to the consensus expectation for a $3.5 billion surplus, relative to a $3.1 billion surplus in January, which was revised down from $4.0 billion, noted the bank.

February saw a 5.5% month-over-month decline in nominal exports, with 10 of 11 categories posting drops, and a 5.0% retrenchment in volume terms. That followed several months in a row of gains that were catalyzed by U.S. tariff threats, and lower crude prices in February also weighed on exports, stated CIBC.

Imports were up by 0.8% month over month, but in volume terms were flat, a negative indicator of domestic demand.

Although Canada escaped U.S. reciprocal tariffs on Wednesday, the rush in purchases ahead of key tariff announcement dates will likely continue to thwart demand for Canadian exports ahead, and slower U.S. and global growth will also weigh on exports, according to the bank.