In the topsy-turvy world of international trade, we saw some interesting numbers on how tariffs are affecting both our imports and exports. They come from June, the first month where the tariffs went into effect.
On the surface, it appears they had no impact. In fact, it was just the exact opposite. Exports were up – topping $50 billion for the first time in Canadian history. Imports passed that mark a few months ago. All of this narrowed the trade deficit with the world – now it’s smallest in a year and a half.
However, when you dig down a bit, there are signs that the uncertainty of tariffs is having an impact.
Sales of products targeted for tariffs – steel and aluminum – were up sharply in the months leading up to their imposition. In June, when they actually came into effect, exports dropped sharply – they were down 37 per cent. But they were up 40 per cent in the previous few months.
In effect, demand was pulled forward, but that is unlikely to remain the case and the effects of tariffs are now going to be real.