Canada's Record $11.2 Billion Trade Surplus With the US in August Was Buyers Racing the Tariffs

On paper, August was the best month for Canadian exporters in a long time. Statistics Canada reported on October 6 that exports to the United States rose 8.1 percent in the month, imports from the US fell 2.5 percent, and Canada’s surplus with its neighbour widened from C$6.1 billion to C$11.2 billion. The agency called it the largest monthly swing in that balance it has ever recorded.

It happened in the month Washington put 50 percent tariffs on Canadian goods. The timing explains it.

The Section 338 duties took effect on August 22, after talks in Washington collapsed, on about C$27.6 billion of Canadian goods with no exemption for products that qualify under the continental trade agreement. Everyone knew retaliation and counter-retaliation were coming. So American buyers pulled orders forward and shipped what they could before the walls went up. Statistics Canada said as much, and CIBC economist Katherine Judge called the jump front-running that will reverse in September. Scotiabank’s read was the same. It also pointed out that steel exports are still about 40 percent below where they were in December 2024, and forestry about 14 percent.

What happened after the surge

The calendar since then has run one way. Canada’s counter-tariffs, matching the American ones dollar for dollar at 15, 25 or 50 percent on roughly 700 US products, took effect on September 8. Within hours, President Trump signed new proclamations. Starting September 15, cement, road salt and some hospital supplies came off the 50 percent list and boats, all-terrain vehicles and some cheeses went on, and the rule that kept the new duties from stacking on top of the steel and auto tariffs was dropped. From September 29, imports of Canadian whey-based dairy, motorcycles and several spirits, wines and beers have been banned outright. The White House also told federal procurement to start removing Canadian products from its purchasing schedules.

The bans cover only about US$1 billion a year of trade, and alcohol importers have already spotted a gap for bulk containers over four litres. Their weight is in the escalation, and the next step is already named. Trump has threatened 50 percent tariffs on Canadian cars and parts at the end of the year, and the auto sector is the one that can hurt. Asked on October 5 whether talks would restart before the US midterms, he said he didn’t know, and that he was in no rush.

Who is paying

A tariff is collected at the border from the importer, which means the 50 percent is being paid by American firms that buy Canadian furniture, plastics, textiles and machinery, and the counter-tariffs by Canadian firms buying the American equivalents. Ottawa’s standing remission order spares US goods bound for health care, public safety, defence, some manufacturing, farming and food packaging. That softens the blow for the importers with lawyers. It does nothing for a hardware chain.

The macro numbers show how narrow the front still is. The tariffed goods are about 5 percent of what Canada sells to the US. RBC’s Nathan Janzen notes that more than 80 percent of Canadian exports still cross duty-free under the agreement. Oil, gas and potash, the three things American refiners and farmers can’t easily replace, have been left alone by both sides. Scotiabank puts the average duty actually paid on Canadian goods entering the US at 3.2 percent in August.

The jobs report on October 9 fits that picture. Canada lost 68,300 jobs in September and unemployment rose to 6.5 percent. Manufacturing shed 12,700 of those, but most of the losses were in education and health care, and economists didn’t find them concentrated in industries that sell to the US. The damage so far is targeted. Wood products, steel, aluminum, dairy and spirits are taking it. The national accounts barely notice.

Ottawa’s bet

Mark Carney has played the long game in public. On October 1 he designated the Alberta-to-West Coast pipeline, now called Pacific Link, a project of national interest, which speeds up federal approvals for an export route that doesn’t end in the United States. He has welcomed talk of Canada becoming the European Union’s first associate member. And polls show Canadians backing the hard line, which narrows what he could sign even if Washington offered something.

Trump predicted in late September that Canada would give in within three or four weeks. Those weeks run out about now. The August surge shows how much American buyers wanted Canadian goods before the price went up. The September and October trade figures, due in November and December, will show how much they still want them after. That’s the number both capitals are actually waiting for, more than any statement from Ottawa or the White House.

For the start of this round, see how the original 50 percent tariff list was built and Carney’s dollar-for-dollar answer.

As of October 11, 2026, no talks are scheduled.