This might sound a bit ironic but Donald Trump’s threat of tariffs on Canadian imports to his country actually spurred some growth in our economy. And, as a result, our trade surplus hit a record high.
We have just received the trade numbers for January. They were up, setting a new record for exports and imports. Part of the reason for the export growth was the dropping Canadian dollar but the primary reason was the threat of tariffs.
It turns out American buyers of Canadian materials went on a buying spree, trying to secure as much inventory as they could afford to import from Canada ahead of the tariffs. Basically, they wanted to stock their shelves before Trump’s tariffs raised the cost of goods flowing south from Canada.
The economists at Desjardins expect we will see something similar when February’s numbers are released in April but this is the calm-before-the-storm as we are pulling forward future demand. In other words, the volume of purchase orders will dry up with the imposition of tariffs as US companies work through the inventory they stockpiled in the past couple months.
