Pandemic shutdown of auto sector hits Canada trade hard

Total trade with the United States — Canada’s largest trading partner — fell by Can$23.4 billion, representing more than 90 per cent of Canada’s decreased trade activity in April. — AFP pic
Total trade with the United States — Canada’s largest trading partner — fell by Can$23.4 billion, representing more than 90 per cent of Canada’s decreased trade activity in April. — AFP pic

OTTAWA, June 4 — Canada’s trade plunged at a record pace in April, led by a drop in shipments of motor vehicles and parts after the pandemic shut down the auto sector, the government reported today.

As a result, Canada’s trade deficit widened to Can$3.3 billion (RM10.4 billion), from Can$1.5 billion in March.

Total exports fell 29.7 per cent to Can$32.7 billion while total imports were down 25.1 per cent to Can$35.9 billion.

“These declines, in both absolute value and per centage, are unparalleled, as monthly decreases of this magnitude have never been observed,” Statistics Canada said.

All auto assembly plants in Canada were shuttered as a state of emergency was declared and restrictions were imposed to slow the spread of the coronavirus.

As such, no new vehicles were manufactured in April. The few vehicles that were exported were from inventories or used.

Most auto assembly plants in North America gradually resumed production in May, “which should lead to increased trade in the coming months,” said Statistics Canada.

However, due to physical distancing requirements, challenges in restarting supply chains, and low demand for new cars “a return to pre-Covid-19 production levels is not expected in the near term,” it added.

Exports of energy products also fell by Can$3.6 billion, the largest decrease on record.

This drop was led by a sharp decline in crude oil exports, which fell 55.1 per cent.

Energy imports were also down as confinement measures reduced demand, and refineries were closed.

Because many retail stores were also closed in April, demand for consumer products plummeted too, led by fewer imports of clothing, footwear and accessories.

A number of retail stores that were closed in April, however, gradually reopened in May.

Imports of medical masks from China, meanwhile, pushed up the carpets and textile furnishings category.

Alcoholic beverage imports, up nine per cent, also reached a record in April. And there was a rise in pharmaceutical imports.

Total trade with the United States — Canada’s largest trading partner — fell by Can$23.4 billion, representing more than 90 per cent of Canada’s decreased trade activity in April.

Exports to the United States fell 35.7 per cent, while imports were down 35.3 per cent.

As a result, Canada’s trade surplus with the United States narrowed from Can$3.5 billion in March to Can$2.2 billion in April. — AFP  

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