Mixed signals for Canada's export slump: tariffs, oil, metals and alternative shipping data

Canada's worse-than-expected GDP print made headlines recently, given its economic integration with the US -- its biggest export market. The figures for Q2 (which followed Donald Trump's March imposition of tariffs on Canadian exports) showed the economy contracted QiQ 1.6% on an annualized basis.

Given Canada's traditional strength in the resource sector, we've tapped the Bank of Canada's weekly commodity price index to show the effect weak oil prices might have had on exports in Q2 -- and get an early signal of what might be coming when Q3 figures are released.

The commodity price index has historically moved in broad alignment with Canada's export trends; we've shown this by charting total goods exports. We've highlighted the Q2 period, when lower energy prices dragged down the commodity index. We've highlighted how every month in that quarter saw a contraction in exports.

Looking to the current quarter, metals and minerals prices have driven the commodity index into semi-positive territory, despite oil's continued weakness. That could push exports back into growth. (Global copper prices, for instance, have been rising for about a month on optimism about higher demand and less supply in Asia.)

Next, we consider an alternative dataset from Marine Traffic: high-frequency shipping data, which we've also correlated with goods exports. It's striking a pessimistic tone for Canadian exports in Q3. Since June, the year-on-year growth rate for vessels calling at Canadian ports has been steadily slowing, and dipped into negative territory in August.

US tariffs on Canada currently vary by sector; energy and potash are mostly exempt from US tariffs as they are compliant with CUSMA, the trade deal Trump signed in his first term. Among other key Canadian export industries, much aluminum and automotive production is also "CUSMA compliant." While some estimates* say 90% of Canadian exports goods are CUSMA-compliant, the Trump administration's increased scrutiny of international supply chains has increased the rules-of-origin certification burden.

*See Torys LLP, "Canada rolls back retaliatory tariffs," Sept. 2, 2025. https://www.torys.com/our-latest-thinking/publications/2025/09/canada-rolls-back-retaliatory-tariffs

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