Is Canada's external position structurally shifting under US repricing?

The latest merchandise balance came in at TK, TK relative to the prior month. Auto exports pulled down on weaker US assembly schedules; energy exports pulled up on price and volume. Non-monetary-gold-stripped variant gives a cleaner momentum read - both lines remain below the cycle average.

The latest quarterly current account was in modest deficit, with goods turning slightly negative on the quarter and services surplus continuing its trend narrowing. Primary income remains the largest single drag - foreign-claim service costs are sticky against a flatter Canadian growth path. Sustained drivers vs one-offs are called out in the blurb.

The US share of Canadian merchandise exports is at TK, down from a mid-70s plateau and continuing a slow secular drift. China and Mexico carry most of the offset on the import side; the UK and Japan have remained roughly flat. The drift is structural rather than cyclical.

We maintain a one-page log of currently effective US tariff actions affecting Canadian exporters: Section 232 follow-ons, Section 301 carve-outs, and bilateral countermeasures where active. The summer 2026 USMCA review window is the live variable; named Section 232 follow-ons from March 2026 are the immediate exposure.

The terms-of-trade index slipped to TK in the latest quarter, with commodity export prices easing relative to the import basket. Still above 100 - net favorable - but the trajectory has rolled over from the late-2024 peak. The income channel from terms-of-trade improvement that supported Q3 2024 has reversed.

Inward direct-investment flows in Q4 remained concentrated in oil and gas extraction, finance, and manufacturing. Outward flows by sector skew further toward finance and real estate. The pattern has been consistent across recent quarters; no new sector has emerged as a marginal source of inward capital.