Canada's economy shrinks as exports to U.S. plummet

Statistics Canada released data on gross domestic product Friday, revealing that the Canadian economy contracted in the second quarter. This contraction was attributed to significant declines in the export of goods and decreased business investment in machinery and equipment.

Real gross domestic product (GDP), which measures the total monetary value of goods and services produced in a country, declined by 0.4 per cent following a 0.5 per cent gain in the previous quarter. The decline was primarily driven by a 7.5 per cent drop in exports, after a 1.4 per cent increase in the first quarter.

The impact of United States-imposed tariffs was evident in the second quarter, with international exports of passenger cars and light trucks plummeting by 24.7 per cent. Additionally, exports of industrial machinery, equipment, parts, and travel services also experienced declines.

The overall economic outlook for Canada in the coming quarters remains uncertain, as ongoing trade tensions and global economic challenges continue to pose risks to the country’s economic growth. Stay tuned for more updates on this developing story.