Canada: Trade surplus explodes as exporters rush to beat tariffs - National Bank of Canada

While the magnitude of the move was surprising, there is no doubt about the cause of the explosion in the goods trade surplus in January, NBC's Jocelyn Paquet reports. 

Canadian companies front-load their shipments to the US to avoid any levies

"Faced with the likely imposition of tariffs by Washington, Canadian companies massively front-loaded their shipments to the United States to avoid any levies. And given recent developments, who can blame them? The same desire was likely behind the rise in imports (as some of our U.S. trading partners likely feared retaliation from Ottawa), although the movement there was much less pronounced."

"Exports to our southern neighbor rose by 7.5%, pushing the trade surplus with our largest trading partner to a new all-time high of C$14.4 billion. Given its cause, this increase is very likely to be fully reversed in the future, but it may nonetheless attract the attention of the new Trump administration, which is particularly averse to trade deficits."

"In terms of GDP growth in Canada, the impact of the explosion in the trade surplus is not entirely clear. A surge in exports such as the one seen in the first month of the year will undoubtedly have a positive impact on growth, but this could be partially offset by a decline in inventories. We will have to wait and see, but chances are that Q1 growth could be much stronger than expected. Of course, this would reflect temporary factors rather than a real improvement in the underlying economy."