Canada’s move away from exporting to the United States in 2025 was driven mostly by gold shipments. If you exclude gold, the rise in exports to non‑US partners looks much smaller. Overall, Canada’s exports have had trouble growing over the past year, even as shipments shift to other markets. Higher gold prices raised the dollar value of exports, including gold that Canada was already sending overseas.

Gold Driven Export Shift

The US trade deficit did not change much in 2025, but trade flows and the mix of products did. Canada’s export data showed these shifts most clearly. Some tariffs are being challenged in court, which could lower global tariff levels. Meanwhile, targeted tariffs in certain sectors continue to disrupt trade. Canada’s tariff outlook is tied to the upcoming USMCA review. USMCA exemptions pushed firms to meet compliance rules, and sector‑specific US tariffs now account for most of Canada’s effective tariff rate. In 2025, Canada’s “export diversification” was largely a gold story. That made the headline numbers look stronger than the underlying trade picture. It also suggests the economy is more fragile than it appeared. Attention now turns to the political risks around U.S. trade.

Usmca Review Market Risk

The upcoming USMCA review is the biggest near‑term risk factor for the Canadian dollar. The 2017–2018 NAFTA talks drove swings of about 10% in USD/CAD, showing how volatile this process can be. Recent reports also show one‑year implied volatility on CAD options climbing above 9%, which suggests traders are already pricing in this uncertainty. Traders may want to look beyond broad index positions and focus on sectors most exposed to targeted tariffs. Auto parts and manufacturing are especially vulnerable, making up more than 15% of Canada’s goods exports to the U.S. in the last quarter of 2025. Possible hedges include buying put options on Canadian industrial ETFs or shorting futures on the S&P/TSX Capped Industrials Index to protect against negative review headlines. The run‑up in gold prices in 2025 helped support trade data, but it may not support the currency this year. Other major exports, such as oil, face their own price pressure. Without assured preferential access to the U.S. market, Canada looks more exposed. That makes any negative outcome from the USMCA review a much larger risk. Create your live VT Markets account and start trading now.

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