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Canada’s trade surplus with the U.S. helped the northern nation avoid a deeper overall deficit, underscoring the importance of its biggest trading partner as President-elect Donald Trump threatens crippling tariffs.

The country’s total imports exceeded exports for the eighth straight month in October, bringing the trade deficit to C$924 million ($658 million), Statistics Canada reported Dec. 5. That’s roughly in line with the median estimate in a Bloomberg survey, and down from C$1.3 billion in September.

Total exports grew 1.1% in October, led by gold, after three straight monthly declines, while imports rose 0.5% on higher metal ore purchases. In volume terms, exports were up 0.4% and imports edged up 0.3%.

While Canada’s trade surplus with the U.S. narrowed slightly to C$6.2 billion from C$7.9 billion in September, the U.S. remains by far its largest trading partner. In October, the U.S. bought 73% of Canada’s exports and made up 62% of the northern nation’s imports.

Thanks for dinner last night, President Trump. I look forward to the work we can do together, again. — Justin Trudeau (@JustinTrudeau)

The numbers make clear just how exposed Canada is to the U.S. economy and policies. Trump’s threat of 25% tariffs on all Canadian goods has raised alarm among government officials and business groups, with the former trying to placate the incoming president’s border security concerns and the latter arguing Canada can help boost U.S. production and weed out unfair trade.

Trump views the Canada-U.S. trade balance as unfair to his country’s economy, even though Canada is the biggest oil supplier to the U.S. and sells it at a discount to West Texas Intermediate, the benchmark for American oil. During a meeting with Prime Minister Justin Trudeau at Mar-a-Lago last week, Trump complained that Canada was “ripping off the U.S. to the tune of $100 billion,” Fox News reported. Canada’s surplus with the U.S. was about $72 billion over the past 12 months.

While the current trade surplus isn’t near the record high seen in 2022, it’s significantly higher than during Trump’s first term. At that time, Trump used tariffs as a tool to redirect trade flows. His renegotiation of the North American trade pact was aimed at rebalancing trade with Canada and Mexico, but U.S. deficits continued to rise even after he inked the agreement in 2018.

Canada and the U.S. have one of the world’s largest bilateral trading relationships, worth about $2.6 billion in goods and services daily. Canada’s economy depends on its ability to sell energy, cars, minerals and other goods to the U.S.. Its consumers and businesses also rely heavily on U.S.-made imports.

Trevor Tombe, a University of Calgary economics professor, estimates a 25% tariff would shave off about 2.6% from real GDP annually and drive Canada into a recession next year.

In the report Dec. 5, Statistics Canada cautioned that due to delays in the receipt of some import data, estimates were made and so that side of the balance could see more significant revisions than normal in the months ahead.

“The trade data is difficult to dissect given the possibility of higher-than-normal revisions,” Shelly Kaushik, economist at Bank of Montreal, said in a report to investors. “For now, we expect merchandise trade to be roughly neutral for growth in the fourth quarter, while the outlook for 2025 is clouded by trade and tariff uncertainty.”

October’s rise in exports was driven by a surge in gold shipments to the U.K. and Hong Kong. The agency noted that precious metals shipped from Canada — mostly unwrought gold — rose 20.9% that month as gold prices hit an all time high of $2,788 per ounce.

Andrew Grantham, an economist at Canadian Imperial Bank of Commerce, pointed out the export increase was far from broad-based.

“Eight of 11 product sectors actually posted declines on the month, and export volumes were up by a more modest 0.4% as price increases led much of the nominal gain,” he said in a note to investors.

A depreciating dollar also helped lift exports for the first time since June, said Andrew DiCapua, economist with the Canadian Chamber of Commerce.

“We expect a pickup in trade over the next few months as companies stockpile inventories to prepare for President Trump’s 25% tariff on Canadian exports to the U.S.,” he said in a statement. “Export volumes remain positive in the third quarter, but there’s much uncertainty about trade prospects.”