Manufacturing Sales Decline 2.8% in April Amid U.S. Tariffs Impact

OTTAWA – Statistics Canada reported on June 13, 2025, that manufacturing sales experienced a significant decline of 2.8 percent in April 2025, marking the largest monthly decrease since October 2023. This downturn is attributed to the ongoing tariff disputes with the United States, which have had a notable impact on various sectors within the Canadian manufacturing landscape.

The latest figures reveal that manufacturing sales totaled approximately $69.6 billion in April, representing the lowest level since January 2022. This decline marks the third consecutive monthly decrease in sales, with substantial drops reported in key sectors. Specifically, the petroleum and coal products sector experienced a decrease of 10.9 percent, while motor vehicles saw an 8.3 percent decline, and primary metals fell by 4.4 percent.

According to Statistics Canada, the escalation of global trade tensions has been a primary factor contributing to the decline in both prices and volumes in the petroleum and coal products industry. The tariff disputes began in March 2025, but April represented the first full month of tariffs imposed by the United States across numerous sectors, particularly targeting Canada’s steel, aluminum, and automotive industries.

The U.S. administration has since provided some exemptions from the tariffs for goods compliant with the Canada-United States-Mexico Agreement (CUSMA). Conversely, Canada has also implemented relief on its own counter-tariffs for critical manufacturing sectors. Despite these efforts, eight provinces reported decreases in manufacturing sales in April, with Ontario witnessing the most significant tariff-related decline. Several automobile assembly plants in the province had to partially shut down operations due to the uncertainty surrounding the tariffs.

Data from Statistics Canada indicates that approximately half of the manufacturers surveyed reported being affected by the tariffs in some capacity during April, a sentiment echoed by 43 percent of wholesalers. A separate report highlighted that wholesale sales also fell by 2.3 percent in April, with the motor vehicles, parts, and accessories subsector leading the decline.

The agency’s surveys indicated that manufacturers and wholesalers cited price increases, shifts in product demand, and rising expenses for raw materials, shipping, and labor as the most common impacts of the tariffs. Additionally, Statistics Canada reported that Canada faced its largest merchandise trade deficit on record in April, totaling $7.1 billion, as exports fell sharply amidst the tariff imposition.

CIBC Senior Economist Andrew Grantham commented on the situation, noting that both manufacturing and wholesale sales figures for April were weaker than anticipated. This suggests that the flash estimate by Statistics Canada indicating a 0.1 percent increase in real gross domestic product (GDP) for the month could be an overestimation, potentially indicating that the economy started the second quarter with flat or slightly negative growth. Grantham also pointed to signs of declining inventories in the manufacturing data, which could further negatively impact April’s GDP figures.

Statistics Canada is set to release its formal real GDP estimates for April on June 27, 2025. As the impact of tariff disputes continues to unfold, stakeholders across the manufacturing sector remain vigilant and responsive to the evolving economic landscape.

This report was first published by The Canadian Press on June 13, 2025, and has been corrected to clarify that the decline in manufacturing sales marks the third consecutive monthly drop, rather than the previously reported second decline.