NAFTA which was signed in 1994 by the United States, Canada and Mexico removed most trade and tariff barriers between the neighbors, but Trump and other critics have blamed it for deep USA job cuts.
U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $43.7 billion in March, down $0.1 billion from revised value of $43.8 billion in February.
The new figures follow a deficit of $1.1 billion the month before.
"The increase in imports points to improvements in business investment spending and inventory rebuilding, both contributors to GDP", National Bank economist Krishen Rangasamy said in a note to clients. The trade gap narrowed by 0.1% in March from a month earlier to a seasonally adjusted $43.71 billion.
Shortly afterwards, the US administration slapped tariffs on Canadian exports of softwood lumber and complained about Canada's dairy sector, helping to sink the Canadian dollar to 14-month lows.
Imports of goods and services slipped 0.7 percent to $234.7 billion.
As a result Canada's trade surplus with the United States narrowed from Can$4.5 billion in February to Can$4.0 billion in March.
Exports decreased 0.9 percent to $191 billion, the biggest drop since October, led by energy, autos and pharmaceuticals.
On the other side of the equation, imports increased 1.7 per cent to $47.1 billion with gains in seven of 11 sectors.
President Donald Trump was elected on a pledge to reduce America's trade deficits, which he blames on unfair trade practices by China and other countries.
Exports of goods decreased just over $2.0 billion to $126.3 billion in March, driven by a $0.6 billion decline in oil and $0.6 billion reduction in petroleum products. For all of past year, the gap exceeded $500 billion.