The merchandise trade deficit widened to C$4.14 billion from C$2.93 billion a month earlier, Statistics Canada reported Thursday in Ottawa.
The Federal Reserve on Wednesday left interest rates unchanged.
On the import said, Americans paid less to foreign companies for the licensing of intellectual property, and bought fewer foreign-made televisions, semiconductors and computers, helping drive United States imports down 1.8 per cent for the month to US$257.5 billion.
Exports were also up by a significant amount, but not enough to offset the import surge.
In March, the country's trade deficit in goods stood at $35.4bn with China, $12.4bn with the European Union, $7.0bn with Mexico, $5.9bn with Japan, $5.0 with Germany and at $1.5bn with France.
Meanwhile, U.S. exports climbed 2% from February to their highest dollar value on record including larger shipments overseas of civilian aircraft, soybeans, corn and crude oil. Wheat exports were up 52 percent. In a separate report, the Labor Department said initial claims for state unemployment benefits rose 2,000 to a seasonally adjusted 211,000 for the week ended April 28.
Demand for US exports has helped support the manufacturing sector, aided by a weaker dollar and stronger growth overseas.
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China canceled orders for almost 63,000 metric tons of soybeans over two weeks in mid-April, and another 133,718 metric tons for the last full week in April, according to U.S. Department of Agriculture data. Real goods exports were the highest on record. Thursday's report showed the dollar value of bauxite and aluminum imports increased in March from the prior month, as did imports of iron and steel mill products.
The decrease reflected notable declines in imports of consumer goods, computer accessories, telecom equipment, semiconductors and crude oil.
Canadian imports climbed 6% to $51.7 billion in March due to the motor vehicles and parts sector as well as consumer goods.
The Commerce Department noted the goods deficit narrowed to USD69.5 billion in March from USD77.0 billion in February, while the services surplus rose to USD20.5 billion from USD19.2 billion. Even though the negotiations over China's trade practices hasn't become a full-fledged trade war, it looks like the country has already stopped buying American soy, according to a report from Bloomberg.
Exports also recorded strong gains in March, after weakness in the previous three months, led by aircraft and agriculture.
March's drop in core capital goods orders and shipments suggest business spending on equipment is slowing.