This makes it increasingly hard to meet Donald Trump's promise the country to reduce the gap between imports and exports.
Globally, the USA goods trade deficit widened 8.1 per cent in 2017 from the previous year to US$796.15 billion, hitting the highest level since 2008.
Canada's trade deficit increased to $3.2 billion in December as record imports outpaced the growth in exports, Statistics Canada said Tuesday.
Trade was a hallmark issue of President Donald Trump's campaign.
Meanwhile, imports increased 1.5 per cent to a record $49.7 billion in December, boosted by higher imports of energy products and industrial machinery, equipment and parts.
"[.] with imports likely to rise les quickly over the next few months, net foreign trade will be much less of a drag on GDP growth than in Q1". In his first State of the Union address last week, Trump promised to "fix bad trade deals and negotiate new ones". America's merchandise-trade gap with China, the world's second-biggest economy, widened 8.1 per cent in 2017 to a record US$375.2 billion.
The deficit surged 12.1 percent to $566.0 billion in 2017, the highest since 2008. The president recently placed tariffs on imported solar panels and washing machines, sparking concern the United States may prompt trade wars.
Trump has often hit Mexico and China the hardest on trade, and his administration is now in the process of renegotiating the North American Free Trade Agreement (NAFTA).
Imports for December were up by $6.2bn versus November.
These data are released as the Trump administration has made the reduction of the trade deficit one of its priorities.
At the same time, the latest trade figures also reflect the rising value of commodity imports due to higher commodity prices. The huge deficit in the fourth quarter of 2017 prevented the US from reaching the 3.0 percent economic growth in the third quarter, a feat last seen in 2005.