Canadian Prime Minister Mark Carney is seeking to position Canada as a leader in a new global trading order by expanding ties beyond the United States, including closer engagement with China, as shifting US trade policies disrupt long-standing alliances.
Carney is pressing ahead with an ambitious plan to reduce Canada’s reliance on the US market by forging new trade partnerships and smaller multilateral agreements.
Last week, he went further than many European allies by signing a trade deal with China, a move that marks a clear divergence from US policy and underscores Ottawa’s push to diversify its economic ties.
The effort comes as US President Donald Trump’s tariffs and aggressive foreign policy stance unsettle traditional trade relationships, prompting countries like Canada to seek alternatives.
Carney’s global outreach
Before attending the World Economic Forum (WEF) annual meeting in Davos, Carney embarked on a global tour, visiting countries that have historically received less diplomatic attention from Canada.
In Doha, he said that multilateral institutions and rules-based systems are being eroded, including by decisions taken by the United States.
“Where there is progress is through plurilateral deals,” Carney said, advocating agreements among a smaller group of like-minded countries.
Foreign Minister Anita Anand echoed this message, saying Canada intends to step up during a period of global volatility and bring partners together to shape a more stable trading environment.
Carney became the first Canadian prime minister to visit China since 2017, describing Beijing as a more predictable partner than Washington.
Canada has also restored diplomatic ties with India and agreed to restart stalled trade talks, while wrapping up trade deals with Ecuador and Indonesia and signing investment agreements with the United Arab Emirates.
Trade Minister Maninder Sidhu said the government will next focus on potential deals with the Philippines, Thailand, Mercosur, Saudi Arabia and India.
Heavy dependence on US trade
Despite these efforts, experts warn Canada’s economic reliance on the US remains overwhelming.
Nearly 70% of Canadian exports still go to the US, compared with just over 20% for the European Union. Economists say reducing US-bound exports by just 10% would require Canada to double exports to several major economies, including China, Germany, France, Mexico, Italy and India.
Carney has pledged to double Canada’s non-US exports over the next decade, a goal analysts say will be difficult to achieve without significantly expanding trade with China, currently Canada’s second-largest trading partner.
Trade experts caution that deeper and faster integration with China carries risks.
William Pellerin, a partner at law firm McMillan, warned that Chinese manufacturers could quickly flood the Canadian market across multiple sectors, raising concerns about long-term economic stability.
China’s exports to the US declined last year but rose sharply to other global markets, adding to worries about competitive pressures.
Exports, energy and uncertainty ahead
Official data shows Canada’s share of exports to the US fell to its lowest level outside the pandemic years in October, though the US still accounted for 67.3% of total exports.
While Ottawa hopes to increase oil exports to Asia, about 90% of Canadian crude currently goes to the US. Economists say this dependence is unlikely to change significantly in the near term, especially as businesses await the outcome of negotiations over the US-Mexico-Canada trade agreement later this year.
