Prime Minister Mark Carney has emphasized the need for Canada to diversify its trading partners, but economists have warned that will take time.Christinne Muschi/The Canadian Press
For all the talk in Canada about the need for trade diversification, exports to non-U.S. markets declined for the second month in a row in July, a stark reminder that the push to reduce the country’s exposure to its largest, yet unreliable, trading partner will be a long process.
Exports to countries other than the U.S. fell 8.6 per cent in July from the month before, after a 4.2-per-cent drop in June, according to Statistics Canada.
As a result, non-U.S. exports as a share of total Canadian shipments to the world dropped back to where they were in October, before the election of President Donald Trump.
Prime Minister Mark Carney has repeatedly emphasized the need for Canada to diversify its trading partners. Last month he announced $500-million in spending to find new markets for Canadian lumber and touted exports on trips to Germany, Poland and Latvia last week.
Yet from the start of the trade war, economists have warned it will take considerable time for Canada to establish stronger trade ties with the rest of the world.
Indeed, the months since Americans put Mr. Trump back in the White House with a mandate to build a trade wall around the U.S. have been a roller coaster for Canadian exporters.
After a rush to move goods into the U.S. before tariffs hit, Canada’s southbound exports plunged as tariffs raised the prices of certain products, in particular steel and aluminum. However, total exports to the U.S. have begun to bounce back on higher shipments of oil and passenger vehicles, Statscan said.
At the same time, the rise in non-U.S. exports during the first half of the year was in large part driven by a surge in gold shipments to the United Kingdom. Exports to most of Canada’s major trading partners have remained flat.
One exception is oil. Since the expanded Trans Mountain pipeline began operating in May, 2024, the share of Canadian crude going to non-U.S. markets has soared, hitting 7.9 per cent in July, up from an average of just 2.7 per cent in 2023.
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