Canada's Trade Diversification amid Tariff Tensions

Canadian companies are actively seeking to expand trade connections with allies and smaller markets worldwide in a strategic move to mitigate the economic repercussions of U.S. tariffs, according to government data. Despite this push for diversification, experts caution that Canada still faces constraints in reducing its heavy reliance on U.S. trade.

Export Development Canada's chief economist, Stuart Bergman, emphasized the benefits of diversification but noted the impracticality of completely replacing U.S. trade. Trade statistics reveal a significant decrease in exports to the U.S. by 10 percentage points, primarily affecting sectors like manufacturing, steel, and aluminum.

Meanwhile, Canada has bolstered its exports to the UK, EU, and countries including Australia and Indonesia. Notably, the UK has surpassed China as Canada's second-largest export market. Despite these efforts, Canada remains significantly dependent on U.S. trade, as reflected in fluctuations of trade data and ongoing discussions around potential trade agreements.

(With inputs from agencies.)