Canadian Prime Minister Mark Carney is pushing an ambitious trade diversification strategy aimed at reshaping Canada’s global economic ties, but his effort faces a major constraint: the country’s deep reliance on the United States as its dominant trading partner.
Carney has moved aggressively to broaden Canada’s commercial relationships in response to sweeping U.S. tariffs under President Donald Trump, positioning Ottawa as a potential bridge between Europe and the Asia-Pacific. Yet nearly 70% of Canadian exports still flow to the U.S., underscoring how difficult it will be to reduce exposure to Washington’s increasingly unpredictable trade policy.
The push gained momentum last week when Carney signed a trade agreement with China, a step that goes further than recent moves by many European allies, according to Reuters. The deal reflects Ottawa’s bid to pursue smaller, targeted agreements — known as plurilateral deals — rather than relying solely on large multilateral frameworks.
Carney, a former governor of both the Bank of Canada and the Bank of England, won last year’s election on a promise to shield the Canadian economy from U.S. tariffs and repeated threats by Trump to annex Canada.
Speaking in Doha ahead of the World Economic Forum in Davos, Carney said global trade norms were under strain.
“A number of the multilateral relationships, institutions, rules-based systems, are being eroded by various decisions of various countries, the United States included,” he said.
Carney has argued that Canada’s best path forward lies in building coalitions among like-minded countries willing to cooperate on trade, investment, and security.
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“Where there is progress, and where Canada and like-minded countries are looking to make progress, is through plurilateral deals,” he said, signaling support for agreements involving smaller groups of nations rather than sweeping global accords.
Before arriving in Davos on Monday, Carney traveled extensively, visiting countries that Canadian leaders have historically overlooked. In Doha, he pledged deeper cooperation on defense and security and said negotiators had made headway on an investment promotion agreement, according to Reuters.
The prime minister has also cast Canada as a connector between major economic blocs. “Canada was already advocating to be a bridge between the European Union and Pacific Rim nations,” Carney said.
Foreign Minister Anita Anand echoed that message, framing Canada’s outreach as a response to mounting geopolitical volatility.
“In this moment of volatility, Canada will step up and lead,” Anand told Reuters in an interview in Doha. “We will make sure that we are bringing countries to the table who will assist in this role.”
Her comments come as Trump’s foreign policy stance grows more confrontational. The U.S. president has recently intensified pressure on Denmark over Greenland, prompting the European Union to consider retaliatory measures, according to Reuters and the BBC.
Canada’s diversification effort mirrors steps taken by the EU, which has accelerated trade talks amid rising tensions with Washington. After 25 years of negotiations, the bloc finalized a trade deal with Mercosur, concluded an agreement with Indonesia last September, and updated existing pacts with Mexico.
The EU has also resumed negotiations with Malaysia, the Philippines, the United Arab Emirates, and India, aiming to reduce dependence on any single market.