Canada diversification push targets US trade reliance

Canadian Prime Minister Mark Carney said on Sunday that Canada’s heavy economic dependence on the United States has shifted from an advantage to a risk that needs to be addressed. In a 10-minute video message, he set out a government approach aimed at strengthening the Canadian economy by drawing new investment and pursuing trade agreements with countries beyond its main trading partner.

Carney said the international environment has become more unstable, and pointed to changes in U.S. trade policy as a key factor. He cited tariff increases that he described as echoing measures associated with the Great Depression era, and said those steps have hit Canada’s auto and steel industries. He added that the tariff environment has contributed to uncertainty for investment decisions tied to those sectors.

In his remarks, Carney argued that Canada should broaden its economic relationships to reduce exposure to policy shifts by its largest trading counterpart. He framed diversification as a way to manage risk rather than a break with existing ties, and said the government’s plan is designed to make the economy more resilient amid a more volatile global setting.

The statement came after recent special election wins that delivered a majority for Carney’s government. It also arrives ahead of a scheduled review of the North American Free Trade Agreement (NAFTA) in July, a milestone that could shape the near-term trade agenda and the tone of discussions with regional partners.

Carney said his government intends to provide regular updates on efforts to reduce reliance on the U.S. market. He highlighted priorities that include encouraging more domestic investment, expanding clean energy capacity, and lowering internal trade barriers within Canada, which he presented as steps that could support growth and improve competitiveness.

While Carney described the direction of travel, the timing and scope of any new trade agreements and investment commitments were not detailed in the address. The extent to which affected industries—particularly autos and steel—can regain investment certainty will depend on how trade conditions evolve and how quickly policy changes translate into clearer operating assumptions for companies.