Canada's Liberal government is rapidly reshaping its economic strategy, directing nearly the entire Cabinet to focus on trade as President Donald Trump's tariffs force Ottawa to confront the risks of relying so heavily on the U.S.
Prime Minister Mark Carney has instructed senior ministers to elevate trade diversification to an urgent national priority, according to government officials.
The message inside Ottawa is that Canada must prepare for a prolonged period of uncertainty in its most important economic relationship, rather than waiting for stability to return.
One senior official, who was not authorized to speak publicly, told Politico that the government views the moment as a fundamental turning point.
Canada, the official said, can no longer assume that economic integration with the U.S. will continue on familiar terms and must adjust to a tougher and more unpredictable American trade posture.
International trade accounts for two-thirds of Canada's economy, and 75% of Canadian exports are sold in the U.S.
That imbalance has long been seen as a strength, but it is now driving concern as the Trump administration again signals its willingness to use what the president calls reciprocal tariffs.
Recent U.S. moves to increase tariffs on steel and aluminum have reinforced those fears in Ottawa.
Canadian officials worry that additional measures could follow, particularly as the mandatory review of the U.S.-Mexico-Canada Agreement approaches in 2026.
International Trade Minister Maninder Sidhu said the Canadian government is responding by deploying ministers across multiple portfolios to strengthen economic ties overseas.
He said trade promotion and investment outreach are no longer confined to one department, but now cut across foreign policy, defense, and industrial planning.
Europe has emerged as the government's top immediate priority. Canada already has a broad free trade agreement with the European Union, but officials say it remains underused.
Only a small share of Canadian exports go to Europe, leaving significant room for growth as Canada increases defense spending and looks to integrate more closely with European supply chains, including in defense-related industries.
The government is also expanding efforts in Latin America, where negotiations with the Mercosur trade bloc are being accelerated. Officials see the region as a way to reduce dependence on the U.S. market while tapping into fast-growing economies.
Other potential partners present more complex political and diplomatic challenges. Carney is expected to pursue cautious engagement with countries in the Middle East and is weighing renewed dialogue with China and India, despite strained relations in recent years.
Those discussions are likely to draw close scrutiny at home.
A comprehensive trade diversification strategy, promised during the election campaign, is expected early in 2026.
The plan is aimed at doubling exports to non-U.S. markets over the next decade and reshaping Canada's long-term economic outlook.
Opposition Conservatives have accused the government of moving too slowly and withholding details.
They argue that businesses and workers need clearer guidance as Canada navigates what many see as the most serious test of its trade model in a generation.
Theodore Bunker ✉
Theodore Bunker, a Newsmax writer, has more than a decade covering news, media, and politics.
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