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The writer is president and CEO of Business Council of Canada
Canada’s Prime Minister Mark Carney had a lot to think about on his long flight from Ottawa to Kuala Lumpur. That’s because a few hours before he left for the Asean summit, US President Donald Trump announced he was terminating negotiations with Canada, because of an anti-tariff advertising campaign undertaken by one of the American neighbour’s provincial governments.
Carney’s visit to Asia, his first since taking office earlier this year, had been expected to be his most important business trip to date. Before Trump’s suspension of negotiations and subsequent tariff increase on Canada, Carney’s reported goal was to return home with both a sectoral tariff deal with Trump and stronger commercial relations with, in his words, “the economic giants of Asia”. That job just got much harder.
Not only will Carney need to spend time trying to mend fences with Trump, who he may still see at the Apec summit, he will need to reassure Asia-Pacific trading partners that Canada remains an attractive investment destination even if its preferential access to the US market is looking somewhat uncertain.
Carney and the Canadian business leaders travelling to Asia this week will be making a compelling pitch: Canada has what the world wants. In an era of energy and food insecurity, Canada’s abundant natural resources are valued at a premium.
In an era of unprecedented geopolitical shifts, Canada’s resources give leverage. The country can use this to secure trade and investment deals but only if everyone actually believes Canada is able to get goods out of the ground and into global markets. Here, Canada has some convincing to do, as in the past it’s overpromised and underdelivered.
The silver lining surrounding all the tariff and trade uncertainty is that Canadians are rallying around a vision of their country becoming an energy and agriculture superpower. This emerging national consensus can help achieve the government’s international trade targets provided it creates a policy framework that clears a path to building export-enabling infrastructure.
That infrastructure cannot be built overnight. Even with accelerated permitting approvals it would still take years for new projects to go from conception to construction to completion, which is why Carney is giving the country a decade to double non-US exports.
Yet Canada’s trade with its neighbour is so large that even if it were to double all non-US exports it would still sell almost twice as much to the US. Consequently, Ottawa’s diversification strategy is not about decoupling from the US; we want to sell more to the world and more to the US, making it essential to preserve the US-Mexico-Canada Agreement (USMCA), which requires all three countries to review it in 2026, and decide whether to extend it beyond the year 2036.
The USMCA has created a surge in trade and investment benefiting American, Canadian and Mexican workers and promises to do so for decades to come. Among potential improvements to the deal, as discussed between Trump and Carney during their recent Oval Office meeting, is more trade in energy.
Counter-intuitively, Carney’s visit to Asean and Apec could not have been better timed. Trump’s last-minute termination of tariff negotiations has created a sense of drama around Canada. Even the most nonchalant leader present won’t be able to resist casting an occasional sideways glance to watch how Carney and Trump interact.
If the other Asean and Apec leaders see that Carney can work things out with Trump, they will pay closer attention to him. Once he has their attention, Canada’s prime minister can make the case that his country is open for business. Trump, in turn, may note their interest in Canadian resources. If that happens, even if deals are not signed, Carney’s trip around the world will have been worth it.
