OTTAWA—Canadian companies are boosting trade with allies other than the US and with smaller markets to minimize economic damage from President Donald Trump’s tariffs, government data shows.
While other markets have reduced Canada’s reliance this year on the US, its biggest export market by far, economists and consultants said there are limits to how much it can diversify.
“This is a good thing for Canadian diversification,” said Stuart Bergman, chief economist at Export Development Canada, a government agency. “It’s also important to mention that we are not looking to replace our US business. That would be crazy.”
Canadian government data shows exports to the US dropped by 10 percentage points to 68 percent of total exports between May 2024 and May 2025, primarily of manufacturing products such as cars and parts, and products made with steel and aluminum.
“In the face of global trade challenges, including unwarranted tariffs from the United States, Canada remains committed to expanding its global trade footprint and ensuring long-term economic resilience,” Global Affairs Canada, which represents the Foreign Ministry and the Trade Ministry, said in an emailed response.
The White House could not be immediately reached for comment.
Prime Minister Mark Carney’s Liberals won the April election promising to stand up to Trump and revamp Canada’s economy to be less dependent on its southern neighbor.
Statistics Canada data shows that in May the country exported more gold, petroleum, uranium and pharmaceuticals to close allies such as the United Kingdom and European Union, and to countries as far away as Australia and Indonesia, from a year earlier.
It has also increased exports of a variety of commodities to Singapore, Italy, the Netherlands, Indonesia, Australia, Brazil, Germany and Japan.
Trade data showed that from March to May, the UK replaced China as Canada’s second-biggest export market. Trade with China has slackened as canola and crude oil exports dropped amid another trade conflict.
