Canada’s pivot to Asia is finally real. The challenge is that neither side knows much about the other
For four decades, Canadian commercial life has been organized around the belief that access to the U.S. market was a constant, rather than a variable.
On September 8, approximately $20 billion worth of U.S. goods will face Canadian counter-tariffs of up to 50%, following similar duties imposed by Washington on Canadian goods on August 22. This shift comes after Washington's decision not to extend the U.S.-Mexico-Canada trade agreement in July. Canadian commercial life has long been based on the belief that access to the U.S. market was constant, but that assumption no longer holds.
To navigate this new landscape, Canada should focus on Asia, where both sides currently have limited knowledge of each other's markets. Canada was the destination for 65% of U.S. goods and services exports in the first half of 2026, a drop from roughly 75% in 2024, mainly due to commodities like oil, gold, and liquefied natural gas.
Despite this, Canada has a strong foundation for expanding into Asia, with Japan and South Korea as immediate priorities. Both nations have strong rule of law, established links with Canada, and already have tariff-free trade with Canada. Canada offers these countries energy and agricultural products, while they supply batteries, semiconductors, machinery, and shipbuilding capacity.
Other sectors, including agrifood, forest products, aluminum, machinery, and digitally delivered services, could also benefit from a shift to Asia. Southeast Asia, specifically Vietnam, Malaysia, and Singapore, are CPTPP partners and offer growth opportunities for Canadian companies. India and Indonesia, though higher-friction markets, also present demand for Canadian machinery, industrial technology, infrastructure, and specialty inputs.
While there is already a trade agreement between Canada and Asia, many companies on both sides lack knowledge about their respective markets. Polls show that 73% of Canadians know little or nothing about South Korea, 82% know nothing about Singapore, and 90% know nothing about Malaysia. Similarly, in Indonesia, 84% of firms reported they had either never heard about or knew very little about Canada's free trade agreement.
To capitalize on these opportunities, both Canadian and Asian companies must take the initiative to understand and engage with each other's markets. While governments provide the necessary support through trade agreements and institutional elements, private sector education is crucial. The private sector needs to travel, test markets, and products, taking advantage of the existing agreements and institutional structures.
Written by urgent.news from Fortune's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
