International Economic Relations

The Buy Canadian movement has become a formidable force in just a few short months. And it may be more than a reactionary fad amid U.S. tariffs. This moment provides a unique window of opportunity for businesses to expand across Canada. Households are flocking to purchase locally sourced items, businesses and various levels of government are pursuing Canadian vendors for procurement projects and interprovincial trade barriers are being rapidly removed. Travels to US by Canadian residents have dropped to pandemic levels from early 2022. But as emotions run high, it remains vital to look at the big picture. There are industries whose supply chains are simply too intertwined, where untangling them would be akin to trying to unscramble an omelette. Even if all Canadians prioritize Canadian-made goods and services, it won’t completely offset the economic toll of tariffs. Therefore, Canadian businesses will still need to rely on exports to the U.S. and other countries for growth. While trade uncertainty presents monumental challenges, it is also an opportunity for Canadian businesses to de-risk and diversify their customers and suppliers—a sombre lesson from the COVID-19 pandemic that rings even truer today. Full post: https://lnkd.in/gwx_QtkB

𝗖𝗮𝗻𝗮𝗱𝗮 𝗷𝘂𝘀𝘁 𝗺𝗮𝗱𝗲 𝗮 𝗾𝘂𝗶𝗲𝘁 𝗯𝘂𝘁 𝘁𝗲𝗹𝗹𝗶𝗻𝗴 𝗺𝗼𝘃𝗲 Passenger capacity from the UAE increased from 21 to 35 weekly flights. From Saudi Arabia, from 4 to 14. More importantly, cargo limits were removed entirely. That last part matters. When cargo is unlimited, this stops being about bilateral routes. Canada effectively plugs into the global networks of Emirates, Etihad, SAUDI AIRLINES and soon Riyadh Air | طيران الرياض, which together reach well over 100 markets across Europe, Asia, and Africa. This is happening while Canada’s exports beyond the US continue to grow. By mid-2025, non-US exports were up low-teens year over year, and in several months the US share dipped into the high-60 percent range. The US still dominates, but incremental growth is clearly elsewhere. Connectivity usually lags trade reality. Here, it is starting to catch up. Trade routes rarely change with announcements. They change when capacity is added. And capacity just was.

For decades, Canada’s prosperity rested on a simple assumption: the border with the United States would stay open, stable, and reliable. Today, that assumption is on the ballot. The Canadian election will determine far more than who holds power—it will shape how Canada positions itself in a world of shifting alliances and rising economic pressure. When trade stops being invisible, it becomes political. Trade, once background noise in political campaigns, has become the defining issue, driven by escalating U.S. tariffs and deepening geopolitical tensions. Mark Carney’s strategy centers on building economic resilience by reducing Canada’s dependence on the United States, which absorbs nearly 79% of Canadian exports. He has pledged swift retaliation against U.S. tariffs and a sweeping overhaul of internal trade barriers to create a fully integrated national market. His broader goal is to anchor Canada’s future in expanded alliances with Europe, Asia, and Latin America—repositioning the country as a stronger, more independent global player. Pierre Poilievre advances a "Canada First" strategy, aiming to restore and redefine trade ties with the United States by pushing for a rapid renegotiation of USMCA to lift tariffs. At the same time, he emphasizes economic self-reliance, pledging to fast-track pipelines, LNG terminals, and critical mineral projects to expand exports beyond North America. His message is direct: Canada must strengthen its economy from within to defend its interests abroad. Meanwhile, Canadian voters are signaling a clear shift. Polls show 64% now view the United States as unfriendly, and more than 60% are boycotting American products in protest. The trade dispute has moved beyond policy debates—today’s vote reflects a broader surge of economic nationalism, a collective push to reclaim control over Canada’s future. Whichever path Canadians choose today, the outcome will echo far beyond Ottawa. It will define how Canada trades, grows, and asserts itself in a world where economic power is inseparable from political sovereignty. This election will define Canada's path forward—its trade alliances, economic independence, and national identity. #CanadaElection #TradePolicy #EconomicStrategy #GlobalTrade

Mexico Turns Its Back on U.S. Market: $2.8B Tomato Industry Moves to Canada Mexico has significantly redirected its tomato industry away from the U.S. market toward Canada, involving approximately $2.8 billion in tomato exports. This shift occurred after the U.S. abruptly imposed a 17% tariff on fresh Mexican tomatoes in July 2025 by terminating a longstanding tomato trade pact. Instead of retaliating directly, Mexico quickly responded by rerouting nearly half of its tomato exports through Canada, establishing a new logistics network that bypasses U.S. ports and customs checks. This redirection is not a minor or temporary adjustment; it has rapidly escalated, with Mexican tomato exports to Canada increasing from less than 1% two years ago to nearly 48% projected by 2026. The move has involved cold-chain rail lines and long-term contracts with Canadian grocery chains, cementing Canada as a major new hub for Mexican fresh produce like tomatoes, avocados, strawberries, and bell peppers. The consequences for the U.S. include rising tomato prices by over 20%, supply shortages, and disruption of traditional supply chains serving American retailers and states heavily reliant on Mexican tomatoes. Meanwhile, Canada offers a stable trade environment and reliable contracts, contrasting with U.S. tariff unpredictability. This shift represents a major realignment of North American agricultural trade, with Mexico choosing to invest in a more assured and respectful market partnership rather than staying tied to U.S. trade policies that have become more hostile. Mexico’s $2.8 billion tomato industry has effectively moved its primary market from the U.S. to Canada in response to the U.S. tariffs, significantly altering the regional trade landscape.

While I welcome PM Mark Carney’s decision to establish a formal advisory process on Canada–U.S. relations, the committee announced today excludes the very firms whose business models, assets, and competitive realities will be most directly shaped by the upcoming CUSMA review. There is no representation from Canada’s digital and innovation economy. No voice for the companies building, owning, and exporting the intangible assets that now define global trade. Global competition is no longer organized around goods alone. Intangible assets make up 92% of the S&P500 and are approaching $100 trillion in value globally. Digitally delivered services account for more than half of global services trade. Economic and security advantage now flows through control of data, intellectual property, and the standards that govern their use. This is as true in life sciences, agriculture, critical minerals, and natural resources as it is in software, where control over clinical trials, genomic and environmental data, processing technologies, and downstream IP determines where value is created, captured, and anchored. The United States is their largest market. It is also the jurisdiction most actively shaping the rules of the digital and innovation economy, through procurement, standards-setting, and strategic use of trade policy. The next phase of CUSMA will not be a routine update. It will determine who captures value in the next generation of global markets. Canada’s scaling firms are not peripheral to this system. They are participants in it, and in many cases, they are competing at its frontier. We mishandled the digital architecture agenda in CUSMA, leaving Silicon Valley largely victorious, as cited by the Financial Times in 2018. (Link here: https://lnkd.in/e_ZYyeVZ) The 21st-century economy belongs to those who write the rules, not those forced to follow them. Right now, the United States is shaping the rules for data, platforms, and algorithms through procurement, standards, and trade policy, while Canada remains reactive. Canada must urgently build the expertise and capacity to negotiate effectively, because the next phase of CUSMA will determine who captures value in the next generation of global markets. The 24 members named today are eminent Canadians who represent sectors that have long anchored the Canadian economy. But none of them speak for the cohort of Canadian-headquartered firms that are building new markets, scaling globally, and competing daily for customers on both sides of the border. Leaving them outside the room weakens Canada’s position before negotiations even begin. I urge the federal government to add expertise to this council that reflects the 21st-century economy.

Just spent 10 days in Canada: two cities, two business round tables, multiple meetings with business leaders, govt reps and catchups with Indo-Canadian friends. Takeaways: 1. Canada is still grappling with an existential challenge from its southern neighbour, but US volatility is now factored into policy. PM Carney seems steady at the wheel and is still in the honeymoon phase, with Canadians confident he will steer them through the Trumpstorm. Canada’s provinces are united more than ever behind the PM, with internal trade barriers breaking down. 2.Cautious optimism is palpable about improving India- Canada diplomatic ties. These were reset in June by the Modi- Carney meet and will stabilise with the arrival of high commissioners in September. Canada now seems to privilege its national interest over diaspora politics in its foreign policy dealings 3.The political turbulence that was a headwind for Canadian investment in India has ended. Calmer ties can be expected to turn into a tailwind for bilateral trade and investment. In fact, Canadian institutional investment is likely to double from the current $100 billion by 2030, as India becomes a strategic diversification opportunity, given volatility in China and the US. 4.The India – UK trade deal will provide a fresh template (along with the upcoming India – US and India – EU deals) for the paused talks on an India-Canada interim trade agreement. Both sides will perhaps this year take stock of the upended trade order and the web of new bilateral deals they will have in place. When the dust settles by next year, they could resume conversation on the bilateral FTA.

What is Canada's Best Response to Tariffs? While the instinct to retaliate is strong, history and economic data show that counter-tariffs often hurt Canadian businesses and consumers more than they help. Instead of escalating tensions, Canada should take a smarter approach: ✅ Diversify trade – Reduce dependence on the U.S., which accounted for 63.4% of our trade in 2022. Expanding partnerships with the UK and Europe can make Canada more resilient. ✅ Find common ground – Let's get our smartest people working on pragmatic diplomacy. We need the U.S. to know we're addressing their concerns and that we have a common goal of minimize economic fallout for both sides. An eye for an eye leaves everyone blind. ✅ Invest in growth – Strengthen our economy by investing in industries where we have a competitive advantage such as energy, life sciences, technology and fintech so we provide short term relief while also investing in areas that can drive growth for our economy in the long-run. Rather than engaging in a trade war that could damage our economy, we should stay focused on economic resilience, strategic diplomacy, and trade diversification. Canada needs to take a proactive rather than reactive stance—our business and economy needs to be able to stand on it's feet regardless of the trade pressures come our way. As Benjamin Bergen of the Council of Canadian Innovators | Conseil canadien des innovateurs (CCI) said: "Now is the time to double-down on Canada."

In today's The Globe and Mail, I suggest that China will loom large in the 2026 review of the North American Trade Pact #CUSMA. That can be to Canada's advantage. Washington cares more about Beijing than Ottawa. Access to Canada's dairy market, the dispute over the Canadian digital services tax and other bilateral trade irritants may be eclipsed by (or can be traded off against) U.S. efforts to restrict China's role in North America. Canada should therefore approach CUSMA's China dimension strategically based on a simple premise: **if the U.S. can keep the yard of trade restrictions towards China small, Canada can help ensure that the fence is high.** Circumvention, both of the legal and illegal sort, are plaguing the efficacy of U.S. export and import restrictions vis-à-vis China. In a world of interwoven supply chains, bilateral restrictions are not workable. But the U.S.' efforts to loop in partners has not been successful. That creates leverage for Canada, which can offer to mirror U.S. restrictions, beef up enforcement and help build broader coalitions. Crucially, though, it is not in Canada's interests to be sucked into a great power trade war. Canada can only help keep the fence high, if the yard stays small. That means China-related restrictions have to remain confined to a manageable set of issues closely linked to economic security. The CUSMA review therefore provides an opportunity to demarcate the yard and to reinforce the fence. That would help Canada strengthen economic and political ties with the U.S., while confining trade tensions with China. https://lnkd.in/eWaEC2B9

Canada isn’t just another U.S. trading partner. It’s an extension of the U.S. industrial base. In 2024, roughly $3.6 billion in goods and services crossed the U.S.–Canada border every single day. Energy, autos, agriculture, pipelines, factories, logistics. Morover, this relationship isn’t diplomatic, it’s physical. USMCA may structure it, but geography sustains it. Canada is the U.S.’s largest export market and one of its most important suppliers. North American trade works because it’s welded together. Which is why Prime Minister Mark Carney’s trip to Beijing last week is such a huge deal. Carney didn’t just reopen channels with China—he described a “new strategic partnership.” More striking than the substance of the deal was the rhetoric: Carney described China as the more predictable partner than the U.S. Couple that with Canada reportedly modeling a potential U.S. invasion and it's fair to ask if anything makes sense anymore. What’s even more surprising? President Trump’s response. After USTR criticism, Trump waved it off: “That’s OK… If you can get a deal with China, you should do that.” This came days after dismissing USMCA as “irrelevant.” I’ve argued that USMCA renewal was the easiest forecast on the board. The economic damage of breaking North American trade is so obvious it barely felt like a prediction. I still think those constraints matter—but Carney’s Beijing trip is a real signpost against that view. North American integration makes overwhelming economic sense. But integration only constrains politics if leaders feel constrained by it. Pipelines don’t reroute overnight. Factories don’t move on command. But politics can ignore physical reality faster than supply chains can adapt. Canada’s China deal is a reminder: even the deepest industrial integration is only as durable as the political leadership willing to respect it. https://lnkd.in/gmxKuu7A

Canada isn’t just reforming policy, it’s building long-term economic stability. What Mark Carney is pushing for goes beyond short-term fixes or political soundbites. It’s a deliberate shift toward a resilient, diversified, and future-proof economy, one that doesn’t rely on a single market, a single sector, or a single moment in time. And that matters more now than ever. For too long, countries have depended on one dominant partner or one major export. It looks efficient ... until it suddenly isn’t anymore. Because when markets shift, supply chains break, or geopolitical tensions rise, that “efficiency” becomes vulnerability. Carney’s vision flips that script. I have been following his multilateral efforts to diversify and strengthen Canada's economy, and from all signals show that he is advocating for an economy with multiple strong pathways, diversified trade partners, innovation-driven industries, clean energy, advanced manufacturing, and a skilled workforce that can adapt to whatever the next decade looks like. This isn’t about abandoning existing relationships. It’s about building alternatives, giving Canada the strategic flexibility to stay strong, competitive, and stable no matter how global dynamics change. A resilient economy spreads opportunity and risk instead of concentrating them It creates new jobs in emerging sectors It attracts global investment It strengthens national security And it gives businesses room to grow beyond traditional boundaries In a world defined by uncertainty, resilience is the new competitive advantage. Canada isn’t waiting for the world to settle, it’s preparing to thrive in whatever world comes next. That’s leadership. That’s strategy. And that’s how long-term prosperity is built. #CanadaEconomy #EconomicStability #MarkCarney #Resilience #Futur #GlobalTrade #DiversificationStrategy #Growth #Leadership #Innovation #SustainableGrowth