By Lina Irawan 
The long-standing bedrock of Canada’s economic strategy, anchored by an assumption of unfettered access to the vast U.S. market, has been irrevocably shaken. On September 8, a new reality dawned as $20 billion worth of U.S. goods became subject to Canadian counter-tariffs, some soaring as high as 50%. This retaliatory measure directly followed Washington’s imposition of identical 50% duties on Canadian imports on August 22. This escalating trade spat, marked by tit-for-tat duties, is not an isolated incident but rather the culmination of a growing protectionist sentiment south of the border, underscored by President Donald Trump’s administration declining to extend the U.S.-Mexico-Canada Agreement (USMCA) in July. For four decades, Canadian commercial life was meticulously organized around the principle that the U.S. market was a constant, a reliable partner. That fundamental assumption no longer holds, irrespective of whether these tariffs prove to be temporary blips or herald a more permanent shift in trade relations. The urgent question facing Canadian businesses and policymakers alike is: where should Canada look next? The unequivocal answer, increasingly evident, points eastward – to Asia – provided both sides can overcome a significant hurdle: mutual ignorance.
The imperative for Canada to diversify its trade portfolio has never been more acute. The latest figures underscore this urgent need: while the U.S. remained the primary destination for Canadian goods and services exports in the first half of 2026, its share had notably declined to an estimated 65%. This represents a significant drop from approximately 75% just two years prior, in 2024. Much of this initial shift, it must be noted, was not a direct result of active diversification efforts but rather a consequence of global commodity market dynamics, particularly in a handful of key sectors such as oil, gold, and liquefied natural gas (LNG), where Canadian producers found burgeoning demand elsewhere. In stark contrast, the European Union and China each attracted only about 5% of Canada’s total exports, highlighting the overwhelming reliance that still persists on the American market.
Experts widely concur that no single market, however large or rapidly growing, can realistically replace the sheer scale and proximity of the U.S. market. This means Canadian companies must adopt a multi-pronged approach, actively developing and nurturing multiple smaller markets simultaneously. While this strategy demands greater effort, investment, and strategic foresight, the long-term benefits are substantial. By embedding itself within several large, growing, and, crucially, rules-based markets across Asia, Canada can strategically insulate its economy. A diversified trade network would transform any future unilateral decisions from Washington – or indeed, from any single trading partner – from an existential emergency into a manageable annoyance, thereby enhancing Canada’s economic resilience and sovereignty. This strategic shift is not merely about finding new buyers; it is about building a more robust and secure economic future for the nation.
Fortunately, Canada is not starting from scratch in its pursuit of deeper engagement with Asia. The groundwork for this expansion has, in many respects, already been laid through a combination of existing trade agreements, strategic investments, and burgeoning partnerships. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) stands as a cornerstone of this effort, providing preferential access to a bloc of dynamic economies across the Pacific.
Immediate priorities for Canada’s Asian pivot include Japan and South Korea, two highly developed economies with robust purchasing power, strong rule-of-law frameworks, and well-established historical and commercial links with Canada. The trade relationship with both nations is either already largely tariff-free or is rapidly moving in that direction under the auspices of CPTPP and bilateral agreements. Canada offers these advanced economies a reliable supply of essential energy resources and high-quality agricultural products. In return, Japan and South Korea provide Canada with crucial high-tech inputs, including batteries, advanced semiconductors, sophisticated machinery, and significant shipbuilding capacity – components vital for Canada’s own industrial and technological advancement. Beyond these two, Taiwan also presents a compelling case for similar benefits, offering a highly advanced, technology-driven economy. The Taiwan-Canada Trade Cooperation Framework, currently awaiting formal signing, holds immense potential to unlock deeper trade and investment, though its full realization is often subject to geopolitical sensitivities in the region.
A significant driver of Canada’s export growth to Asia, and indeed a tangible symbol of its pivot, is the energy sector, greatly facilitated by substantial Asian investment. The colossal LNG Canada project exemplifies this trend. Backed by a powerful consortium comprising Malaysia’s Petronas, Korea Gas, Japan’s Mitsubishi, and China’s PetroChina, this multi-billion-dollar facility is already actively shipping liquefied natural gas to various countries across Asia. This project not only signifies a major investment in Canada’s energy infrastructure but also establishes a direct, secure energy corridor to energy-hungry Asian markets, bypassing traditional U.S. transit routes.
The Canadian Energy Regulator (CER) has provided compelling data illustrating this reorientation. In 2025, crude oil exports to destinations other than the United States surged to an impressive $10 billion, averaging roughly 430,000 barrels a day. This represents a monumental leap from effectively zero before 2024, demonstrating a rapid and strategic redirection of Canada’s energy flows. This momentum shows no signs of abating: Alberta’s crude oil exports to China and South Korea experienced extraordinary growth rates of 122% and 227%, respectively, in the first four months of 2026. Crucially, these burgeoning energy flows traverse the Pacific directly, eliminating reliance on pipelines or transit through potentially contested chokepoints, thereby enhancing Canada’s energy security and its reliability as a global supplier.
Beyond energy, several other Canadian sectors stand to gain significantly from a strategic pivot to Asia. The agrifood sector, renowned for its quality and safety standards, is poised to capitalize on Asia’s rapidly expanding middle class and their increasing demand for premium food products. Forest products, aluminum, and specialized machinery also find strong markets in industrializing Asian economies. Furthermore, Canada’s burgeoning digitally delivered services sector holds immense potential, offering expertise in software development, AI, cybersecurity, and IT consulting to a region undergoing rapid digital transformation.
Southeast Asia, particularly the member states of the Association of Southeast Asian Nations (ASEAN), represents a critical growth area for these diverse sectors. Vietnam, Malaysia, and Singapore are all active CPTPP partners, offering preferential access and established trade frameworks. Vietnam, with its dynamic manufacturing base and rapidly growing consumer market, presents opportunities for both direct exports and supply chain integration. Malaysia offers significant industrial and processed-food opportunities, leveraging its strong manufacturing base and growing consumer demand. Singapore, a highly sophisticated city-state, serves as an invaluable regional hub for finance, logistics, and technology, while also acting as a discerning end-market for niche agrifood and advanced technology products.
Further afield, the region’s largest markets – India and Indonesia – present high-growth, albeit higher-friction, opportunities. These two demographic giants promise immense demand for Canadian machinery, industrial technology, infrastructure development expertise, and specialty inputs as they continue their rapid economic expansion and urbanization. Navigating their complex regulatory environments and diverse business cultures will require sustained effort, but the potential rewards are substantial. Finally, China, despite its economic heft, will likely remain a more selective market for Canada, both for sourcing and exports. Given ongoing sensitivities around national security, human rights, and concerns over economic overcapacity, Canada-China trade will likely focus on less sensitive areas such as pulp and paper products, industrial materials, and premium consumer goods, reflecting a more cautious and targeted engagement strategy.
Despite the compelling economic rationale and the existing institutional frameworks, a significant impediment to deeper Canada-Asia trade relations persists: a profound mutual ignorance. The obstacle is not a lack of market access; Canada and its Asian partners already boast an impressive array of trade agreements, dedicated expert agencies, active joint business councils, and chambers of commerce designed to facilitate the flow of goods and services. Yet, despite this robust support infrastructure, a startlingly low number of businesspeople on either side of the Pacific possess adequate knowledge of the opportunities available.
Polling data from the Angus Reid Institute, commissioned by the Asia Pacific Foundation of Canada, vividly illustrates this knowledge gap on the Canadian side. A striking 73% of Canadians admitted to knowing little or nothing about South Korea, while 82% confessed similar ignorance about Singapore, and a staggering 90% about Malaysia. This widespread lack of awareness is particularly paradoxical given that 78% of Canadians expressed support for Canada’s CPTPP membership. It highlights a critical disconnect: Canadians endorse the concept of closer trade ties with Asia while knowing almost nothing about the specific countries involved in these crucial agreements.
The mirror image of this ignorance is equally problematic on the Asian side. A Kadin Business Pulse survey, which polled 276 Indonesian firms, revealed that a vast majority – 84% of respondents – had either never heard about or knew very little of the free trade agreement between Indonesia and Canada. Many were entirely unaware that Canada had a preferential agreement with their country, and among those who did possess some knowledge, interpretations of what the agreement covered varied widely, suggesting a lack of clear communication and understanding. Similar anecdotal evidence has been gathered by the Asia Pacific Foundation of Canada from Vietnam’s private sector, especially outside the well-informed tech manufacturing segment.
The implications of this knowledge deficit are profound: businesses cannot effectively leverage trade preferences they do not understand or are unaware of. The fundamental work at hand, therefore, is to persuade hundreds of thousands of Canadian and Asian companies that now is the opportune moment to actively get to know each other. While governments have diligently laid the policy and institutional groundwork, their capacity to drive individual business decisions is inherently limited. Instead, the onus now falls squarely on the private sector on both sides of the Pacific. Companies must take proactive steps to educate themselves about the opportunities, embark on exploratory missions, and diligently test new markets and products. The trade agreements and institutional elements are robustly in place to support this critical diversification effort. However, it is the individual companies, making the strategic decision to look beyond their traditional horizons, that must take the vital first step.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
Barrett Bingley is Asia Regional Director of the Asia Pacific Foundation of Canada, based in Singapore. He was previously senior policy advisor to Canada’s foreign and trade ministers.
