Carney’s trade push runs into Canada’s reliance on US market access

Mark Carney is trying to recast Canada as part of a looser bloc of mid-sized economic powers, with trade missions to Asia, fresh investment pitches for mining and infrastructure, and a louder push to sell the Indo-Pacific as an alternative to American dependence. The hard numbers still point back to Washington: 85% of Canada-U.S. trade remains tariff-free, the United States still bought 71.7% of Canada’s merchandise exports in 2025, and the USMCA review due by July 1 could reset the rules that underpin Ottawa’s pitch to investors.

Canada’s federal budget shows how sharply the trade environment has shifted. Average U.S. tariffs across all countries rose from around 2% at the end of 2024 to 17% today, with high duties now hitting autos, steel, aluminum, copper, softwood lumber and wood products. Ottawa is still betting that it can double non-U.S. exports over the next decade, a goal officials say could add $300 billion in exports, but the diversification is incremental rather than transformative. Statistics Canada says the U.S. share of Canada’s merchandise exports fell from 75.9% in 2024 to 71.7% in 2025, a real change, but not one that reduces America’s central role.

That is why access to the U.S. market remains the strongest part of Canada’s sales pitch to foreign investors. The U.S. Department of State says U.S. investors are drawn to Canada’s proximity to the U.S. market, skilled workforce and natural resources, and Canadian officials say the North American trade pact has become the baseline message in conversations with global companies. For many prospective investors, Canada is less a standalone consumer market than a launchpad into the United States.

The USMCA review has made that dependence more visible. The Office of the United States Trade Representative opened a public comment process in September 2025 and held a hearing in December, while Jamieson Greer reported to Congress in December ahead of the July 1, 2026 joint review. Under the pact’s rules, the three governments must decide by that date whether to extend the agreement for another 16 years or shift to annual reviews, and if no extension is agreed the deal can eventually expire in 2036. CSIS has warned that the review is a policy and business-risk event, not a routine checkup.

Business groups are pressing for certainty. The Business Council of Canada called for a timely renewal in December 2025, arguing that predictability is essential to investment. Ottawa has also tried to show that diversification is more than rhetoric: Global Affairs Canada said in March 2026 that China had restored beef market access for 20 registered Canadian meat establishments, and Trade Minister Maninder Sidhu is leading a Team Canada Trade Mission to Japan in June 2026 as part of the broader Indo-Pacific strategy. Carney’s trade agenda is real, but the balance of power still runs through the U.S. market.