Canada is actively seeking to diversify its international trade portfolio by pursuing new free trade agreements beyond its current 15 deals covering 51 countries, including recent agreements with Ecuador and the UAE.

Canadian Trade Minister Maninder Sidhu has expressed interest in advancing negotiations with Mercosur, a South American trade bloc comprising Brazil, Argentina, Paraguay, and Uruguay, to reduce reliance on US markets.

Canada has previously held negotiation rounds with Mercosur and aims to expand its trade partnerships within the Indo-Pacific region, including discussions with ASEAN countries like Indonesia and the Philippines.

Canadian companies are encouraged to seek new markets as their dependence on the US has increased risks, with exports to the US dropping to a record low of 68% in May 2025.

Recent data highlights that Canadian exports to the US have declined to 68% of total exports, partly due to tariffs, prompting efforts to diversify markets.

Canada is also shifting its defense procurement strategies, aiming to increase defense spending to meet NATO targets and reduce dependence on the US, with Prime Minister Carney allocating C$9 billion for this purpose.

Prime Minister Carney is seeking European cooperation on broader procurement opportunities and has pledged to boost defense spending to align with NATO requirements.

Canada is negotiating a trade deal with the US, led by Prime Minister Carney, targeting tariff reductions and enhanced economic relations, with an expected finalization date around August 1, 2025.

Canada is actively addressing trade challenges with China and is optimistic about strengthening trade relations with India, including discussions on products like canola and pet food.

Discussions with China involve trade duties and expanding commercial partnerships, emphasizing the importance of diversifying beyond the US.

Canada’s recent trade initiatives include signing free trade agreements with Ecuador and investment promotion pacts with the UAE, with ongoing efforts to expand into the Indo-Pacific region.