Carney begins Asia tour to boost trade as Canada-US ties strain

Canadian Prime Minister Mark Carney departs for Asia on Thursday on a three-country visit aimed at strengthening trade links and reducing Canada’s heavy dependence on the United States. His first stop will be India, where he hopes to significantly expand bilateral commerce.

Carney’s trip, which also includes visits to Australia and Japan, comes as relations with Washington face renewed uncertainty. In 2024, more than 75 percent of Canadian exports were destined for the United States, with total two-way trade exceeding $900 billion.

Tensions have risen since US President Donald Trump returned to office and introduced a series of sector-specific tariffs that have weighed on the Canadian economy. Although most trade between the two countries remains tariff-free under the North American free trade agreement signed during Trump’s first term, the US president has recently criticized the pact as offering little benefit to Washington and suggested it could be scrapped.

Carney has made expanding economic ties with Europe and Asia a central pillar of his strategy to safeguard Canada’s economy in case free trade with the United States weakens further. He has set a goal of more than doubling two-way trade with India to 70 billion Canadian dollars by 2030.

However, analysts caution that new trade relationships cannot fully compensate for a breakdown with Canada’s largest trading partner. Drew Fagan, a public policy expert at the University of Toronto, said diversifying markets is prudent but would not replace the scale of US commerce.

Carney’s outreach to India also faces political sensitivity at home. Ottawa’s ties with New Delhi deteriorated after Canada accused the government of Indian Prime Minister Narendra Modi of involvement in the 2023 killing of Sikh activist Hardeep Singh Nijjar on Canadian soil, as well as alleged intimidation campaigns targeting Sikh activists. India has rejected the accusations.

Canadian Foreign Minister Anita Anand said concerns about transnational repression would remain a key issue during discussions in New Delhi.

In Australia and Japan, Carney is expected to focus on cooperation in critical mineral supply chains. Advanced economies are seeking to strengthen partnerships in the production and processing of rare earth elements, which are vital for high-tech industries and currently dominated by China.