Canada’s Pivot to Asia Is Finally Real

Summary

Canadian exports to the U.S. have declined slightly, with 65% of goods still heading south in 2026, down from 75% in 2024. The U.S. and Canada have imposed reciprocal tariffs, prompting Canada to explore Asian markets. Japan, South Korea, and China are key targets, with energy and agricultural exports leading the way. The Canadian Energy Regulator reported $10 billion in non-U.S. oil exports in 2025. Despite trade agreements, Canadian and Asian businesses lack awareness of each other’s markets, according to the Asia Pacific Foundation of Canada.

Our Reading

The numbers tell one story.

Canada’s reliance on the U.S. has dropped slightly, but not enough to worry.

Asia is the new focus, with Japan and South Korea leading the way.

Tariff-free trade agreements are in place, but awareness is low.

The real challenge is not access, but knowledge.

Author: Evan Null

Yes, a pivot—where it makes sense

Canada’s exports to the U.S. have dipped slightly, but the majority still go there. The shift is mostly in commodities like oil and gas. The U.S. and Canada have both imposed tariffs, which could push Canada to look elsewhere. The article suggests Asia as the next big market, with Japan and South Korea as immediate priorities. The pivot isn’t sudden, but it’s necessary.

The article notes that the U.S. was the destination for 65% of Canadian exports in 2026, down from 75% in 2024. This decline is mainly in oil, gold, and LNG. The European Union and China each account for about 5% of exports. No single market can replace the U.S., so Canada needs to diversify. This shift is not a sudden move, but a strategic one.

The article emphasizes that Canada’s trade with Asia is already underway, with Japan and South Korea as key partners. These countries have strong trade ties with Canada and offer tariff-free access. Energy, agriculture, and manufacturing are the main sectors involved. The move to Asia is not a new idea, but a necessary step.

LNG Canada, backed by companies like Petronas and Mitsubishi, is a major player in the energy sector. Crude oil exports to Asia have increased significantly, with Alberta’s exports to China and South Korea rising sharply in 2026. These exports are moving directly to Asia without going through the U.S. This trend shows that the pivot is already happening.

Other sectors like agrifood, machinery, and digital services are also gaining traction in Asia. Southeast Asia, particularly Vietnam and Malaysia, offers growth opportunities. The article highlights the need for Canadian companies to explore these markets, but also points out the lack of awareness on both sides.

Not starting from scratch

Canada’s trade with Asia is not entirely new. Japan and South Korea already have strong trade ties with Canada. These countries offer tariff-free access and are key partners in energy and manufacturing. The article points out that Canada’s exports to Japan and South Korea are already growing, with energy and agricultural products leading the way. This is not a blank slate, but a continuation of existing relationships.

The article also mentions that Canada’s energy exports to Asia are being supported by Asian investment. LNG Canada, for example, is backed by companies from Japan, South Korea, and China. This investment is helping to expand Canada’s energy exports to Asia. The article notes that crude oil exports to Asia have increased significantly, with Alberta’s exports to China and South Korea rising sharply in 2026. This shows that the pivot is already underway.

The article also mentions that Canada’s trade with China is selective, focusing on less sensitive areas like pulp, paper, and premium consumer goods. This is a strategic move, as Canada avoids areas of concern like national security and overcapacity. The article suggests that Canada needs to be careful in its trade with China, but also that there are opportunities in other sectors.

The article concludes that while trade agreements and institutions are in place, the real challenge is for businesses to understand and take advantage of these opportunities. The work at hand is to persuade Canadian and Asian companies to get to know each other better. The article emphasizes that governments can only do so much, and that the private sector must take the lead.

The barrier is knowledge, in both directions

The article points out that the biggest obstacle to Canada’s trade with Asia is not market access, but knowledge. Despite existing trade agreements, many Canadian and Asian businesses are unaware of the opportunities available. The article cites a poll showing that a large percentage of Canadians know little about key Asian countries like South Korea, Singapore, and Malaysia. This lack of awareness is a major barrier to trade.

The article also highlights the lack of awareness on the Asian side. A survey of Indonesian firms found that many were unaware of Canada’s free trade agreement with their country. This lack of knowledge is a problem for both sides, as it prevents businesses from taking full advantage of available trade opportunities. The article suggests that governments can only do so much, and that the private sector must take the initiative.

The article notes that companies need to educate themselves and test markets before committing. This includes getting on planes and engaging with potential partners. The article emphasizes that trade agreements and institutions are in place, but that the real work is for businesses to understand and use them. The article concludes that the key to success is for companies to take the first step and get to know each other better.

The article also mentions that the Asia Pacific Foundation of Canada has heard similar stories from businesses in Vietnam, particularly outside the tech manufacturing sector. This suggests that the problem is not limited to one country, but is a broader issue across Asia. The article highlights the need for more awareness and engagement between Canadian and Asian businesses.

Despite the challenges, the article remains optimistic. It suggests that the groundwork is already in place, and that the next step is for businesses to take action. The article emphasizes that the real work is not in the agreements, but in the understanding and engagement between businesses. This is a call to action for Canadian and Asian companies to take the initiative and explore new opportunities.

Conclusion: The next step is action

The article makes it clear that Canada’s trade with Asia is not a new idea, but a necessary step. The U.S.-Canada trade tensions have pushed Canada to look elsewhere, and Asia is the logical next step. However, the article also highlights the challenges that come with this shift. The biggest obstacle is not market access, but awareness and understanding. The article suggests that while trade agreements are in place, the real work is for businesses to take the initiative and explore new markets.

The article also emphasizes the importance of diversification. With the U.S. no longer a guaranteed market, Canada needs to develop multiple smaller markets. This includes not just Japan and South Korea, but also Southeast Asia and other parts of the region. The article suggests that the pivot to Asia is not a sudden move, but a strategic one that is already underway.

The article concludes with a call to action for Canadian and Asian businesses. It suggests that the real work is for companies to educate themselves, get on planes, and test markets. The article highlights the need for more engagement and understanding between businesses on both sides of the Pacific. It also notes that while governments can provide support, the private sector must take the lead.

The article’s main message is that the opportunity is there, but it requires action. The pivot to Asia is not just a response to U.S.-Canada trade tensions, but a strategic move that can benefit Canada in the long term. However, this requires more than just trade agreements—it requires real engagement and understanding between businesses.

In summary, the article is a call to action for Canadian businesses to look beyond the U.S. and explore opportunities in Asia. It highlights the challenges, but also the potential for growth. The key message is that while the groundwork is in place, the real work is for businesses to take the initiative and make the most of the opportunities available.