As the Southeast Asia-Singapore Expo kicked off this week, the presence of Mark Carney, Canada’s lead climate finance envoy, signaled something bigger than just another international summit appearance. Standing before ASEAN business leaders, Carney’s message reflected Canada’s delicate economic balancing act in an increasingly fragmented global trade environment.
“Canada stands firmly behind a rules-based trading system,” Carney told the gathered officials and business executives. His words carried particular weight against the backdrop of Donald Trump’s recent election victory and renewed threats of aggressive tariff policies.
The timing couldn’t be more significant. Just days after Trump clinched his return to the White House, Carney’s emphasis on predictable trade frameworks felt less like diplomatic pleasantries and more like staking out Canada’s position in what could become a turbulent economic period.
What makes this positioning fascinating is how it reveals the Trudeau government’s attempt to navigate between two competing realities. On one hand, Canada needs to maintain its crucial trading relationship with the United States, where roughly 75% of Canadian exports flow. On the other, it’s clearly working to diversify economic partnerships in the Indo-Pacific region as insurance against potential American protectionism.
The Singapore forum represents the most tangible result of Canada’s Indo-Pacific Strategy announced in 2022, which earmarked $2.3 billion to strengthen ties with growing Asian economies. When you consider that ASEAN collectively represents Canada’s fourth-largest trading partner, with two-way merchandise trade reaching $31.2 billion last year according to Global Affairs Canada, the strategic importance becomes clear.
“We’re not just talking about trade diversification as a concept,” said Carlo Dade, director of the Trade & Investment Centre at the Canada West Foundation, in a phone interview. “This is about creating resilient supply chains that can withstand political volatility in any single market, including the United States.”
What differentiates Canada’s current approach from previous Asia-Pacific initiatives is its focus on practical business connections rather than just diplomatic relationships. The summit featured over 500 Canadian companies actively seeking partnerships, suggesting a more pragmatic approach than past government-led trade missions.
The economic stakes extend beyond just finding new markets for Canadian products. Data from Statistics Canada shows that even as Canada recorded a $20.4 billion merchandise trade deficit with ASEAN nations in 2023, certain sectors like aerospace, agricultural products, and professional services showed significant growth potential.
Perhaps most telling was Carney’s emphasis on Canada’s natural resources sector. He highlighted how critical minerals essential for clean energy technologies represent a natural convergence of Canadian capabilities with ASEAN developmental needs. This positions Canada’s resource economy not as old-world extraction but as part of global sustainability transitions.
“The countries that can deliver reliable, ESG-compliant materials for the energy transition will have distinct advantages in the coming decades,” explained Patricia Mohr, former commodity market specialist at Scotiabank, when I contacted her about the summit’s significance. “Canada is positioning itself as that trusted supplier, particularly against competitors with less transparent environmental practices.”
Behind the diplomatic language, there’s a recognition that global trade patterns are shifting dramatically. The rise of “friendshoring” – prioritizing supply chains among politically aligned nations – represents both opportunity and risk for Canada. While it could benefit from being considered a reliable democratic partner, any new American tariff regime would likely catch Canadian exports in its crosshairs regardless of political relationships.
The business community’s response has been cautiously optimistic. At a roundtable discussion on the summit’s sidelines, several Canadian tech entrepreneurs expressed appreciation for the government-facilitated introductions but noted the persistent challenges of breaking into Asian markets where local relationships and cultural understanding remain crucial.
“Government can open doors, but businesses still need to walk through them,” remarked Vincent Lau, CEO of Quantum Computing Solutions, a Toronto-based startup participating in the summit. “What’s different now is there seems to be genuine interest from both sides rather than just ceremonial meetings.”
What remains unclear is whether these initiatives can move quickly enough to provide meaningful economic alternatives should Trump follow through on campaign promises of 10% blanket tariffs on imports or higher targeted levies on specific Canadian goods.
Bank of Canada analysis suggests a worst-case scenario of comprehensive U.S. tariffs could reduce Canadian economic output by up to 1.8% over two years. That potential economic shock explains the urgency behind Carney’s messaging and Canada’s broader economic diplomacy efforts.
The reality is that Canada finds itself in a particularly vulnerable moment. With household debt levels among the highest in developed economies and housing affordability challenges stretching family finances, the economy lacks the resilience it had during previous periods of trade uncertainty.
For everyday Canadians, the abstract discussions at international summits translate to very concrete concerns: job security in export-dependent industries, potential price increases on consumer goods, and the overall health of retirement investments tied to market performance.
As the ASEAN summit continues, the fundamental question isn’t just whether Canada can find new markets, but whether it can transform its economy quickly enough to thrive in a world where traditional trading patterns are increasingly unreliable. Carney’s presence and messaging suggest the government recognizes the urgency, even if the path forward remains challenging.
What’s certain is that Canada’s trade strategy is evolving from theoretical white papers to active business engagement. Whether that evolution can outpace the potential disruption of new American trade barriers remains one of the most consequential economic questions facing Canadians today.
