Canada Rebuilds Asia Trade Ties to Counter Trump Tariff Pain

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“We know that there are customers overseas for so much of what we produce here,” British Columbia Premier David Eby said in a May speech ahead of his own trade mission to Asia. “Our province will be the engine of the new Canada that is more independent, that is less reliant on the United States.”

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Asia Pivot

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Just 12 months ago, former Prime Minister Justin Trudeau and Indian Prime Minister Narendra Modi were expelling each other’s top diplomats. Canada’s relations with China had been in a deep freeze for even longer, ever since the 2018 arrest of Huawei Technologies Co.’s financial chief in Vancouver on a US extradition request.

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Carney, a former central banker who campaigned to replace Trudeau on a back-to-business doctrine, started his outreach early. Less than two months after being elected in April, the prime minister invited Modi to the Group of Seven summit in Alberta, the Indian leader’s first visit to Canada in a decade. 

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At the G-7 summit, Carney and Modi agreed to reestablish formal diplomatic relations. That could lead to restarting long-frozen trade talks, as India also faces high US tariffs.

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And despite Canadian levies against Chinese electric vehicles and metals, as well as restrictions on tech companies such as TikTok, Carney is trying to resolve tensions with Beijing, which is taxing Canadian food products in retaliation. Foreign Minister Anita Anand was in China in October, only the third such visit in eight years.

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It’s a rapprochement some in the private sector are welcoming.

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“Our team in China will be fist-pumping in the air,” said Kari Yuers, chief executive officer of Kryton International Inc., a Vancouver-based firm that protects concrete, with operations in China and India, the latter being one of its fastest-growing markets. 

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“We are looking at facilities growth, and expanding our manufacturing abilities in India, so these good things happening certainly bode for confidence in doing those types of investments,” she said.

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Royal Bank of Canada also is looking to expand in the region, CEO Dave McKay said in a September interview. Canada will look for more energy partnerships in Asia as well as more manufacturing capability, he said.

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“This is a big part of the prime minister’s strategy,” McKay said. “Therefore it’s going to become a more important part of us investing in Asia, investing in connectivity from Canada to Asia.”

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In the last three months, Carney also signed a trade deal with Indonesia, advanced projects to increase Canada’s gas exports to Asia, and shortlisted a Korean firm bidding to build its submarine fleet, a contract worth tens of billions.

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Betting on a Port

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In British Columbia, humble Prince Rupert has become emblematic of the effort to find new markets for what Canada is selling. The port is invoked by politicians thousands of miles away, from parliament in Ottawa to Saskatchewan, where Premier Scott Moe wants a northern trade “corridor” to sell more prairie goods westward.

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Prince Rupert — situated as far northwest from Vancouver as San Francisco is south — is way ahead of them. Although Canada’s fervor for diversification mostly began after Trump’s election, the port is years into building C$3 billion ($2.2 billion) of improvements. CEO Shaun Stevenson said the work will enlarge the port’s annual capacity from 45 million tons of cargo to almost 65 million in the next five years.

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Now, investors and politicians are pitching more additions. Rob Booker, CEO of terminal operator Trigon Pacific Terminals Ltd., is working on expansion plans, and said he’s even getting calls from the mineral-rich “Ring of Fire” region in Ontario 2,000 miles to the east about exporting concentrates.