Crude exports surge as country turns to new markets amid ongoing trade tension with the Trump administration
Canada’s export economy is undergoing a significant shift as trade with the United States continues to decline, making way for new global partnerships that are reshaping the country’s economic future. According to Bloomberg Analytics, exports to the U.S. fell to 68.3 per cent of Canada’s total exports in May, the lowest share since at least 1997, excluding the pandemic years.
The decline in U.S.-bound shipments comes amid renewed trade tensions with American President Donald Trump, whose tariffs and combative rhetoric on Canadian sovereignty have created instability in the cross-border trade relationship. Exports to the U.S. were down for the fourth consecutive month, dropping 0.9 per cent in May. Imports from the U.S. also fell 1.2 per cent, reflecting a general cooling in bilateral trade activity.
While trade with the U.S. softens, Canadian exports to other countries are surging. Led by gold shipments to the United Kingdom and pharmaceuticals to Italy, non-U.S. exports reached a record high in May. The diversification helped narrow Canada’s trade deficit with non-U.S. partners from $10.7 billion in April to $9.1 billion in May. Canada’s overall trade deficit fell to $5.9 billion, down from $7.6 billion the month before.
Crude oil is playing a central role in Canada’s global pivot. Oil exports to Asia and Europe rose 22 per cent this year, reaching a record $12.4 billion. Shipments of critical minerals and gold to South Korea and Germany were also up 18 per cent as Canada capitalizes on global demand for its natural resources. Analysts say this energy-driven growth is enhancing Canada’s long-term economic sovereignty.
These numbers show that while the U.S. remains an important partner, Canada is reducing its vulnerability by expanding trade with more stable and diverse markets, Bloomberg Analytics noted in its summary. The data point to growing trade ties with countries in Europe and Asia, where demand for Canadian energy and minerals is rising steadily.
The shift comes as Canada’s traditional automotive exports to the U.S. show signs of strain. While car and parts shipments were up slightly month-over-month, they fell 8.4 per cent compared to a year ago. Prime Minister Mark Carney met with auto industry leaders this week to discuss how to safeguard the sector in upcoming trade negotiations with the U.S.
Despite lingering global trade uncertainty, May marked the first overall export increase since January, with a 1.1 per cent rise in total shipments. Economists say Canada’s emerging trade strategy, focused on energy, mining, and technology, offers a more resilient foundation. As the global economy shifts, Canada appears to be moving with it, one trade deal at a time.
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