Canada’s biggest export market is becoming a source of strategic anxiety. Former deputy prime minister Chrystia Freeland says reducing dependence on the United States is now a national security priority, not simply a way to find additional customers.
Speaking at the Council on Foreign Relations in New York on October 15, 2026, Freeland linked that warning to President Donald Trump’s statements about taking over Canada. Her remarks come as Ottawa pursues a longer-term effort to expand sales elsewhere. The challenge is substantial: American buyers accounted for more than seven in ten Canadian merchandise export dollars in 2025. Building alternatives could give Canada greater freedom to respond to economic pressure, but businesses need actual orders—not just diplomatic promises.
Freeland Links Trade Dependence to Sovereignty
Freeland’s central concern is what happens when commercial dependence becomes political leverage. At the New York event, moderated by journalist Ali Velshi, she warned against maintaining or deepening economic dependence on a partner who “openly says they want to take you over.” The Canadian Press placed those comments in the context of Trump’s repeated references to Canada becoming the 51st state and his earlier willingness to consider “economic force.” Her message was about protecting Canada’s ability to make its own decisions.
She also made a broader argument: relying heavily on one country remains unwise even when its president supports free trade. That distinction makes the warning more than a reaction to one administration. A future diplomatic thaw would not necessarily remove the underlying concentration risk. Freeland was making her case as a former minister, rather than announcing a new government policy. The practical question raised by her remarks is whether Canada can preserve valuable American business while making its prosperity less dependent on decisions taken in Washington.
The Warning Comes From a Veteran Trade Negotiator
Freeland’s perspective is informed by years spent trying to keep international commerce working. Parliamentary records show that she served as international trade minister from 2015 to 2017, foreign affairs minister from 2017 to 2019, and subsequently deputy prime minister and finance minister. She helped negotiate the agreement that replaced NAFTA during Trump’s first presidency, a period when preserving access to the American market was a central Canadian objective. That experience gives her warning a different context from a general appeal to buy Canadian.
Her position today is also different. She is no longer a member of Canada’s cabinet or Parliament, and her comments accompany the publication of her book, Unreliable Boyfriend. Her experience makes her an informed participant in the debate, but it does not make every judgment a government policy or an economic forecast. The underlying tension remains recognizable: Canada benefited from building close commercial relationships, yet those same relationships can become vulnerabilities when the political assumptions supporting them change.
The Numbers Show How Deep the Dependence Runs
Statistics Canada’s February release put the American share of Canadian merchandise exports at 71.7% in 2025, down from 75.9% in 2024. Sales to other countries increased 17.2%, while exports to the United States declined 5.8%. That represents a meaningful change in destination, but not an end to American dominance. More than seven dollars out of every ten earned from goods exports still came from the U.S. market. These figures concern merchandise, not the full economy or all exports of services.
There is another important qualification: total merchandise exports edged down 0.2% in 2025. The smaller American share therefore reflected both growth elsewhere and weaker sales south of the border. Rising precious-metal exports also helped offset declines in other products, including energy. A lower dependence ratio is not automatically evidence that every industry has found replacement customers. For workers and business owners, the more useful test is whether diversification creates durable additional sales, rather than merely reducing America’s share because existing business has been lost.
Tariffs Have Turned Trade Uncertainty Into a Business Cost
The dispute is not confined to speeches. In an August 25 announcement, Canada’s Finance Department said Washington had imposed 50% tariffs on selected Canadian goods worth C$27.6 billion, effective August 22. Ottawa announced matching countermeasures covering an equivalent value of American products, with rates of 15%, 25% and 50% taking effect September 8. These were targeted measures, not a blanket 50% tax on every shipment. Their impact depends on the product, its origin and the rules applying to it.
Uncertainty also surrounds the longer-term trading framework. At the July 2026 review, the United States declined to extend the Canada–United States–Mexico Agreement in its existing form. Washington cited shortcomings in the agreement and its trade deficits. Canadian officials emphasized that the pact had not disappeared: it remains in force, with 2036 as its scheduled expiry unless extended or otherwise ended. For a manufacturer considering new equipment, that distinction matters. Existing market access still has value, but an unresolved review and changing tariffs can make future returns harder to estimate. Finding additional customers becomes a way to spread that risk.
Ottawa Wants to Double Exports Beyond the U.S.
Prime Minister Mark Carney’s government has adopted a ten-year goal of doubling exports to markets outside the United States. Global Affairs Canada describes that ambition as creating C$300 billion more in trade, while its 2026 State of Trade report identifies 2035 as the target year. The approach combines trade agreements, export assistance, investment promotion and infrastructure. It is a growth objective, not evidence that those additional sales have already materialized or that an equivalent amount has been added to national income.
The scale becomes clearer when translated into a yearly pace. Doubling over ten years requires approximately 7.2% compound annual growth, a mathematical benchmark rather than a forecast. Progress also needs to be broad enough to withstand fluctuations in commodity prices or individual large contracts. Crucially, Canada could become less dependent on the United States without deliberately reducing American sales: exports elsewhere would need to grow faster. That would make diversification an expansion of business opportunities rather than a forced retreat from a valuable market.
Europe Offers an Existing Foundation for Expansion
Canada does not have to build its European trading relationship from scratch. The Comprehensive Economic and Trade Agreement, or CETA, began provisional application on September 21, 2017, immediately removing duties on 98% of EU tariff lines for Canadian goods. Further reductions followed. The agreement gives businesses a framework for reaching European customers, although preferential tariffs do not remove European requirements concerning product standards and consumer safety. An established agreement can open a door; individual companies still have to compete successfully after walking through it.
Ottawa’s export agency is adding practical support. On October 14, Export Development Canada announced a new representation in Paris to connect Canadian businesses with buyers, partners, financing and market intelligence. EDC said it had facilitated C$1.1 billion in business in France and supported about 600 Canadian companies during 2025. Those are existing activities, not sales generated by the newly opened office. The expansion is intended to strengthen an established network and help more firms turn European interest into contracts that can support production and employment at home.
India Becomes a Major Test of the Diversification Push
Canada’s search for customers is extending well beyond Europe. On October 16, Global Affairs Canada announced that a Team Canada trade mission to India had produced 34 commercial agreements worth close to C$300 million. Nearly 300 delegates participated in the mission, which focused on sectors including aerospace, clean technology, energy, life sciences and agri-food. The announcement gives Ottawa something more tangible than a statement of diplomatic intent: businesses have identified opportunities and reached agreements with potential partners in a large overseas market.
Those company-level arrangements are separate from negotiations for a Canada–India Comprehensive Economic Partnership Agreement. Trade Minister Maninder Sidhu also met Indian Commerce Minister Piyush Goyal to advance those talks, with the broader trade negotiations still unfinished as the mission concluded. Nor should the announced value of commercial agreements be confused with exports already delivered. The next test is implementation: whether companies complete projects, supply customers and build repeat business. For Canada’s diversification strategy, signed agreements are an important beginning, rather than the final measure of success.
New Markets Also Require New Routes to Reach Them
Energy exports show why diversification requires physical infrastructure as well as diplomacy. In September, LNG Canada’s partners approved a second phase of their liquefied natural gas project in Kitimat, British Columbia. The C$33-billion expansion is designed to double annual export capacity from 14 million to 28 million tonnes. Its Pacific Coast location offers Canadian gas producers a route to overseas buyers, rather than relying solely on pipelines serving North America. Construction must now turn that planned capacity into actual cargoes.
The project also illustrates the difference between construction benefits and lasting employment. LNG Canada estimates that expansion work could support up to 4,000 jobs at peak construction in Kitimat, while the completed facility would add approximately 90 full-time operating positions. Both matter to communities, but they are different kinds of opportunities. Large export projects commit substantial capital before new sales begin, leaving their economics dependent on future demand and execution. For Ottawa, announcing a route to Asia is therefore only one milestone; delivering it safely, on schedule and at a competitive cost is the harder test.
A Quebec Sauce Maker Shows What Diversification Takes
For smaller businesses, international expansion can begin with a conversation rather than a government agreement. In a profile published by EDC in June 2025, Firebarns co-founder Pierre-Olivier Drouin described meeting the Quebec sauce company’s first prospective French customer at the SIAL food trade show in Montreal. The encounter eventually helped the business enter France. But getting products onto another country’s shelves required adapting labels and meeting unfamiliar market requirements. A promising introduction was only the start of the work.
Firebarns also addressed an obstacle closer to home. Drouin said difficulties sourcing peppers prompted the company to grow them in Quebec, giving it greater control over its ingredients. The story predates the current tariff escalation, underscoring that reaching new customers has always required patient preparation. It nevertheless illustrates the practical work behind a national export strategy: secure supplies, meet customer requirements and make products reliably. For entrepreneurs considering their first overseas order, those details can determine whether a new market becomes a dependable source of revenue or an expensive experiment.
Greater Independence Will Have a Price
Diversification is best understood as protection against disruption, not a promise of cost-free growth. Writing in Policy Options on October 5, economist Chris Ragan argued that stronger economic resilience can resemble insurance: accepting some costs today to reduce exposure to a much larger loss later. He identified expenses associated with developing markets, adjusting supply chains and helping workers acquire new skills. His argument does not establish a specific national price tag, but it challenges the assumption that security and short-term profitability always move together.
There is also too much existing business to dismiss. Global Affairs Canada says C$3.5 billion in goods and services crossed the Canada–U.S. border each day in 2025. Protecting that commerce while broadening Canada’s options is a more demanding task than simply choosing one side of a trade dispute. The strongest evidence of progress would be a wider base of repeat customers, competitive export routes and businesses able to withstand sudden restrictions. Freeland’s warning raises the stakes, but success will ultimately depend on whether Canadians gain both viable alternatives and greater freedom to make their own decisions.
