Canadian exports to China soar while trade tensions with US intensify

Canadian exports to China surged by 30 percent in the first half of 2026, highlighting growing trade between the two countries as Ottawa's trade tensions with its southern neighbour, the United States, continue to escalate.

The figures were published in a new report by the Canada China Business Council and the University of Alberta's China Institute, Canadian media outlets report.

Experts at the institute said the increase appears to reflect renewed engagement between Canada and China as Ottawa seeks to diversify its economy amid deteriorating relations with the US, where the two countries have repeatedly imposed retaliatory tariffs on each other's goods.

Overall trade in goods between Canada and China totaled $66.6 billion in the first half of 2026, up 3.6 percent year over year, while Canadian exports to China rose by an astounding 30 percent to reach $21.74 billion.

Energy and minerals dominated Canada's exports to China, accounting for 58.4 percent of all domestic exports to the country during the period. Energy exports, largely crude oil and liquefied propane, surged 81.8 percent, while metal ores and non-metallic mineral exports, including copper ore, increased 29 percent.

"This is a record for our first half of the year exports to China," said Bijan Ahmadi, executive director of the Canada China Business Council.

While Canada and China have maintained trade ties despite several years of geopolitical tensions, the recent increase appears to have been driven by several factors.

Diplomatic and economic relations have improved following years of tension over the 2018 arrest of Huawei executive Meng Wanzhou on a US extradition warrant.

International expansion

At the same time, the latest escalation in Canada-US trade tensions has prompted Prime Minister Mark Carney to reiterate Ottawa's intention to pursue new trade agreements and reduce its reliance on the US market.

"We have everything we need to pivot and prosper," Carney said in a video address earlier this month, hours after Canada's retaliatory tariffs on billions of dollars worth of US goods took effect. "That pivot will come at a cost. There's always a cost to action. But it doesn't come close to the cost of standing still."

The Trans Mountain Pipeline, a vital transport route stretching across 1,150-kilometre delivering oil from Alberta to a point in British Columbia near the US-Canadian border, which is accessible for international vessels by sea, also reached 97 percent capacity in June, substantially increasing Asia's access to Western Canadian crude oil.

The US-Israeli war on Iran has also disrupted shipments through the Strait of Hormuz, pushing oil prices higher and encouraging some customers to turn to producers such as Canada.

Mark Maki, CEO of Trans Mountain, recently projected that Asia would account for 70 percent of Canada's oil purchases by 2028.

"As we expand, I expect most of that expansion will be directed towards Asia," Maki told Reuters on the sidelines of the APPEC industry meeting in Singapore in early September.

However, Canada's imports from China moved in the opposite direction, falling 5.8 percent year over year, although China remains Canada's second-largest source of imports.

The decline reduced Canada's trade deficit with China by 25 percent. Maki said the decrease was partly driven by a shift of "certain types of manufacturing outside of China," including to Vietnam.

Ontario recorded the largest decline in imports, reflecting fewer purchases of portable computers and video game consoles. Those decreases outweighed increases in imports of lithium-ion batteries and electric vehicles.

By Nazrin Sadigova