Americas, Asia - Pacific

Canada pens new deal with Japan, including in trade, energy, defense

Prime Minister Mark Carney seeks ties with other countries to lessen reliance on volatile US market

Barry Ellsworth  | 07.03.2026 - Update : 07.03.2026
Canada pens new deal with Japan, including in trade, energy, defense Prime Minister of Canada Mark Carney

TRENTON, Canada

Canada signed agreements Friday that strengthen ties with Japan as Prime Minister Mark Carney continues his bid to move from historic economic ties with the US.

The prime minister is on the last leg of a nine-day tour of India, Australia and Japan to build stronger ties and move from Washington, its largest trading partner. In all, Canada exports 77% of its goods to the US.

But under President Donald Trump, the historic ties with Canada have weakened as the volatile leader enacts tariffs and trade threats, not sparing the traditional economic ties with its close ally.

As a result, Carney is trying to diversify his country’s trading partners because it is tricky dealing with the mercurial Trump.

Speaking of negotiation with Trump, the prime minister is on record as saying, “It’s not easy, let’s be clear.”

“Canada is focused on what we can control – strengthening our economy at home and diversifying our partnerships abroad, including in the Indo-Pacific,” according to a statement.

Japan is a more than $5.5 trillion market, the world’s fourth-largest economy, and Canada’s fourth-largest source of foreign direct investment -- with nearly $40 billion in bilateral trade.

“Canadian businesses in Japan are leaders in financial services, forestry, and automotive sectors, and 70% of the cars manufactured in Canada are made by Japanese companies – supporting thousands of high-quality careers for Canadian workers,” it stated

Carney has said that the global order faces “rupture”

and middle-sized countries must form stronger strategic partnerships together so as not to be “on the menu” for great powers.

Carney was successful in negotiating enhanced deals with India and Australia, as well as Japan.

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