In a dramatic turn in North American geopolitics and trade policy, Canada appears to be gradually moving away from its long-standing dependence on the United States. This trend, backed by trade data and strengthened by a recent political statement from Canadian Prime Minister Mark Carney, is reshaping the future of bilateral relations between the two neighboring nations.

A Gradual Decline in US Trade Share

Although the United States remains Canada’s largest trading partner, recent trends indicate a systematic reduction in dependence. According to a Moneycontrol analysis, in 2002, 87% of Canadian exports were headed to the US. By 2007, this had fallen to 79%, and by 2024, the number stood at 76%.

On the import side, the decline has been even sharper. In 2002, 62.6% of Canada's imports came from the US, but in 2024, the figure dropped to just 49.5%. This signals a major diversification effort by Ottawa in sourcing goods from other international markets.

High Dependency in Key Export Categories Still Exists

Despite the declining overall trend, Canada's trade is still significantly intertwined with the US, especially in certain sectors. The analysis revealed that:

• 90% of Canada’s $434 billion worth of exports had over 70% dependence on US goods.

• The US accounted for over half the exports in 95% of Canadian export categories.

• For imports, the US had more than 70% share in half of Canada’s $274 billion imports.

This shows that while Canada is trying to diversify, its economy remains tied to the US in crucial areas, such as automotive parts and aerospace.

For example:

• Engines over 1000cc are a top Canadian export where the US accounts for nearly all trade.

• Turbojets are another key product, with the US holding an 87% share in imports from Canada.

Political Shockwave: PM Carney Calls It ‘A Betrayal’

In his first public address after securing a fourth term, Canadian Prime Minister Mark Carney sent a bold message to the world and especially to the US. Referring to recent developments as a “betrayal” by the United States, Carney declared, “Our old relationship of integration with the US is now over.”

This statement is a strong departure from the traditional tone of Canadian diplomacy, which often treads carefully around its powerful southern neighbor. The remark clearly signals that Canada intends to pursue a more independent economic and foreign policy in the years ahead.

Carney’s tough stance may reflect a broader national sentiment that Canada should not be overly reliant on US politics or policies, especially given the increasing unpredictability in US leadership, as seen during the Trump administration.

Donald Trump's Response: A 51st State Proposal

In what was perhaps an even more startling development, former US President Donald Trump, on April 28, took to his platform Truth Social to suggest that Canada should become the 51st state of the United States.

His post read:

“Good luck to the Great people of Canada. Elect the man who has the strength and wisdom to cut your taxes in half, increase your military power, for free, to the highest level in the World… if Canada becomes the cherished 51st State…”

Trump emphasized that the US could no longer “subsidize Canada with the Hundreds of Billions of Dollars” unless it officially became part of the United States.

While many consider the statement provocative or even humorous, it underscores rising tensions and the evolving narrative around North American relations. It may also be seen as an attempt by Trump to influence Canadian politics from outside, especially given Carney’s strong anti-US rhetoric.

Canada’s Strategy Going Forward

From the current trends, it is clear that Canada is actively working to diversify its trading partners and reduce its reliance on a single country—especially the US. This could mean:

• Strengthening trade ties with the European Union, Asia-Pacific, and African nations

• Entering more bilateral and multilateral trade agreements outside of US influence

• Encouraging Canadian businesses to explore non-US export markets

Canada has already signed major agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Canada-European Union Comprehensive Economic and Trade Agreement (CETA). These deals open up markets with reduced tariffs, giving Canadian exporters alternatives to the US.

Risks of Decoupling

However, reducing dependence on the US comes with its own challenges. For many Canadian businesses, the US market is not just geographically close but also culturally and logistically convenient. Shifting supply chains, adapting to new regulations, and building new networks in unfamiliar markets could take years and incur significant costs.

Moreover, Canada’s deep integration with the US in sectors like energy, automotive, and aerospace means that any abrupt policy changes could disrupt industries and impact jobs.

Public Sentiment and Political Implications

Carney’s statement, while bold, could be polarizing. A section of Canadian citizens and industries may welcome the independence-oriented tone. However, others who benefit from trade with the US might find it concerning, especially with no immediate economic substitute for the massive US market.

Trump’s remarks, on the other hand, may be dismissed by many Canadians as bombastic election rhetoric, but they may also raise questions about future US leadership intentions toward Canada.

Conclusion: A Shifting Power Dynamic

Canada’s gradual move away from US dependence, accelerated by Carney’s assertive political stance, marks a significant geopolitical shift. With trade patterns changing, political statements hardening, and public sentiment evolving, the North American landscape is entering a new phase—one where old friendships are tested, and new partnerships are explored.

The next few years will determine whether Canada can truly establish a diversified economic base, or whether the gravitational pull of the US economy remains too strong to ignore.

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