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Canada’s push to expand its economic relationships around the world should not be mistaken for a retreat from the U.S., a leading Canadian business voice told FOX Business, warning that continued uncertainty over North American trade risks creating a “capital chill” that could weigh on investment.
Goldy Hyder, president and CEO of the Business Council of Canada, said Canadian companies continue to view the U.S. as their most important market even as Prime Minister Mark Carney’s government accelerates efforts to attract investment and expand trade with Europe and other markets.
“Even a kid with a lemonade stand would know, it’s not good for business to just have one customer,” Hyder said, describing Canada’s approach as a “U.S. Plus” strategy.
“The United States is and will be our most important trading partner,” he added.
The push comes amid a sharp deterioration in the trading relationship between the longtime allies. Nearly 68% of Canadian exports have gone to the U.S. this year, with roughly 80% of those shipments moving duty-free under exemptions provided by the U.S.-Mexico-Canada Agreement, according to Canadian and U.S. government data cited by Reuters.
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Washington and Ottawa have exchanged new trade restrictions in recent weeks after negotiations broke down, adding uncertainty over the future of USMCA. The agreement remains in force, although the U.S. declined to renew it in its current form during a July review and has continued negotiations with its North American partners.
“Business does not welcome uncertainty, it shuns uncertainty, and there’s too much of that,” Hyder said.
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“The key here is the uncertainty can create capital chill, it will create hesitancy because we just can’t be sure the environment in which we’re dealing.”
That concern is shared by the U.S. Chamber of Commerce, which is urging all three governments to quickly resolve the issue.
“For businesses and investors, it is essential to restore certainty to a North American economic partnership on which 13 million U.S. jobs depend,” Neil Herrington, the Chamber’s senior vice president for the Americas, told FOX Business.
Herrington said the Chamber wants the process concluded in a way that eliminates tariffs and broader trade restrictions while ensuring the relationship “remains trilateral.”
Carney, meanwhile, is attempting to position Canada as a more diversified destination for global capital. His government has set a goal of helping catalyze 1 trillion Canadian dollars in investment over five years, with a focus on sectors including energy, mining, technology and infrastructure.
Canada has also pursued deeper ties with Europe. The EU is Canada’s second-largest trading partner after the U.S., accounting for $178 billion in total trade last year, Global Affairs Canada spokesperson Renelle Arsenault told FOX Business.
Arsenault said Ottawa remains committed to a “fair and stable economic relationship” with the U.S. while simultaneously diversifying its trade and investment relationships.
Hyder similarly cautioned against interpreting Canada’s outreach abroad as an alternative to North American economic integration.
“I don’t believe there’s any scenario in which we seek to have more regulatory and/or tax or other types of integration with Europe because it’s nowhere near as competitive as we are, and certainly you are in terms of what we have going when it comes to the USMCA,” he said.
“That is the foundational trade architecture under which we operate.”
Hyder also dismissed concerns that Washington’s separate negotiations with Canada and Mexico signal that the three-country framework is fragmenting.
“All roads point to a merger. All roads point to this coming together trilaterally,” Hyder said, adding that businesses are seeking a “timely, trilateral, tariff-exempt” review and renewal of the USMCA.
Global Affairs Canada likewise said all three countries “would benefit from restoring greater certainty” to the North American free-trade arrangement.
Looking beyond the current dispute, Hyder pointed to energy, nuclear power, food security and critical minerals as areas where the three countries could deepen cooperation and strengthen North American supply chains.
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“It shouldn’t be… America at the expense of Mexico and Canada,” Hyder said. “It should be America, Mexico and Canada thinking as North Americans that we can work together to compete with the rest of the world.”
Reuters contributed to this report.
