Amid Trump Trade War, Canada’s Exports to China Surge 30% in First Half of 2026

Canada has long been caught between its trade relationship with the United States and its growing economic ties with China. The ongoing US-China trade war has created an opportunity for Canada to increase exports to China, but what does this shift really mean?

The rise in energy sales is a key factor driving up Canadian exports to China. According to a report from the Canada China Business Council and the University of Alberta’s China Institute, crude oil and liquefied propane exports surged by 81.8% in the first half of 2026. Disruptions caused by the US-Israeli war on Iran have led to higher oil prices and a shift towards alternative suppliers like Canada.

Canada’s trade with China is not limited to energy sales. The agreement between Prime Minister Mark Carney and Chinese President Xi Jinping has allowed tens of thousands of Chinese electric vehicles into the Canadian market, while suspending some tariffs on Canadian agricultural products. This deal highlights the delicate balance between trade and politics in Canada’s relationships with other nations.

Canada’s exports to China are still below those to its traditional trading partners like the UK and EU, but they are increasing at a rapid rate. The surge in energy sales is largely responsible for this growth, accounting for 70% of the increase. However, agricultural performance improved modestly during this period, growing by 1.9%.

One potential concern is that Canada may be overly reliant on a single trading partner, especially given current tensions with the US. Anton Malkin, head of research at the University of Alberta’s China Institute, notes that “there’s no country that can replace China’s buying power.” However, this doesn’t necessarily mean that Canada should prioritize its trade relationship with China above all else.

Canadian farmers are already looking to reduce their reliance on a single trading partner by selling more domestically. Andre Harpe, chair of the Canadian Canola Growers Association and a canola farmer near Grand Prairie, Alta, notes that prices have rebounded significantly since the tariff dispute with China was resolved. However, he also cautions that farmers are still vulnerable to fluctuations in global trade and need to diversify their markets.

The report authors note that while some agricultural products saw significant increases, others did not perform as well. Canola seed, pea, and beef exports rose, but lobster exports declined by 28%. This mixed bag of results raises questions about the sustainability of Canada’s trade relationship with China.

Ultimately, Canada must carefully balance its relationships with both the US and China to avoid being caught in the middle of a global trade war. While increasing exports to China may provide short-term gains, it is crucial that Ottawa prioritizes diversification and fortifies its relationships with other trading partners to mitigate risks.