Canadian exporters build resilience amid trade uncertainty

What does resilience look like when uncertainty becomes the norm?

The Canadian economy is facing multiple, concurrent pressures—from tariffs and trade disputes to geopolitical shocks and supply chain disruptions. These developments continue to weigh on exports and raise costs for businesses already contending with adverse conditions.

The latest round of tariffs and reprisals will likely shave a few tenths of a percentage point off gross domestic product (GDP) growth this year and next while adding a similar amount to inflationary pressures. Despite this challenging backdrop, Canadian businesses are making deliberate choices to adapt rather than waiting for conditions to stabilize or return to “normal.”

Canadian exporters adapt to ongoing trade uncertainty

Export Development Canada’s (EDC) mid-year 2026 Trade Confidence Index (TCI), based on a survey of Canadian exporters conducted between June 8 and July 27, rose two points from the fall reading to 71.7.

While the index doesn’t capture exporters’ impressions since conditions changed in August, it does tell us something about the adaptive approach Canadian companies have adopted.

Respondents are clear that uncertainty has now become a permanent operating condition. Although the headline reading remains below its long-term average of 72.4, companies have become more adept at responding to volatility, preparing for the next disruption and creating options for international growth. 

Market diversification strengthens exporter resilience

The most resilient exporters are combining continued access to the United States with sales in new markets. This allows them to preserve their structural advantages while reducing excessive reliance on a single source of revenue.

Almost three-quarters of respondents, or 72%, plan to enter a new market within two years. That’s up from 65% five months earlier and 51% in 2015.

Europe is the leading target market, cited by 31% of respondents, followed by the Asia-Pacific region at 20%. Companies are also increasingly using free trade agreements to gain preferential access to markets where demand, Canadian advantages and institutional stability align. Anticipated agreements with India, the United Arab Emirates, Mercosur and Indonesia could support these diversification efforts.

This finding aligns with EDC’s new white paper, From resources to resilience: How Canada can capture more value through trade, which highlights that long-term competitiveness depends not only on diversifying markets, but also on helping Canadian companies move into higher-value activities and capture a greater share of the value created through trade.

Canadian investment and global supply chains support growth

The strategic response to the current environment isn’t focused solely on exporting to more markets. Three-quarters of the increase in the TCI stems from exporters’ views of domestic sales and economic conditions.

More than half of respondents, or 55%, expect their domestic sales to increase. This suggests exporters are drawing on their strengths at home to reduce their vulnerability to international disruptions.

Companies are also increasing their investment in Canadian capabilities. Two-thirds, or 66%, already invest in Canada and another 18% plan to do so. Local sourcing and partnerships remain important, with 83% of respondents purchasing from Canadian suppliers.

The most resilient respondents also report participating more deeply in global value chains through a broader range of trade-related activities. Strategies such as dual sourcing can help strengthen the resilience of supply chains.

An increasing share of exporters is also poised to invest outside of Canada. That proportion has risen to 34% from 29% as companies pursue growth, resilience and long-term competitiveness.

International partnerships create important channels for exchanging knowledge, transferring technology, gaining exposure to new management practices and accessing specialized inputs. Over time, these benefits strengthen productive capacity and enable companies to compete in higher-value activities.

Risk management helps exporters prepare for disruption

Companies are keenly aware of the risks accompanying this new reality, including those that could hinder the execution of their mitigation strategies.

The top concerns cited by respondents include global economic conditions, foreign tariffs, maintaining profitability, managing rising business expenses and preserving sufficient cash flow. While some of these are longstanding issues, companies are increasingly planning to tackle them head-on rather than waiting for conditions to change.

Respondents report preparing operational responses before disruptions occur and integrating risk management into everyday business decisions.

The bottom line: Building long-term resilience in Canadian trade

Resilience is no longer about weathering a temporary disruption. It’s about planning for continued uncertainty and finding new paths to growth despite it.

Canadian companies are doing just that. They’re diversifying beyond the U.S. without retreating from it, investing at home and abroad, strengthening domestic supply networks, participating more deeply in global value chains and integrating risk management into everyday decisions.

The task now is to match that business agility with the financing, infrastructure, skills, trade agreements and innovation needed to turn adaptation into higher productivity, greater value and lasting prosperity.

This week, special thanks go to Ian Tobman, manager of our country and sector intelligence team. As always, we at EDC Economics value your feedback. If you have ideas for topics you’d like us to explore, please email us at economics@edc.ca and we’ll do our best to cover them.