30 October 2025
As geopolitical tensions tighten and trade alliances fracture, a new chapter in global economic strategy is taking shape, and it's being written in Asia.
Canada’s Prime Minister Mark Carney is the latest to signal this shift. Embarking on his first official visit to the Indo-Pacific since taking office, Carney’s mission is clear: reduce Canada’s overreliance on the United States by doubling trade with the rest of the world. His timing couldn’t be more strategic or necessary.
The United States has long been Canada’s dominant trading partner, accounting for more than C$1.3 trillion in annual commerce. In contrast, Canada’s 2024 trade with the Indo-Pacific stood at just C$261 billion. Yet, with diplomatic tensions escalating - most recently triggered by a U.S. backlash over Canadian provincial trade messaging - Carney is wasting no time in seeking alternative pathways.
“We can’t control the trade policy of the United States,” he said. “What we can control is developing new partnerships and opportunities.”
That pragmatism is echoed by other mid-sized economies that are increasingly looking east for diversified growth.
Asia’s economic weight, young demographics, and deep investment in critical technologies make it a natural pivot point for countries seeking to rebalance trade dependencies - especially as Western politics grows more unpredictable.
Crucially, this shift is not about abandoning historic alliances, but about hedging risk and securing new leverage. Carney’s outreach to China and India - despite recent tariffs, diplomatic rifts, and geopolitical complexity - reflects a broader pattern among Western democracies. The need to be more agile, less doctrinaire, and highly engaged in regions that are rapidly shaping the global economy.
This approach is evident in Canada’s attempts to resume high-level dialogue with China, re-establish its Joint Economic and Trade Commission, and restart economic diplomacy with India following a two-year standoff.
Sectors such as AI, energy, critical minerals, and agriculture are high on the agenda, and for good reason. These are areas where APAC demand is surging, and where strategic partnerships could deliver long-term benefits for countries willing to play the long game.
Carney's pivot is not an isolated move. Across Europe and the Commonwealth, governments are reassessing their dependencies on U.S. trade flows and looking to the Indo-Pacific for balance and resilience.
Countries like Germany, Australia, and the UK have all launched or accelerated Indo-Pacific strategies over the past two years. Citing the need for supply chain security, digital sovereignty, and access to fast-growing consumer markets. The trend is clear: APAC is no longer a secondary market; it’s a strategic priority.
Still, rhetoric alone won’t be enough. As one former diplomat put it bluntly:
“Canada is regarded as a lightweight - good at visits, poor at follow-through.”
The challenge for Carney and others following this path will be turning diplomatic intent into enduring economic architecture.
That means more than summits. It means bilateral agreements, infrastructure investment, and long-term engagement in APAC-led multilateral platforms like ASEAN and APEC.
As economic nationalism rises in the West and multilateralism stalls, countries looking for durable growth are increasingly looking East. What we’re witnessing isn’t just a strategic realignment, it’s a quiet admission that old assumptions about trade, loyalty, and leverage no longer hold.
If the last decade was defined by decoupling and division, the next may be shaped by diversification, and APAC is at the centre of that shift.
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