Canada eyes Latin America to hedge Trump tariffs and unlock higher‑value trade gains
Canada is sidelining a US$6tn Latin American market just as Washington weaponizes tariffs and puts North American trade back on the chopping block.
Canada is “missing out on economic opportunities in its own backyard,” warns a new report from the Canadian Council for the Americas (CCA).
Cited by The Canadian Press, the report argues that Canada has neglected Latin America and the Caribbean as a source of trade, investment and diversification potential, especially as US protectionism escalates.
According to RBC’s Trade Zone, Latin America’s economy is now about $6tn in size, more than double Canada’s and more than twice what it was 20 years ago.
Yet Canadian exports to the region reached only about $18.6bn in 2024 and fell nearly 11 percent that year as agri-food shipments were disrupted.
Janice Stein, the geopolitics expert who co-chaired the CCA report, calls Latin America “the neglected ... close cousin of Canada” and says “regions matter more in this world when the architecture breaks apart,” reported by The Canadian Press.
The report, Beyond the Build, urges Prime Minister Mark Carney’s government to shift from a narrow focus on domestic infrastructure and instead deepen existing relationships and trade agreements in the Western Hemisphere.
CCA president Ken Frankel argues that “despite its reduced engagement recently, Canada is still admired” in Latin America and the Caribbean and that this is “a region where Canada arguably has its largest and historically deepest footprint.”
He and other authors push Canadian policymakers and industry to stop viewing the region simply as a set of commodity competitors and to focus on building higher-value supply chains.
RBC notes that Canada has spent about 25 years negotiating free trade agreements across Latin America, but many “did much less than was promised.”
One example: Canada has about $24bn invested in Chile but ships less than $1bn in exports there, as per RBC.
The bank says that simply concentrating on Brazil, Mexico, Chile, Colombia and Peru would unlock a combined market of nearly 500 million people, about half of them middle class.
The CCA report outlines several practical plays.
It calls for consortium-style bids to help close the region’s estimated $150bn infrastructure gap and emphasizes energy (including LNG), machinery, pipelines, digital systems and mining technology.
It also urges Canada to target equipment such as buses and tunnelling gear for megaprojects, according to RBC’s summary of the paper.
It also calls for critical minerals partnerships that extend into processing and even battery production.
For mining investors, analyst John Price says Canada’s own rules now risk undermining its position.
After “a decade of Ottawa overreach and a lack of diplomatic support for all mining industry abroad, this is a moment for Canada’s mining industry to revive itself,” he told The Canadian Press.
He argued that Canada needs more favourable regulation at home to convince Latin American governments and urban voters that Canadian miners operate responsibly.
He notes “there is an urban voter who associates mining with dirty practices, with bad labour practices ... So there needs to be a counter-voice to that negativity,” and insists “Canada has the track record” after “decades of mistakes and decades of local community stakeholders” forcing better practices.
Price also argues that joint ventures around lithium and other critical minerals that include processing and battery production would likely be well received by governments seeking to limit China’s dominance in rare-earth processing.
Services and agriculture already show how diversification can work.
As per RBC, services now represent nearly a quarter of Canada’s exports and have delivered 62 percent of total real export growth since 2014.
They face fewer tariffs, weather downturns better and are already split roughly 50/50 between US and non-US markets, compared to goods exports, about 75 percent of which still go south.
In agri-food, pulses provide a template.
Canada is the world’s top exporter, accounting for roughly 24 percent of global pulse trade, with dried lentils and peas moving mainly to South Asia, West Asia and South America, including India, Turkey, the UAE, Colombia and Peru, reported by RBC.
The export value of dried peas and lentils reached nearly $4bn in 2024.
Canada’s pea and lentil production has increased by about 73 percent and 393 percent respectively over 25 years, and Canada now ships around five times as many dried peas as the US, as per RBC.
This pressure to diversify is intensifying as US trade policy hardens.
Washington has imposed a 35 percent tariff on Canadian goods not covered by the USMCA and a 50 percent duty on Canadian steel and aluminium, while US President Donald Trump has repeatedly threatened to end trade talks with Canada, reported by Business Insider.
Ottawa has responded by accelerating trade moves in Asia and the Gulf, including a new comprehensive free trade agreement with Indonesia, a bilateral investment treaty and expanded air-services pact with the United Arab Emirates, and a push for a free trade agreement with ASEAN by the end of 2026.
Despite the tariff shock, Canada reported 2.6 percent GDP growth in Q3 2025, beating a 1.8 percent projection.
But trade experts quoted by Business Insider argue that the real hedge lies in doing much more with markets where Canada already has a foothold—and Latin America sits near the top of that list.
