Canadian exporters are increasingly looking to diversify beyond the United States as trade uncertainty persists, with 72 per cent planning to enter new markets over the next two years, according to a new survey from Export Development Canada.
The share of exporters planning to expand into new markets rose from 65 per cent five months earlier, while the overall Trade Confidence Index increased to 71.7 from 69.7 at the end of 2025.
The findings were collected between June 8 and July 27, before the United States imposed 50 per cent tariffs on a range of Canadian goods on Aug. 22 under Section 338 of the U.S. Tariff Act of 1930. EDC said those tariffs are therefore not reflected in the survey results.
Exporters pursue new markets and investment
The survey suggests Canadian businesses are responding to trade uncertainty by broadening their international strategies while also strengthening their domestic operations. Exporters combining exports and imports with other trade activities, including domestic sourcing and investment in Canada and abroad, reported the highest levels of confidence.
"Canadian businesses are demonstrating their resilience and confidence by building on their strengths at home while pursuing opportunities around the world," says Maninder Sidhu, Minister of International Trade. "That is why Canada's goods exports to non-U.S. markets grew by 17% last year, an increase of more than $33 billion, as more businesses take advantage of the trade agreements that we're securing. As exporters diversify and expand their global reach, we are moving at speed to unlock new trade partnerships, reduce barriers, and provide targeted support to help Canadian businesses compete and grow."
Europe was identified as the most attractive destination for exporters seeking new markets, with 31 per cent citing the region, followed by the Asia-Pacific region at 20 per cent.
The leading reasons businesses gave for pursuing new markets were to add new revenue streams, cited by 24 per cent of respondents; widen their customer base, at 21 per cent; and respond to favourable market conditions, at 20 per cent.
Foreign investment is also becoming a larger part of exporters' strategies. More than one-third, or 34 per cent, of respondents said they are currently investing outside Canada, up from 29 per cent at the end of 2025. Exporters with foreign investments reported higher levels of trade confidence.
Globally integrated businesses report higher confidence
Businesses operating in both the U.S. and other markets had a Trade Confidence Index score of 72.7, compared with 69.5 among those focused exclusively on the U.S.
Those with operations in both markets also reported higher participation in other trade integration activities. That included purchasing from Canadian suppliers, at 84 per cent; investing inside Canada, at 71 per cent; importing, at 70 per cent; and investing outside Canada, at 41 per cent.
Domestic sales and investment strengthen
Domestic sales are also becoming a more positive area for exporters. More than half, or 55 per cent, expect their domestic sales to increase over the next six months, compared with 48 per cent at year-end 2025.
EDC said the strongest improvements in confidence were associated with easing inflation, stabilizing interest rates, increased demand and greater support for Canadian products and services.
Businesses are also reporting increased investment in productivity-enhancing areas, including intellectual property and software, cited by 32 per cent of exporters, and advanced machinery and equipment, at 30 per cent.
"Canadian exporters are adjusting to a new reality where uncertainty is not a temporary disruption, but an ongoing feature of the global trade environment," said Stuart Bergman, Chief Economist at EDC. "What we're seeing is a shift from a reactive mindset to one of greater resilience and resolve. Businesses are bolstering their domestic operations, investing in productivity, and strengthening their supply chains--all of which enhances their ability to break into new export markets. For many exporters, domestic strength is becoming the foundation that supports long-term, diversified global growth."
Exporters look to reduce U.S. exposure
At the same time, exporters reported weakening demand from the U.S. Nearly one-third, or 32 per cent, said orders from the market had declined over the previous six months. Looking ahead, 42 per cent expect sales in the U.S. to remain at lower levels, while 21 per cent expect sales to decline further.
Exporters said they are responding by increasing domestic sales, cited by 29 per cent; sourcing locally, at 22 per cent; accepting lower profit margins, at 20 per cent; and expanding into new export markets, at 19 per cent.
Despite the diversification efforts, the U.S. remains the dominant export market, with 81 per cent of exporters currently active there. EDC said geographic proximity, integrated supply chains and long-standing business relationships remain factors in that activity.
Domestically, 66 per cent of exporters said they already invest in Canada, while another 18 per cent plan to invest in the country.
Confidence remains lowest among the manufacturing and agriculture and forestry sectors, which recorded Trade Confidence Index scores of 67.6 and 68.1, respectively.
The mid-year Trade Confidence Index survey received 1,015 responses, with 790 respondents completing all five questions used to calculate the overall index. EDC has surveyed Canadian exporters and businesses planning to export twice a year since 1999, with the index measuring expectations for international trade opportunities over the following six months.