Canada’s Japan Reset

Tokyo was not a routine trade mission. It was the first visible layer in Carney’s long diversification strategy — and now France and Italy need the same push.

So what exactly happened in the Canadian world last week? Why did Trade Minister Maninder Sidhu lead nearly 300 delegates, representing about 175 Canadian business organizations, into Tokyo?

The answer is sitting in the charts.

Japan has not been keeping well for a while. It is not collapsing. At 0.7% growth in 2025, it was not exactly doing horribly either. But it is an economy under pressure: slow growth, stubborn inflation, energy insecurity, demographic strain, and rising trade uncertainty.

And then look at Canada’s numbers.

Among Canada’s top five non-U.S. two-way merchandise trade markets, Japan is the one where the relationship moved in the wrong direction. China rose. Mexico rose. The United Kingdom surged. Germany climbed. Japan slipped.

That is the problem.