Latin America Set to Boost Exports to Canada Amid Rising U.S. Tariffs

Context: A Trade Shift Driven by Tariffs

As a wave of new tariffs enforced by the Trump administration disrupts traditional trade routes, Canada is diversifying its supply chain by strengthening economic ties with Latin America. These shifts are not only strategic but also timely for exporters seeking to expand into Canada.

U.S. President Trump has imposed tariffs as high as 25% on Canadian exports such as steel, aluminum, and automotive components, citing trade imbalance and national security reasons.

In response, Canada retaliated by applying 25% tariffs on C$30 billion worth of U.S. goods, including beverages, electronics, and apparel. A national support package exceeding C$6.5 billion has also been launched to help businesses pivot into new markets—including Latin America.

1. Rising Economic Momentum from Latin America

A study by World Grain reports that Latin American agrifood exports—particularly fresh fruits and vegetables—are expected to surge under current trade dynamics.
In one scenario without reciprocal tariffs, exports from the Andean region (e.g., Colombia, Ecuador, Venezuela) could rise 10–13%, particularly in fruits, vegetables, and processed foods.
Under a retaliatory scenario, these numbers climb even further, suggesting strong business opportunities.

Simultaneously, trade talks between Canada and Brazil’s Mercosur bloc are being revived, opening doors for items like beef, soybeans, and minerals.

2. Canada’s Strategic Pivot Toward LATAM

Canadian Prime Minister Mark Carney is scheduled to visit Mexico to strengthen trade collaboration, underscoring Canada’s intent to align with non-U.S. partners under mounting tariff pressures. Both leaders emphasized navigating trade within the U.S.–Mexico–Canada Agreement (USMCA) while expanding bilateral trade beyond Washington’s influence.

Together, the diversification strategy includes:

• Reopening Mercosur negotiations quickly and strategically

• Strengthening alliances with Mexican and Latin American partners

• Launching financial support programs for exporters looking to enter new markets

3. The Growing Trade Opportunities

Export Growth Trends:
The ripple effect of tariff retaliations is creating heightened demand for Latin American agriculture, particularly in fruits, vegetables, coffee, tea, and processed foods through Canada and the U.S. border.

New Trade Channels:
As traditional North American supply chains face instability, Canada is turning to LATAM as a reliable alternative—reinforced by negotiation momentum with Mercosur and Mexico.

Government Incentives:
Canada’s C$6.5 billion trade stimulus includes funding, low-interest loans, and export programs tailored for sectors like agriculture, enabling Latin American exporters to navigate entry costs while expanding into Canada.

4. What This Means for LATAM Exporters

Canadian Market Needs | Latin American Opportunity

• Reduced reliance on U.S. supply chains | Export fresh produce and processed foods

• Access to diversified trade partners | Leverage Mercosur & USMCA-aligned trade agreements

• Financial support for entering new markets | Tap into C$ support package and expedited trade access

Key Outlook for LATAM Exporters:

• Fresh produce demand (fruits/vegetables) trending upwards

• Trade corridors opening via renewed agreements

• Financial incentives and trade expertise now available to ease market entry

Conclusion: A Turning Point in Global Trade Strategy

With growing U.S. tariffs, Canada is strategically seeking partnerships across Latin America—not just to cushion impact but to foster long-term supply diversity. For agricultural producers, food processors, and exporters in LATAM, this environment marks a unique window to accelerate EU and global market entry via Canada.

At LBS, we specialize in guiding Latin American businesses through this transformational moment—helping with market entry strategy, regulatory compliance, and export logistics in Canada. Let’s turn trade adversity into opportunity together.