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Canada and South Korea have taken new steps to strengthen trade ties that are expected to boost several industrial sectors in Canada, including automotive and critical minerals.
This comes in the middle global trade war and US tariffswhich affected Canada’s economic growth and labor market, forcing the federal government to seek alternative trade partners and work to remove interprovincial trade barriers reduce reliance on the US
On Wednesday, Canada’s industry minister Melanie Joly they met in Ottawa with their counterparts from the Republic of Korea and signed a Memorandum of Understanding (MOU) between the two nations.
Details of the agreement were outlined in a press release, which includes the establishment of a Canada-Korea Industrial Cooperation Committee to work together on what they call “the mobility of the future.”
Areas the board will focus on, according to the statement, include establishing a Korean automotive manufacturing footprint in Canada, with electric vehicle manufacturing opportunities among the investments, although no specific amounts were mentioned.
Artificial intelligence was also one of the “strategic sectors” mentioned as part of the agreement, but no other details were given.
In addition to the auto manufacturing sector, the statement said the agreement means further cooperation with South Korea on Canada’s battery supply chain. This means the production of batteries, the processing and purification of materials, as well as the critical processing and recycling of minerals.
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Canada could also increase some of its exports to South Korea as part of the deal, according to Tim Hodgson, Canada’s energy and natural resources minister, who was quoted in a statement as saying the MoU means “diversifying our exports,” but gave no other details.
“This memorandum of understanding reflects Canada’s strategic approach to building a secure, competitive and sustainable energy future,” Hodgson said in a statement.
“Canada and the Republic of Korea are trusted partners, and by deepening cooperation on critical minerals, clean energy technologies and energy security, we are diversifying our exports and strengthening resilience on both sides of the Pacific.”
Critical minerals are one of the key economic projects of national interest outlined below Ottawa’s 2025 budgetwith Canada’s vast abundance of minerals such as nickel, cobalt, graphite and lithium, which are needed for battery production, energy storage, wind turbines and many other applications as part of the green energy transition.
According to International Energy Agencythe global transition away from fossil fuels means that demand for critical minerals could increase up to sixfold by 2040.
The statement said that by working with South Korean partners, Canada will “strengthen the automotive supply chain and improve cooperation on key mineral supply chains, the clean energy transition and energy security.”
It added that through this collaboration, Canada would “create opportunities and good-paying jobs for Canadians,” although no further details were provided on the number or types of jobs that could be created.
“Canada is an automotive nation and home to world-class workers, cutting-edge innovation and some of the best vehicles produced anywhere in the world. This new memorandum of understanding with Korea strengthens that legacy and positions Canada to lead the next generation of automotive excellence,” Joly said in a statement.
“By deepening collaboration in EVs and hydrogen mobility, expanding battery and key minerals partnerships and attracting high-value investment to Canadian communities, this agreement will grow our automotive sector, create good jobs and strengthen Canada’s position as a global leader in future-ready vehicles.”
No details were given on the companies involved, but some of the world’s biggest car brands based in South Korea include Hyundai Motor Group, which is also behind the Kia and Genesis brands.
— With a file from Global News’ Bryan Mullan.
© 2026 Global News, a division of Corus Entertainment Inc.
