(Bloomberg) — China’s share of Canadian trade has risen to record levels, even as the two nations go through their worst diplomatic crisis since they established ties. And Covid-19 is a big part of the reason why.

While the Asian powerhouse returns to more normal levels of economic activity, lockdowns are hurting commerce with the U.S., Canada’s biggest trading partner.

Total exports and imports with China represented 6.9% of Canada’s global merchandise trade so far this year. That’s almost a full percentage point higher than the average in the previous three years, and it’s the highest share on record, according to data released Tuesday by Statistics Canada.



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The increase in China’s trade share reflects the fact shipments between the two countries are holding up, little changed from a year ago. Meanwhile, the flow of merchandise with the U.S. is down 17% this year, and now represents 67% of the total, compared with 69% on average in previous years.

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While imports of Chinese consumer goods are a major factor, the shift is also apparent in one Canada’s most important sectors: oil. Traditionally, almost the entirety of Canadian crude exports went to the U.S., and shipments to Asia were rare. But with its southern neighbor awash with oil that refineries don’t need when so many Americans are working from home, at least eight oil tankers have left Vancouver for China this year.

The stable trade flows with China are in stark contrast to the tattered foreign relations between the two countries, which cratered after Canada’s arrest of a top Huawei Technologies Co. executive in late 2018 and the subsequent detainment of two Canadians by the communist government in Beijing.

(Updates with oil shipments in fifth paragraph)

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