Trump’s Trade War Is Steering Canada Closer to China

Until just a year ago, it was almost unimaginable that Canadian and Chinese leaders would appear side by side, smiling for cameras.

The relationship between Ottawa and Beijing collapsed in late 2018 after the Canadian authorities detained Chinese tech executive Meng Wanzhou in Vancouver on U.S. fraud allegations. In retaliation, Beijing detained the Canadians Michael Kovrig and Michael Spavor on charges of espionage; accusations Canada dismissed as politically motivated. Both were ultimately released almost three years later after the U.S. dropped its extradition request against Meng.

Warming Relations Begin to Show

That shift began last month when Canada's foreign minister Anita Anand traveled to Beijing to meet her Chinese counterpart Wang Yi. That was soon followed by a 40-minute meeting between Prime Minister Mark Carney and President Xi Jinping at the APEC summit in South Korea — their first meeting in eight years.

Both sides referred to that meeting as a "turning point," with commitments to rebuild trade relations and strengthen cooperation. Ottawa even confirmed that Carney planned a future visit to China.

In the ensuing weeks, further ministerial trips occurred, and China readmitted Canada to its list of approved travel destinations — a change that will likely increase Canadian tourism revenues.

Yet some experts suggest that Beijing might try to take advantage of the economic vulnerability facing Canada at this time.

"China seeks to drive a serious wedge between Canada and the United States," said Michael Kovrig, now a senior adviser at Crisis Group. "The last thing Beijing wants is a strong, united Western front trying to limit its global ambitions."

Economic Strains Drive Cooperation

Both countries have strong economic reasons to reduce tensions.

The country last year imposed a 100% tariff on Chinese electric vehicles amid similar U.S. attempts to counter what it considered unfair competition provided by state-supported Chinese car manufacturers.

China retaliated with a list of tariffs of its own, including the imposition of a 100% tax on Canadian agricultural exports like canola oil and meal. In August, Beijing added another 75.8% levy on canola seed, severely hurting Canadian farmers and closing off one of their biggest markets.

Meanwhile, the relationship between Canada and the U.S. has soured. Negotiations between President Trump and Prime Minister Carney were called off abruptly last month after an anti-tariff campaign by the Ontario government angered Washington.

With the U.S. turning into an increasingly unpredictable trade partner, Canada can't afford conflicts with both of the world's largest economies at the same time. China, thus, becomes a more and more attractive alternative - albeit a rather complicated one.

"Canada's tone toward China has dramatically changed," said Lynette Ong, director of the China Governance Lab at the University of Toronto. "The change reflects necessity - a fundamental rethinking of the relationship."

China, in turn, has indicated it could drop tariffs on Canadian canola if Ottawa removes its taxes on Chinese EVs.

"The enemy of our enemy is our friend," Ford said, according to The Canadian Press. "I don't see Americans as enemies, but right now President Trump is acting like one."

“The reality is, when your largest market shuts you out and imposes punishing tariffs, you’re forced to look for other partners,” said Fen Hampson, chancellor’s professor at Carleton University.

Still, he warned that closer ties with China could see Canada being pushed further away from Washington. “It’s a geopolitical puzzle the government has to navigate carefully,” he said.

China’s Calculated Outreach

Since Trump's return to the office, Beijing has taken a noticeably softer and more flexible approach in foreign relations, says Brian Wong from the University of Hong Kong.

Wong said Chinese officials are trying to “show goodwill toward long-standing partners of the U.S. who may feel disillusioned by Washington’s inconsistent policies.”

Beijing has been closely observing tensions between Ottawa and Washington, and it doubtless senses opportunity in their deepening rift.

Risks and Realignments

Some analysts say that now is the moment for Canada to position itself as a bridge between the U.S. and China, with geography and neutrality on its side.

"Canada has a chance to play a unique mediating role," Ong said.

Kovrig added that Xi’s public embrace of Carney sends a powerful internal message in China that cooperation with Canada is back on the table. But he also warned that China will expect conditions in return, particularly when it comes to Taiwan and human rights issues. "Beijing is trying to tie political cooperation and access to its leadership to respecting what it calls its ‘core interests,'" he said. "If you alienate your closest trading partners, don't be surprised when they start negotiating with your main rival."