Commentary
Canadian Prime Minister Mark Carney was in China recently making trade agreements and talking about “new global realities” and a “new world order.” It was a major shift from his campaign rhetoric, when he answered a question about Canada’s biggest security threat with one word: “China.” His language was likely meant to flatter China’s dictator, Xi Jinping, and chasten U.S. President Donald Trump. It could fail at both. Mr. Xi expects subservience from China’s trade partners and Mr. Trump is not easily cowed.
Beijing wants China to displace the United States as a global “hegemon.” Doing so requires changing the “old world order,” which since World War II the United States has largely led. Beijing wants the chance to compromise U.S. allies like Canada through trade deals, and move the world’s diplomatic and economic centers, including the United Nations, World Bank, and International Monetary Fund, away from the United States. An optimal solution for the Chinese Communist Party (CCP) would be to move them to Beijing and Shanghai rather than New York and Washington, D.C.
Mr. Carney’s “new era” remarks in Beijing were one possible step towards that end. He said that Canada’s “new strategic partnership” with China includes “our commitment to multilateralism and strengthening global governance.” He referred to closer Canada-China law enforcement cooperation and a new set of Canadian trade relationships, including with China. He said that by 2030, Canada would produce 50 million tons of liquified natural gas annually, “all of which will be destined for Asia.” He apparently seeks to retaliate against U.S. tariffs with a Canadian reorientation of at least some of Canada’s trade towards China.
The apparent retaliation is for two of Canada’s top complaints against the United States, including Washington’s “trade war” of increased tariffs on Canada, and U.S. consideration of military options in the acquisition of Greenland from Denmark, a NATO ally of both the United States and Canada. In response to questions about U.S. plans for Greenland, Mr. Carney noted that he discussed them with Mr. Xi. He said he intends to honor Canada’s NATO obligations, which implies that Canada would help Denmark militarily defend Greenland from the United States.
U.S. tariffs have incentivized some of Canada’s auto industry to move to the United States. The Canadian deal with China is meant to respond to this issue, but fails on multiple metrics. The deal decreases Chinese tariffs on Canadian agricultural exports in exchange for decreasing Canadian tariffs on Chinese electric vehicle (EV) exports. That gives China a foot in the door of Canada’s auto market, ultimately increasing the pressure on Canada’s auto industry. It also improves the international trade environment for China’s automotive and battery sectors, making them more formidable challengers to European carmakers.
By Anders Corr
