Well, who saw that coming? Yesterday’s threat from President Donald Trump – that Canada would face 100% tariffs on all exports to the United States (US) if it “does a deal with China” – was widely reported and widely derided in Canadian political circles.Yet if you strip away the hyperbole and the social media grandstanding, Trump’s response was both predictable and in a narrow strategic sense, reasonable. Think about it; to establish a continental security perimeter against Russia and China, he’s trying to get his hands on Greenland. But even as he’s doing that, the Government of Canada is opening up a backdoor entry point to China.Make no mistake: Ottawa’s recent pivot – of which Prime Minister Mark Carney’s provocative speech at Davos and embrace of China as a “reliable and predictable partner” – was bound to trigger a backlash from Washington. (Dear heavens, it’s triggering a backlash in Canada, among Canadians who much as they regret the damage done in Canada by Mr. Trump’s America First actions, certainly don’t want China as their new best friend. They don’t think like us.).So in the hyper-competitive world of geopolitics, every sign of drifting away from the US orbit invites scrutiny. Mr. Carney may feel obliged to assure Canadians he is “standing up” for them, but China’s record of election interference, imprisonment of Canadian citizens and his own long, well-documented ties to Chinese political and financial elites before entering Canadian public life make his getting caught between two big powers seem like the crisis he always dreamed of.The facts are that whatever the attitude of President Trump or Mr. Carney, Canada’s economic lifeblood remains thoroughly intertwined with the United States. Even as Ottawa tries to diversify, nearly 70% of Canadian exports still go to the US – dwarfing trade with China. By contrast, even as China is Canada’s second-largest single-country trading partner, total bilateral trade in 2025 – roughly $29 billion in the third quarter – pales against US trade figures and has shown volatility and contraction. This reality matters: Canada’s prosperity has been built on the foundation of deep, mutual market access with its nearest neighbour, not transactional deals with distant powers..To that point the domestic debate over Chinese electric vehicles (EVs) underscores another common misunderstanding. Some commentators scoff at the idea that allowing a quota of Chinese electric vehicles – initially capped at around 49,000 units – really matters. But they miss the point: that quota doesn’t stand alone. It’s not as if these cars are going to be sold from a trailer in the quiet corner of a supermarket parking lot. Rather, it implies dealerships, and more coming next year. It means the crafting of legal, institutional, and long-term commercial frameworks that will make Chinese EVs and related supply chains a lasting feature of the Canadian market. In other words, this isn’t a one-off import trickle; it’s the opening salvo in a years-long effort to embed China more deeply in Canada’s economic life.A Canadian government that prides itself on sovereign decision-making should think carefully about the wisdom of this strategy. Diversifying trade is one thing; strategically tilting toward a geopolitical rival of the US is another. Trump’s tariff threat may be blunt — but it is rooted in a clear American calculus: if Canada becomes a backdoor conduit for goods from a strategic competitor, Washington’s economic interests are directly challenged. That’s not paranoia; that’s straightforward realpolitik..And by the way, Trump is one of a kind and in slightly less than three years, somebody else, probably with more familiar ideas, will be up to bat.If Canada’s leadership wants to pivot away from economic dependence on the US, there are many other markets with shared values and strong growth prospects — Europe, South Asia, ASEAN – where increased engagement makes sense without singeing relations with Ottawa’s closest ally. Instead, what we are watching is a rash flirtation with a geopolitical heavyweight whose interests don’t align with ours.In my view, Mr. Carney doesn’t care much for American values but for whatever reason – it’s a mystery to me – is comfortable with how Chinese leaders think.Mr. Carney needs to rethink his gambit. Diversification doesn’t require trading America’s friendship for China’s uncertain largesse – especially when the numbers clearly show the vast asymmetry between our trade with the US and our trade with Beijing.To be succinct, Canada has always prospered by walking the tightrope between global powers. But there is no profit in falling off.
