The dispute between Canada and the United States (US) is usually described as another argument over tariffs. Steel, aluminum, automobiles, and agriculture dominate the headlines, but those are the visible symptoms of a much larger disagreement.Washington is trying to build a protected North American economic and security bloc capable of competing with China. Mark Carney is trying to reduce Canada’s dependence on the US by expanding trade with China, Europe, and other markets. Those strategies are now colliding, and Canada cannot pretend indefinitely that it can pursue both.Carney made his intentions clear during his January visit to Beijing. He announced a “strategic partnership” with China, set a target to increase Canadian exports there by 50% by 2030, and welcomed greater Chinese investment in Canadian energy, agriculture, manufacturing, and consumer products. China would reduce punitive tariffs on Canadian canola and several other agricultural exports. Canada, in return, would reopen its market to as many as 49,000 Chinese electric vehicles annually at the normal 6.1% tariff rather than the previous 100% surtax.Carney presented this as practical diversification. Prairie farmers would regain access to China’s enormous canola market, Canadian consumers would get cheaper electric vehicles, and Canada would become less vulnerable to Washington. Each objective can be defended on its own. The problem is that Washington does not view Chinese trade as an ordinary commercial matter. It sees China as its principal industrial, technological, and military competitor.That is particularly true of electric vehicles. China has built massive EV production capacity through subsidies, cheap financing, protected domestic markets, and control over much of the battery supply chain. The US imposed high barriers to keep Chinese vehicles and components out. Washington’s concern is not merely that Canada will buy 49,000 Chinese cars. It is that Chinese manufacturers could eventually use Canadian assembly plants, joint ventures, or component operations to gain preferential access to the American market.Carney’s government has encouraged precisely that possibility. Its new automotive strategy proposes Chinese joint-venture investment in Canada alongside increased Chinese EV imports. From Ottawa’s perspective, that could produce factories and jobs. From Washington’s perspective, it could create a Chinese industrial beachhead inside the North American supply chain..The steel dispute raises the same concern. Canada imposed tariffs on steel melted and poured in China and tightened import quotas after complaints that heavily subsidized foreign steel was flooding the Canadian market. Yet the China arrangement also extended tariff remissions for numerous Chinese steel and aluminum products said to be unavailable in sufficient quantities domestically. The government described these as limited, necessary exceptions. Washington sees another potential opening through which Chinese material can enter an integrated continental market.Canada’s steel industry strongly denies that it serves as a transshipment route. Industry representatives say that roughly 95% of the steel Canada sends to the US is melted and poured within the Canada–US–Mexico region. That is important evidence and should not be ignored. Canada should not be casually accused of becoming a warehouse for Chinese steel when most Canadian exports are legitimate North American products.However, Washington’s concern is not entirely imaginary. In May, two Canadian steel companies and their president agreed to pay US$19 million to settle allegations by US Customs involving flat-rolled steel manufactured in Europe and Asia. The settlement resolved allegations that duties were knowingly avoided; it was not a judicial finding that the entire Canadian steel industry was engaged in transshipment. Still, it gave American officials a concrete example of why origin rules and enforcement matter.Forced labour has become another part of the same argument. Canada prohibits the importation of goods produced by forced labour, but enforcement has been feeble. A 2026 investigation by the US Trade Representative concluded that Canada had failed to enforce its prohibition effectively. The accompanying report noted that Canada had detained only a handful of shipments and had not consistently acted against goods already barred by American authorities.That matters because the US presumes many products from China’s Xinjiang region are connected to forced labour unless importers prove otherwise. Canada has no equivalent system of comparable reach. Goods rejected at the American border can therefore be redirected into Canada, undercutting Canadian businesses and potentially entering continental supply chains through finished products. Whether every American tariff response is reasonable is a separate question. The enforcement gap itself is real.The strategic warning was written into CUSMA from the beginning. Article 32.10 requires a member negotiating a free-trade agreement with a non-market economy to notify the other parties, disclose the proposed agreement, and accept that the other two could replace CUSMA with a bilateral deal. It does not give Washington an automatic veto over every Canadian arrangement with China. It does, however, make the political choice unmistakable: privileged access to the North American market was never intended to coexist easily with a separate Chinese trade strategy..Carney understands that conflict. His language about a “new world order” did not begin when he entered politics. In a 2019 Bank of England speech, he called Brexit the “first test” of a new global order. Another speech that year was explicitly titled Sustainable Capital Flows for a New World Order. He also proposed moving over time toward a multipolar international monetary system less dominated by the American dollar.Carney has long believed that American economic dominance should give way to a more diversified and multipolar system. In Beijing, he said the new Canada–China partnership would position both countries well for the “new world order.” Days later at Davos, he declared that the old order was not coming back and urged middle powers to build alternative coalitions.Washington heard him. American officials see secure supply chains, domestic manufacturing, energy, critical minerals, technology, and trade enforcement as parts of a single continental security policy. Carney sees excessive dependence on the US as a vulnerability to be reduced. Neither position is difficult to understand, but they point in opposite directions.Canada can trade with China while remaining a close American ally. What it cannot do is grant China steadily greater access to Canadian manufacturing and supply chains while assuming that the US must continue to offer Canada unrestricted entry into its market. The Americans will demand stricter rules of origin, tougher transshipment controls, genuine enforcement of forced-labour laws, and limits on Chinese participation in strategic industries.Washington is deciding who belongs inside its economic-security perimeter, while Carney is deliberately building alternatives to American dominance. Canada is trying to face south and west at the same time.For Alberta, the danger is obvious. Our oil, natural gas, agriculture, and industrial economy are tied overwhelmingly to the US, yet Ottawa is risking that relationship to pursue a global strategy designed in central Canada. If Carney chooses his “new world order” over secure access to the North American market, Alberta will bear a disproportionate share of the cost. Canada may want strategic ambiguity, but Washington is rapidly removing that option. Sooner or later, Canada will have to choose; and Alberta should not allow Ottawa to make that choice on our behalf.
