The recent announcement of a strategic trade agreement between Canada and China, following Prime Minister Mark Carney’s visit to Beijing, comes at a moment when the United States has signalled a renewed and active focus on securing the Western Hemisphere.
Just a month earlier, the White House’s National Security Strategy paper stated Washington’s intent to treat the Western Hemisphere as its “primary theatre”, reviving a new version of the Monroe Doctrine and explicitly warning against the presence of any external powers seeking influence in the region. Against this backdrop, Ottawa’s pivot towards China, whether framed as pragmatism or economic diversification, is bound to reshape its geopolitical positioning.
While the details of the trade deal remain confined to a joint communiqué which has been published, the symbolism cannot be missed by the strategic community. Canada has been one of the most economically dependent allies of Washington for years. Its willingness to diversify strategic and economic partnerships in defiance of Washington’s discomfort with non-hemispheric powers underlines how central the Trump factor is to this strategic response.
However, what is not very obvious is how Canada seeks to assert its autonomy in a highly polarised world order while moving closer to similarly assertive superpowers. For China, this agreement is clearly an entry point into a region historically insulated from rival great-power influence. However, this situation, and its complex relationship with Canada, requires closer inquiry.
Details of the Trade Deal
While responding to economic compulsions and domestic political pressures, Canada’s recent engagement with Beijing is a calibrated power play to shift away from current economic dependencies. In the in-principle agreement signed between Prime Minister Carney and Xi Jinping, six additional cooperation documents were collectively agreed upon, signalling a broad-based bilateral engagement between the two countries.
These include a Memorandum of Understanding (MoU) on cooperation in combating crime between the Royal Canadian Mounted Police and China’s Ministry of Public Security; an MoU between Natural Resources Canada, British Columbia’s Ministry of Forests, and China’s Ministry of Housing and Urban-Rural Development on modern wood construction; a Canada–China Economic and Trade Cooperation Roadmap; an MoU on cultural cooperation between Canadian Heritage and China’s Ministry of Culture and Tourism; an MoU between the Canadian Food Inspection Agency and China’s General Administration of Customs on food safety and animal and plant health; an MoU on strengthening energy cooperation between Natural Resources Canada and China’s National Energy Administration; and a Letter of Intent for cooperation between Destination Canada and China Media Group.
At the very core of the trade agreement is the introduction of a country-specific quota allowing the import of up to 49,000 Chinese electric vehicles annually at a Most Favoured Nation tariff rate of 6.1 per cent. This provision is particularly important given Canada’s deep embeddedness within the US automotive ecosystem. If pushed towards fruition, the deal will allow Ottawa to diversify its domestic automobile market while responding to unemployment in the sector, which was further exacerbated by US tariffs and supply-chain disruptions.
Beyond automobiles, Canada anticipates expanded market access in China for key agricultural exports such as canola oilseeds, lobsters, peas, crabs and other products. This similarly reflects an intention to diversify export destinations and reduce vulnerability to volatile Atlantic and Pacific markets. Perhaps the most ambitious element of the agreement is Canada’s target to increase its exports to China by 50 per cent by 2030. While this goal will ultimately hinge on market dynamics and, more importantly, strategic calculations, reactions in the United States already reveal the degree of discomfort Washington is willing to exhibit towards such new partnerships in its immediate neighbourhood.
Strategic Shift?
For much of the past decade, Ottawa’s China policy has been constrained by its deep economic and security integration with the United States. Under the Trudeau administration, Canada largely aligned itself with Washington’s China-containment posture due to limited strategic options. The 2018 arrest of Huawei executive Meng Wanzhou marked the beginning of a deeply strained relationship with Beijing, which retaliated with tariffs and detained two Canadians for 1,000 days. These episodes serve as a reference point for the risks of engagement with Beijing.
However, this turn towards Beijing—from “disruptor” to “partner”—is complicated by the adversarial history shared by the two countries. From allegations of Chinese interference in Canadian electoral politics to the characterisation of China as a “significant foreign threat”, Canadian political discourse has never viewed Beijing as a reliable partner, and for justifiable reasons. Even Prime Minister Carney, in earlier statements, had identified China as the “greatest geopolitical threat”.
In this context, the shift must be understood primarily as pragmatic hedging in what Ottawa increasingly perceives to be a new world order. The Trump factor is undeniably central to this recalibration. Yet Canada–China relations cannot be anchored merely in anti-Trump positioning. Structural friction points will persist, from Canada’s formal endorsement of the One China policy alongside its concerns over the status of Canadians in Hong Kong, to unease over Beijing’s growing tendency to weaponise trade—much like Washington has done in recent years.
What Does China Want from Canada?
From Beijing’s perspective, Canada represents a strategic gateway. While previous administrations, including Trudeau’s, attempted to reset China relations, these efforts ultimately collapsed under political pressure. For Beijing, Canada offers both a source of critical commodities and natural resources, and a relatively stable gateway into North America’s economic ecosystem. The recent opening for Chinese electric vehicles also provides an opportunity to expand manufacturing footprints into a highly regulated, high-income market, thereby legitimising Chinese EVs as globally competitive. More importantly, Canada offers China a less politically hostile terrain than the United States for testing diplomatic penetration into the Western Hemisphere.
However, Ottawa must proceed with caution. Superpowers exhibit similar tendencies. Canada’s over-dependence on North American supply chains means that accommodating Chinese EVs will attract domestic adjustment costs and, more importantly, provoke reactions from Trump. Moreover, as the National Security Strategy makes clear, Washington is determined to “secure the hemisphere”, making any Chinese expansion into Canada a strategically sensitive issue rather than a purely bilateral matter.
Conclusion
It must be kept in mind that weaponising trade is not a Trump-specific characteristic. China has also demonstrated a consistent—and more systematic—tendency to convert economic dependence into political leverage, as seen in Australia and in more recent examples from South Asia. For this reason, Ottawa must approach engagement with Beijing with caution and restraint. While China is undeniably a major economic power and now a partner, Canada cannot afford to detach itself from its geography or frame China as a US alternative. It must diversify beyond both the United States and China, avoiding entrapment in binary choices.
In this context, Canada-China relations are bound to be complex, and Trump’s unpredictability will further accentuate the asymmetry. While engagement with China should remain selective and sector-based, Ottawa must firmly restrict Chinese access to sensitive sectors and avoid compromising its strategic autonomy in the backyard of competing great powers.
(Upamanyu Basu is an Assistant Professor of Political Science in Manav Rachna International Institute of Research and Studies. The views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost’s views.)
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