The Impact of Trump 2.0 on Canada’s Key Relations in Asia

0
The Impact of Trump 2.0 on Canada’s Key Relations in Asia

Irritants in the bilateral relations persisted last year, mainly centring around Chinese political interference investigations, ongoing geopolitical tensions, and new Canadian tariffs on Chinese EVs, aluminum, and steel. Nevertheless, Ottawa managed to reopen high-level communications channels and stabilize its relationship with Beijing. A surprise visit by Canadian Foreign Minister Mélanie Joly to China in July and the subsequent resumption of frequent flights between countries suggest, in part, a return to pragmatic diplomacy. 

Jia Wang
Jia Wang

The start of a second Trump presidency and an expected changing of the guard in Ottawa, however, will likely unsettle this nascent stability. 

Trump’s transactional, impulsive, and isolationist approach to foreign affairs, security and international trade — realms in which China remains America’s chief rival — will create challenges for Canada. Even before resuming office, the president-elect promised sweeping tariffs on Chinese exports yet expressed keenness to work with “his friend” Chinese President Xi Jinping to possibly solve all world’s problems. Attempting to align with Washington’s varying tactical manoeuvres towards Beijing could lead to greater uncertainty in Canada’s dealings with China. 

Ideology and democratic values are not important considerations for Trump, though his key cabinet picks such as Marco Rubio (for Secretary of State) and Mike Waltz (for National Security Adviser) hold contrasting views. Downgrading America’s strategic allies to transactional and pay-for-protection partners appears a real possibility. The U.S. will become a less dependable supporter for Canada as Ottawa navigates the challenges with Beijing. 

As the U.S. accelerates its retreat from multilateralism under Trump, Canada will encounter an evolving dynamic of increasing multipolarity and greater PRC presence in various global domains (economic, security, technology, environment and beyond) and international organizations such as the WTO and the UN. 

The need for Ottawa to co-operate more closely with European and Indo-Pacific allies will intensify if Canada plans to continue its values-based strategic alignment to counter China’s influence. On the other hand, Canada might still find common ground with China in preserving and reforming multilateral frameworks especially for trade and climate.

China watchers argue Beijing is better prepared to deal with Washington under the second Trump term. As the sole G2 peer, Chinese leaders seem ready to engage directly with Trump by potentially offering him “personal wins” while playing hard ball at the negotiating table. Swift Chinese countermeasures against new U.S. export controls on China’s chips industry signal a shift to stiffer pushbacks. Direct bargaining between the world’s two largest economies could come at a cost for Canada. Canadian farmers and energy producers may feel the squeeze should China agree to buy more American agricultural or energy products similar to the later abandoned deal made during the first Trump presidency. 

The Chinese economy will face strong headwinds in 2025 with notable implications for Canada. If China’s GDP growth continues to slow as forecasted, Canada will feel the pinch of flat international commodity prices and a lacklustre global market. While bilateral trade volume has grown steadily despite frosty relations between Ottawa and Beijing over the past years, new opportunities and barriers are emerging. 

In building economic resilience as a defence to Trump 2.0., China has introduced fresh incentives such as reduced tariffs to expand trade with third countries. Trade was featured prominently as China sought to improve ties with India, Japan, Australia, EU countries, and other Asian neighbours. Trump’s threat to slap tariffs on allies and rivals alike opens doors for China to generate rapport among developing and advanced economies, including Canada. 

A weaker yuan and Canadian dollar against the greenback and pressure to lessen reliance on the U.S. market could motivate the two countries to expand commerce in 2025. 

However, a new source of friction recently surfaced when the Canadian government proposed fresh levies mirroring the American position on Chinese solar products, critical minerals semiconductors, and other exports. Once implemented, they will predictably prompt retaliatory responses from Beijing. 

As domestic consumption remains soft despite recent stimulus and rumored handouts, Chinese leaders are determined to boost the country’s advanced manufacturing prowess (EVs, batteries, and solar components in particular) with a whole-of-society approach that could push added “overcapacity” into foreign markets. Additional duties on Chinese exports and flat demand for Canadian goods are possible scenarios for 2025.     

Given the greater capacity required to navigate the relationship with Canada’s most important trading partner, Ottawa, regardless of which party will be in charge, is widely expected to be left with squeezed resources to handle other international priorities. Canada’s China strategy and Indo-Pacific Strategy may see a period of adjustment and potentially take a back seat especially if a more domestically focused federal government is elected. 

Keen to improve the “external environment” to support its economy and to soften the blow of additional American tariffs, China may demonstrate more openness to concede on economic issues and to improve relations with Canada. 

While challenges and uncertainties will likely endure, 2025 may also present opportunities to improve Canada-China relations. For better or worse, China and its multifaced impacts on Canada can’t be simply wished away. A thoughtful rethink of a long-term China strategy will serve Canada well for the years to come.

link

Leave a Reply

Your email address will not be published. Required fields are marked *