The European Union, CANZUK, and democratic allies in Asia remain wiser choices.
China has imposed 75.8% tariffs on Canadian canola:
“China’s Ministry of Commerce published the details of the plan on Tuesday, claiming the “dumping” of Canadian canola into the Chinese market is hurting its domestic canola oil market.”
China’s tariffs were imposed following an anti-dumping investigation that was initiated in retaliation for Canada’s imposition of 100% tariffs on Chinese electric vehicles.
China imports a significant amount of Canadian canola, and the timing of the tariffs indicates political motives – rather than economic rationale – are behind them.
Pivot to China?
Amid the tariff threat from the U.S. (which has so far been mitigated by CUSMA), some have argued for shifting more trade to China. But as we’ve seen today, trying to avoid tariffs by pivoting to China is a fool’s errand.
China’s leadership is far less constrained and politically accountable than the leadership of the United States. Though U.S. government intervention in the private sector is surging due to Trump’s mercantilist and ‘pay-to-play’ approach, China has operated in that way for a long time, and unlike the United States – where midterm elections could greatly weaken Trump’s control over the economy – China probably won’t be experiencing significant policy change anytime soon.
China also remains a geopolitical adversary of Canada and many of our allies, due in large part to its close ties with Russia (enabling Russia’s invasion of Ukraine), threats to Taiwan, crushing of democracy in Hong Kong, human rights violations against the Uyghurs, interference in Canada’s democratic system, and more.
To deepen dependence on China to escape dependence on the United States would make little sense, as many of the challenges we face from the Trump Administration (capriciousness, values-mismatches, ‘might-makes-right’ thinking, economic exploitation) would be just as bad, if not worse, with China.
Pivot to the EU, Canzuk, and democracies in Asia
Canada does need a trade pivot. As we reduce dependence on the United States, we need to pivot to interprovincial trade and find reliable trading partners that share our values. There are three groupings of countries that fit the bill.
First, the European Union. With similar values and significant latent economic potential, deeper trade ties with the EU are the first place Canada should start. This is already underway and has strong support from Canadians. It also fits with the needs of the EU, as they are glad to deepen ties with a resource-rich fellow democracy like Canada.
Second, CANZUK. Australia, New Zealand, and the United Kingdom all share deep historical ties and cultural similarities with Canada, as well as a common Head of State. Streamlining regulations, labour mobility, and trade between the four nations would be relatively easy in most respects, and deeper security and military-industrial ties would reduce our dependence on the U.S. in security matters as well.
Third, countries like Japan, South Korea, Taiwan, and India are all fellow democracies who are, to one degree or another, also interested in reducing dependence on the U.S. While Canada cannot replace U.S. trade flows in full, we can be a vital part of many Asian democracies’ trade diversification strategies.
In total, this provides Canada with a significant opportunity. We could become a free trade powerhouse, both internally and externally. We could be an example of the power of working with democratic nations and building mutually beneficial trade and security partnerships, rather than exploiting others.
But that is only possible if we are wise in our pivot and wise in choosing new trade partnerships. And that means a pivot to China should be out of the question.
Spencer Fernando
Photo – YouTube
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