Prime Minister Mark Carney inspects an honour guard during an official welcoming at the Great Hall of the People in Beijing on Thursday.Sean Kilpatrick/The Canadian Press
Canada had a China strategy, and it was aligned with that of our main ally and partner.
Then U.S. President Donald Trump arrived and blew up everything.
That’s the background to Prime Minister Mark Carney’s visit to Beijing.
Like Canadians cutting back on trips to the United States, Mr. Carney is making alternative travel plans because of an abrupt change in the weather in Canada’s preferred destination.
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A winter sojourn in Beijing has been forced on Canada because our favourite all-season resort down south has undergone an abrupt change in management.
Mr. Trump has spent the past year telling his best customer that he regards us with something between indifference and hostility. He keeps saying that doesn’t want our cars, he doesn’t want our steel, he doesn’t need a free-trade agreement with us and he’d like us as the 51st state.
He’s taken in the welcome mat and wants us to be the doormat. Other American allies have received similar rhetoric, and higher tariffs.
All of which is destroying the possibility of a common front against the Chinese dumping machine.
Beijing’s economic aim is similar to MAGA’s – but its strategy has been far more thoughtful and patient.
Its goal is making China the world’s pre-eminent manufacturing power, through an industrial policy of subsidies, trade barriers and currency suppression. It is dumping what are effectively subsidized goods on every other country, which eliminates producers elsewhere. Once an assembly plant in Europe, or Canada, or Michigan is put out of business by a Chinese competitor, it’s gone forever.
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The strategy takes advantage of free-market rules in the rest of world to deindustrialize the rest of the world. Economists have described it as the China Shock. Other formerly closed economies entered the global free trading system without ill effects, but China’s impact has been different – because it set out to be different.
Last year, China ran a US$1.2-trillion trade surplus. If Beijing has its way, this year’s figure will be higher, with meagre imports tilting even more to raw materials, and even more exports of manufactured goods.
China is now the dominant maker of almost everything, except for a shrinking list of high tech and specialized goods. To take one example, a quarter-century ago, Canada produced more cars than China. In 2024, China made more motor vehicles than the U.S., Japan, Germany, South Korea and Canada – combined.
One possible response to the Chinese strategy is let it happen. And that has mostly been the response until now. If the Chinese want to export below-cost goods, putting our factories out of business in the process, why not let them? Artificially suppressed Chinese prices are, at least in the short term, subsidizing Western living standards.
But in the long run, we’ll end up with Beijing’s autocratic regime dominating the world, militarily and economically, through a stranglehold on manufacturing.
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In response, the free-market democracies had begun to band together to push back – building walls against Chinese industrial strategy and trying to put some limits on the abuse of free trade. That’s why Canada brought in a 100-per-cent tariff on Chinese electric vehicles, matching a similar U.S. tariff. The European Union also imposed tariffs of up to 35 per cent on Chinese EVs in 2024.
The U.S. is the logical leader of this movement, and not just in cars. Canada, Australia, the EU, Britain, Japan, South Korea and others are all concerned about China’s impact on their industries, and the implications for their long-term security.
Mr. Carney’s trip to China has to be understood in this context. What had been a solidifying common front against Beijing has turned into something close to the opposite.
The reason for the turn is that Mr. Trump is far more interested in attacking erstwhile allies than in making common cause. He’s destroying the military and economic alliance system and making the common front strategy untenable.
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He appears to not grasp that U.S. manufacturers are more viable and competitive with China if they have larger markets for sales and production, which can only come through mutually beneficial co-operation with countries that are not China.
The auto industry, with cars jointly made and sold on both sides of the Canada-U.S. border, is a classic example. Ditto for steel, aluminum, wood products, aircraft – the list is long.
But Mr. Trump, by pursuing a predatory divide-and-conquer strategy against alleged allies, is empowering Beijing’s own moves to divide and conquer those same countries.
That leaves Canada out in the cold.
Hence Mr. Carney’s winter trip to frigid Beijing, in a bid to thaw relations with a country that, in a warmer North American climate, we’d be distancing ourselves from.