Good morning. After years of frosty relations, Ottawa is testing whether a Beijing reset is worth the domestic and diplomatic fallout – more on that below, along with ICE clashes in Minnesota and the shrinking public service. But first:
Today’s headlines
- Iran hints at fast trials and executions of protesters as the death toll exceeds 2,500
- As Venezuela begins releasing prisoners, a Manitoba man held there since 2013 seeks Ottawa’s help
- An Ontario court seeks the arrest of a man in a $10-million music-industry heist case
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Chinese President Xi Jinping and Prime Minister Mark Carney will meet in Beijing this week.Adrian Wyld/The Canadian Press
Trade
The China compromise
Mark Carney’s arrival in China this morning is, to put it mildly, a very big deal. It’s the first trip to the country by a Canadian prime minister in more than eight years. It’s a pirouette away from Carney’s election campaign rhetoric, when he described China as our “biggest geopolitical risk.” It’s an attempt to improve relations ruptured by an arrest in B.C. (Huawei executive Meng Wanzhou) and retaliatory detentions by Beijing (the two Michaels) and findings of foreign interference (Justice Marie-Josée Hogue’s report).
So it’s fitting that Carney brings along with him a very big entourage. Three cabinet members travelled to the White House in October, but five have made the journey to Beijing – Carney’s largest ministerial delegation on a foreign trip so far. Saskatchewan Premier Scott Moe will also swing by for part of the meetings, raising expectations of a compromise on canola or other Canadian agricultural exports.
Dropped tariffs may be Carney’s short-term goal in China, but it’s not the only item on his to-do list. Let’s take a look at the Prime Minister’s ambitions for this official visit and what he might have to give up in exchange.
What Carney wants: A breakthrough in Beijing’s trade war
What it could cost: A backlash in Ontario
In 2024, in tandem with the Biden administration, Canada slapped 100-per-cent tariffs on Chinese electric vehicles to counter what it called an unfairly subsidized and overproduced industry. Beijing responded with punishing tariffs of its own on Canadian peas, pork, seafood and, especially, canola seed and oil. Prices plunged after China announced the canola levies, wiping $1-billion in value for the sector off the books.
China’s ambassador has made it clear that the agricultural tariffs will vanish if Canada scraps the EV tax. Carney could also choose to pare down the tax to match the European Union’s or Mexico’s, where the maximum tariff for Chinese automakers hovers around 50 per cent.
But Ontario Premier Doug Ford – whose province is home to much of the country’s auto industry – is having none of that. Yesterday, he said he was “absolutely 100 per cent dead against” lifting the levies. Ford has suggested that Ottawa should instead invite Chinese carmakers to build factories in Ontario and hire unionized Canadian workers to make their EVs.
Chinese tariffs have hurt canola farmers in Saskatchewan.Heywood Yu/The Globe and Mail
What Carney wants: Investment from China in Canadian companies
What it could cost: An aggrieved Donald Trump
As the U.S. President’s protectionist policies continue to hammer Canada, Carney badly needs to attract new capital. Under Justin Trudeau, Ottawa blocked a slew of Chinese investments that targeted sensitive sectors – but this Prime Minister has opened the door to partnerships in energy, natural resources, agriculture and advanced technologies. (Critical minerals, AI and defence companies remain off the table.) More guidance for China should come from this visit.
Trump, however, may not be so keen on any Sino-Canadian coziness. He doesn’t seem to like it when his trading partners go searching for new markets, especially if they find them in China. Carney can’t afford to jeopardize the United States-Mexico-Canada Agreement, which allows the vast majority of our products to still cross the border tariff-free – and which is up for review this year. Or maybe Trump has already written off the USMCA? He said it was “irrelevant” on a Ford factory tour in Michigan just yesterday.
What Carney wants: A sustained relationship with China
What it could cost: A far softer position on Taiwan
As relations with China frayed, Canada emerged as a strong defender of the self-ruled island. Our warships have sailed through the Taiwan Strait on “freedom of navigation” operations, while our 2022 Indo-Pacific strategy called for Ottawa to engage with Taiwan on trade, technology and “democratic governance.”
That may not fly with China for much longer. It views Taiwan as a breakaway province, meddling in its politics and encircling it with military drills in the hopes of annexing the island. China dislikes when foreign politicians meet with Taiwanese officials, including the trips Canadian parliamentarians take twice a year. Two Liberal MPs were on one of those visits yesterday, set to sit down with Taiwan President William Lai. On the advice of Carney’s government, they cut their trip short and flew home.
The Shot
‘The only reason they’d come here is to harass people.’
Federal officers remove a woman from her car in Minneapolis yesterday.OCTAVIO JONES/AFP/Getty Images
Federal agents dropped tear gas on Minneapolis protesters yesterday, as the Trump administration escalated its immigration crackdown in Minnesota after the killing of Renee Nicole Macklin Good last week. Read the latest on the clashes here.
The Wrap
What else we’re following
At home: Statistics Canada aims to cut more than 850 jobs – including 12 per cent of its executives – as part of Ottawa’s plan to shrink the federal public service.
Abroad: Russian drones and missiles struck cities across Ukraine, killing four and knocking out heat and power for millions in the winter cold.
Bot: Despite its propensity to generate sexual deepfakes, Elon Musk’s AI tool Grok will be integrated into the Pentagon’s military networks.
Bench: Justice Sheilah Martin will retire from the Supreme Court of Canada in May, giving Mark Carney his first chance to name someone to the top court.
Sports: Blue Jays playoff star and all-around delight Ernie Clement will play for Team USA at March’s World Baseball Classic.
Rail: Construction on a high-speed line between Toronto and Quebec City will begin by 2032, according to the CEO of the Crown corporation behind it.
Editor’s note: A previous version of this article incorrectly referred to Prime Minister Mark Carney’s trip to China as a state visit — but it’s an official visit, as Carney is the head of government. State visits are attended by the Governor-General, Canada’s head of state.