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Canada’s efforts to reduce economic reliance on the United States have just become more complicated. After enduring weeks of trade pressure from the Trump administration, Canadian exports are now subject to retaliatory tariffs from China. These new tariffs—on canola-related products, peas, pork, and seafood—are apparently a delayed response to the measures Canada imposed on Chinese electric vehicles, steel, and aluminum last fall. The timing and reasoning behind China’s decision could spell trouble for both countries.
Mixed Messages from Beijing
From a strategic standpoint, China’s move raises questions. Although tit-for-tat tactics are standard in global trade disputes, Beijing had made overtures suggesting it wanted to mend fences with Canada, particularly after the 2021 resolution of the two Michaels–Meng Wanzhou crisis. However, allegations of Chinese interference in Canadian politics have left any rapprochement politically unpalatable in Ottawa.
Still, China stood to benefit from Canadian calls to diversify away from the United States—especially as Canada grapples with unprecedented trade pressure from Washington. From an economic perspective, greater cooperation between China and Canada could have offered an alternative market for Canadian goods and a less US-centric framework for Canadian trade.
Yet by imposing these tariffs, China risks undermining the very trust it needs to strengthen its economic ties with Canada. Hitting food and agricultural products that benefit both economies only intensifies tensions, complicating any attempt to rebuild goodwill.
Potential Misstep or Calculated Strategy?
Why risk this outcome? One reason could be that China wants to signal its resolve to both Canada and the United States. Beijing may be showing Washington that it’s prepared to endure short-term losses in pursuit of a larger strategic position—possibly hinting that it supports a new “great power” dynamic in which each superpower holds sway in its respective sphere of influence.
Alternatively, Beijing may have simply mistimed its retaliatory response. Losing the chance to position itself as a viable diversification partner for Canada, just as Ottawa seeks new markets, could prove shortsighted. It grants the US more leverage, since many Canadians now question whether deeper economic reliance on China is wise or even politically viable.
Historical Precedents and Missed Opportunities
This isn’t the first time China may have misread the Canadian–US dynamic. In 2017, then-Prime Minister Justin Trudeau traveled to Beijing hoping to start free trade negotiations under Canada’s so-called “progressive trade policy agenda.” China balked, possibly attempting to extract concessions later on. But before any further talks could take place, the Trump administration’s National Security Strategy labeled China a threat, ushering in an era of tariffs and heightened economic confrontation.
Had Canada and China begun serious negotiations then, Canada might have helped mediate the spiraling US–China trade war. As the only country negotiating trade deals with both superpowers simultaneously, Canada was in a unique position to propose new conflict-resolution frameworks. Once the US–China dispute kicked off, though, and Canada agreed to the updated CUSMA agreement (with provisions discouraging free trade deals with “non-market economies”), hopes for a Canada–China pact largely evaporated.
Looking Ahead
The recent tariffs risk sending Canada and China into a downward spiral of retaliatory moves that will be difficult to reverse. If Canada and China truly wish to improve relations—whether as strategic partners, diversification opportunities, or simply a means of mutual economic benefit—they will need to break this cycle and work out fresh terms of engagement.
For Canada, deciding how much to lean on the US or pivot toward China remains a delicate balancing act—especially against a backdrop of domestic politics wary of both American unpredictability and perceived Chinese interference. For China, pushing Canada away at this moment may give the US a strategic edge and damage China’s own long-term interests in North America.
In the end, the biggest hope lies in recognizing this mutual miscalculation for what it is and seeking a more sustainable path forward. Without a concerted effort from both sides, China’s newest tariff salvo may have the unintended effect of fueling distrust in Ottawa and making the road to diversification—and any robust Canada–China partnership—even harder to navigate.
