A widely known caution advises people not to put all their eggs in one basket.
An exemplar is Canada. Has Canada put too many of its eggs in its basket of trade with the United States?
Of course, Canada’s trade is not completely reliant on the United States, but it has cast its lot so much into the American camp that it has cut off or damaged opportunities to diversify its trade. As the junior partner, population-wise, in the trade partnership, Canada’s sovereignty and national dignity are being impugned in full view of Canadians and the rest of the world. US president Donald Trump, on the other hand comes off as a bully and a buffoon to the rest of the world, as well as critically thinking Americans.
Trump demeans Canada’s current prime minister (which isn’t hard to do), and by extension Canadians, by referring to Justin Trudeau as a governor of the 51st US state. He says he is going to impose a 25% tariff starting on 1 February because he claims that Canada is an unfair trader.
The accusation is absurd. Is the US forced to buy from Canada? Should Canada be required to buy items that it doesn’t need or want?
Trump says that the US doesn’t need Canada’s oil, lumber, etc. If so, then that is fine. Then just don’t buy. But by imposing tariffs, it comes across as an admission that US producers can’t compete on price and quality. Is America being made great again by not competing in an open market? If Canada is unfairly subsidizing or skirting the stipulations of the United States-Mexico-Canada Trade Agreement (USMCA, a “free” trade agreement proposed by Trump and reached during his first term as president that eliminated most tariffs) or the World Trade Organization (WTO) then grieve the purported unfair trade practices according to the agreed-to mechanism in the trade agreements.
Canadian Relations with China
Outside of trade disputes, just how sovereign is Canada. Justin’s father, former Canadian prime minister Pierre Trudeau, likened the Canada-America relationship as a mouse sleeping next to an elephant. Pierre, however, had an independent streak. He went to establish relations with the People’s Republic of China in 1970 — before Richard Nixon in 1979.
Justin, though, has been reticent to stray from the American line.
Consequently, during the first Trump administration when Canada was asked/demanded to turn over Meng Wanzhou, the CFO of Huawei. Canada complied and held her under house arrest until the US agreed to drop the extradition request, with no charges forthcoming.
Canada even declined to engage with the world’s leading 5G provider Huawei, again at the behest of the US.
Even diplomatic niceties went by the wayside. Justin found himself confronted by People’s Republic of China chairman Xi Jinping about his divulging privileged discussion between the two of them. Trudeau didn’t have the decency at that time or afterwards to publicly apologize.
When the US pushed the narrative of a Chinese genocide being perpetrated by Han Chinese against Uyghurs in Xinjiang province, Canada joined in. The accusations were patently false and without evidence, rejected by the world’s Muslim-majority countries. Canada’s hypocrisy was revealed when Israel amplified its own genocide against Palestinians (as pointed to by the case brought to the World Court and the International Criminal Court). Canada continued to tout Israel’s right defend itself; i.e., in essence, supporting the right for an occupier to oppress and murderously deal with any resistance to occupation and oppression.
China is many thousands of kilometers across the Pacific Ocean from Canada. Yet, Canadian warships are engaged in provocative actions – what Canadian media calls “a high stakes global chess game” — in the Taiwan Strait.
After the US imposed 100 percent tariffs on Chinese electric vehicles, Canada followed suit with the same tariffs.
Trade Diversification
Image: Javier Milei (Licensed under CC BY-NC 4.0)
Fortunately, Chinese is not so pathetic as to hold a grudge. Besides, holding a grudge would be antithetical to developing good trading relations. Witness Argentina under Javier Milei leaving BRICS, and Milei’s undiplomatic remarks about communism. Nonetheless, China says it is ready to work with China despite Milei criticism such as likening China to an “assassin.” Eventually, Milei realized the economic necessity of deeper ties with China and Xi Jinping met with Milei. Milei’s about-face was described as “pragmatic collaboration.”
Will Canada realize the same need for pragmatic collaboration? The door is open as “China says it is ready to work with Canada despite Trudeau criticism.”
Although China is reducing its dependence on fossil fuels, China still desires energy, certain minerals, and other commodities that Canada can supply. Canada might best orient its economy to be accepting of opportunities that China (and other countries) might offer. It would be a seismic shift in orientation, but Canada might be best served by joining BRICS and considering what the Belt and Road Initiative has to offer.
While Trump browbeats and disparages its trading partners to gain the US an upper hand in trade relations, China professes that it is about win-win relations. Such win-win relations are logical and conducive to continued business and greater profit to all sides. Win-win is more likely to preserve continued trade relations and build a good reputation for prospective trade relations elsewhere, whereas taking advantage of a trade partner might well endanger continued trade relations and not promote a positive image among other potential trade partners.
Moreover, Chairman Xi will not demean Trudeau, or his successor, as a governor of China’s 24th province (China has 23 provinces sheng — which includes, of course, the island province of Taiwan — and the governor is a shengzhang. There are also five autonomous regions, 4 municipalities, and two special administrative regions). Chinese are skilled diplomats.
China is assuredly interested in trade with Canada. China may well be a partner for Canadian commodities (which Trump ridicules): oil, gas, lumber, minerals, wheat, other agricultural products, Canadian technology, an end to Chinese tariffs on Canadian canola oil (enacted in response to Canadian tariffs on Chinese EVs), etc. China might even set up automobile plants to produce EVs for the Canadian market, preserving Canadian automobile jobs, and contributing to lower greenhouse gas emissions.
The Chinese economy is ascendant while the US is getting bogged down by exploding debt. Much of the US economic fortunes are dependent on the dollar as a fiat currency. Yet, the pace of dedollarization is increasing. Many European economies are sputtering. Asia and the Global South are rising. Canada has a choice.
Tit-for-tat is a common response to the erection of tariffs, but it harms consumers in all countries. Trade diversification is a superior strategy, and it is something that Canada trumpets and needs to act on. Much of the rest of the world is poised to diversify its trade away from US tariffs against them.
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Kim Petersen is an independent writer. He can be emailed at: kimohp at gmail.com. He is a regular contributor to Global Research.
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