3 ways Canada and China can reset their relations in Trump's new trade world

Prime Minister Mark Carney is in South Africa for the G20 summit this weekend, a meeting that's tellingly being boycotted by the world’s largest economy. It's the latest in a series of moves by U.S. President Donald Trump indicating the world order is rapidly shifting.  

But as Canada starts to diversify its ties with other countries amidst an increasingly unpredictable and unreliable relationship with the U.S., its pivot toward China, in particular, will need to be strategic — the work must be done while balancing the risks and strengthening the country internally.

Carney has already started laying the groundwork, as seen in his meeting last month with Chinse President Xi Jinping on the sidelines of the Asia-Pacific Economic Cooperation summit in South Korea, calling it "long overdue" and a "turning point in the relationship."

However, being late to the table with China doesn’t necessarily mean all opportunity is lost. In fact, as Carney sets an ambitious goal to double Canada’s non-U.S. exports in the next decade, there are gains to be made.

Indeed, there is room for growth. While China is Canada’s second-largest trading partner after the U.S., with Canadian exports there estimated at $30 billion in 2024, it still only represents about five per cent of Canada’s total exports. Compare that with roughly 75 per cent of our exports heading south of the border.

Some analysts say a first step in diversifying and increasing trade with China is ending the trade war between the two countries. That would include Canada removing its 100 per cent tariff on Chinese electric vehicles — something the federal government is now reviewing. 

Currently, China has levied counter-tariffs on Canadian canola, seafood and pork. The Canada China Business Council (CCBC) estimates the impact to be in the billions.

For months, industry voices and experts have said this trade war made less sense as U.S.-Canada relations soured.

"If it was so easy for our canola farmers to pivot to other markets, we would have done it," said Greg Chin, associate professor of political science at York University in Toronto.

He says there are other opportunities to expand trade, especially for natural resources and agricultural products, including lumber, pork and beef. 

Strengthening ties isn't just limited to the trade in goods, but can be expanded in the research and development, manufacturing and service sectors. This is especially key as China has become a leading technology power.

For Canada to catch up, some argue it is better to work with China instead of trying to compete in vain.

"We have to look to our own interests," said Colin Robertson, former Canadian diplomat and vice-president and fellow at the Canadian Global Affairs Institute.