Why did Donald Trump support Canada’s agreement with China?
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When Donald Trump was asked about the deal Prime Minister Mark Carney struck with China this week, he merely shrugged. The US President said that such an agreement makes simple sense.
“Okay, that’s fine, that’s what you should do. I mean, it’s a good thing to sign a trade deal. If you can make a deal with China, you should do that, right?” Trump said in the White House On Thursday.
Heading into Beijing for this week’s meeting, there was no question that a deal could be reached. The outlines of such an agreement have been publicly debated for more than a year.
The issue was whether Carney could get a deal that was politically palatable. On the one hand, he could not afford to anger the auto industry or Ontario Premier Doug Ford.
But with the renewal of the Canada-U.S.-Mexico Agreement (CUSMA) looming later this year, the Canadian delegation had to walk a fine path that would not upset the notoriously harsh American president.
“Our advice is to ‘do no harm’ to review and renew the USMCA,” said Goldie Haider, president and CEO of the Business Council of Canada, referring to CUSMA, also known as the US-Mexico-Canada Agreement.
“We can’t see us leaving North America and moving on to pastures new.”
Look Carney heralds deal with China:
The deal only allows To introduce 49,000 EVs to Canada (that’s about three percent of all vehicles sold in this country) and reduce Beijing’s tariffs on canola products but it doesn’t eliminate them.
Jim Thorn, chief market strategist at wealth management firm Wellington Altus, says it doesn’t cross any red lines for the US administration.
“Carney is testing where that red line is,” he told CBC News.
Many American media outlets presented the Carney deal as a move away from America; Canada was trying to diversify from an increasingly hostile neighbor.
But Thorne says this misses the broader point. He says the Canada-China agreement should be seen as a useful reference point rather than a provocation by Trump.
“I look at the Canada-China agreementThis serves as a litmus test for what Americans are looking at,” he said.
Donald Trump’s red lines have changed over time. But their concerns about China’s foothold in North America are something they have been repeatedly warned about for decades.
According to US Trade Representative Jamieson Greer the deal is “problematic for Canada”.
“There’s a reason why we don’t do itThere are a lot of Chinese cars in the United States. That’s because we have tariffs to protect American auto workers and Americans with those vehicles,” he told CNBC on Friday morning.
US Transportation Secretary Sean Duffy said he thinks Canada will revisit the deal and regret bringing Chinese cars into the market.
But no American officials appeared concerned that the agreement would damage Canada-US relations.
“I don’t expect this to disrupt U.S. supplies to Canada,” Greer said. “Those cars are going to Canada – they’re not coming here.”
Prime Minister Mark Carney, who on Friday announced a deal with China in a number of areas, including tariff-quota arrangements on canola and electric vehicles, raised questions over the terms of the deal, what it means for Canada — and the implications of moving closer to China.
Carl Shamotta, chief market strategist at financial services firm Corpe, says Carney and his team avoided issues that would be likely to trigger a reaction in the US.
“The Trump administration has already taken the US out of the electric vehicle race and has not identified agricultural products as a key strategic priority,” he said.
“It is possible that this agreement was approved through back channels with the administration, meaning that – apart from issuing some essentially hostile statements – US officials simply ignore this development.”
And the initial reaction would seem to confirm that analysis.
But it wasn’t long ago that Trump initially ignored an anti-tariff ad run by the Ontario government during the World Series.
“If I were Canadian, I’d have the same ad,” Trump said the morning after it aired.
But within two days, Trump said the ad had “fraudulently” reused an earlier ad that featured Ronald Reagan talking negatively about tariffs, and broke off all trade negotiations with Ottawa.
Haider says it will take time for Americans to absorb the news out of China and more time to see how the president really feels about the deal. But they also wonder whether the Americans are hoping to gain information critical to their trade deal.
“Let’s see what they do. The US President is going to China. Will he come back with something similar in cars? It wouldn’t surprise me one bit,” Haider said.
