WASHINGTON\u00a0\u2014\u00a0America\u2019s top trading partners are responding to President Trump\u2019s belligerent and unpredictable trade policies \u2014 including his announcement Saturday to impose tariffs on eight European allies for opposing U.S. designs on acquiring Greenland \u2014 by trying to take their business elsewhere.<\/p>\n
Canada broke with the United States on Friday, slashing its 100% import tax on Chinese electric vehicles in return for lower tariffs on Canadian farm products, particularly canola seeds.<\/p>\n
\u201cIt\u2019s a huge declaration of realignment in Canada\u2019s economic relations,\u201d said Edward Alden, who studies trade issues as senior fellow at the Council on Foreign Relations. \u201cThe economic threat from the United States is now perceived by Canadians as far bigger than the economic threat from China. So this is a big deal.\u201d<\/p>\n
Canada has repeatedly been the target of Trump\u2019s impulsive wrath. In October, for instance, he said he was imposing a 10% tariff on Canadian imports as a reprisal for Ontario\u2019s provincial government airing an advertisement that criticized the president\u2019s go-to diplomatic tariff tool. He didn\u2019t follow through on the increase, but tariffs on some key Canadian sectors including steel and aluminum remain. <\/p>\n
But Friday\u2019s deal with China is a potentially perilous one for Canada\u2019s prime minister, Mark Carney, who risks retribution from Trump on the eve of negotiations over the renewal of a North American trade pact that is crucial to Canadian businesses. <\/p>\n
Trade partners seek alternatives to the U.S.<\/p>\n
Canada is not alone in looking for alternatives to America\u2019s massive market as Trump slaps massive tariffs on imports in an attempt to strong-arm other countries into moving production to the United States.<\/p>\n
The European Union formally signed a trade pact Saturday with the South American alliance known as Mercosur, which includes the region\u2019s two biggest economies, Brazil and Argentina. The EU is also pursuing a trade deal with India.<\/p>\n
China, pounded by U.S. tariffs since Trump\u2019s first term, has diversified its exports away the world\u2019s biggest economy to markets such as Europe and Southeast Asia. It seems to be working. China\u2019s trade surplus with the rest of the world surged to a record $1.2 trillion in 2025, the Chinese government reported Wednesday, despite tumbling exports to the U.S.<\/p>\n
Since returning to the White House in January, Trump has overturned seven decades of U.S. policy toward ever-freer trade. He\u2019s imposed double-digit taxes on imports from almost every country on Earth as well as singling out specific industries, such as steel and autos, for levies of their own.<\/p>\n
Trump says the tariffs \u2014 typically paid by U.S. importers and often passed on to American consumers \u2014 will raise money for the U.S. Treasury, protect American industries and bring investment into the United States. On Thursday, Taiwan agreed to invest $250 billion in the United States in return for Trump reducing the tariff on its products to 15% from 20%.<\/p>\n
The president\u2019s use of import taxes has often been arbitrary and unpredictable.<\/p>\n
He targeted Brazil, for instance, for prosecuting his friend, former Brazilian President Jair Bolsonaro, who was convicted for inspiring a Jan. 6-like insurrection in his country. On Saturday, Trump announced 10% tariffs on eight European countries that don\u2019t support his efforts to wrest control of Greenland from Denmark. <\/p>\n
Canada\u2019s complicated relationship with China<\/p>\n
Friday\u2019s deal in Beijing marks a turnabout in Canadian policy.<\/p>\n
In 2024, Canada had followed the U.S. by imposing 100% tariffs on EVs from China, reflecting fears that inexpensive Chinese cars would overwhelm domestic North American automakers.<\/p>\n
But the deal with China delivers benefits to Canada.<\/p>\n
First, its canola farmers need export markets, and this pact lowers China\u2019s tariff on canola from 84% to 15%. Canola farmers are hailing Canada\u2019s new trade deal with China as great news that could restore exports for the major crop.<\/p>\n
Second, the Trump administration, favoring fossil fuels over green energy, \u201cis actively hostile to EV production in North America,\u2019\u2019 said economist Mary Lovely, senior fellow at the Peterson Institute for International Economics. America\u2019s opposition \u201cthreatens to make the North American [auto] industry obsolete in the future, as China moves ahead with rapid quality improvements in batteries and electronics for EVs.\u2019\u2019<\/p>\n
Discussing his country\u2019s deal with Beijing on Friday, Carney said, \u201cChina\u2019s strengths in [the] electric vehicle sector are undeniable. China produces some of the most affordable and … energy-efficient vehicles in the world. And in order for Canada to build our own competitive EV sector, we need to learn from innovative partners, access their supply chains, and increase local demand.\u2019\u2019<\/p>\n
But Carney\u2019s economic rapprochement with Beijing amounts to a gamble.<\/p>\n
\u201cThis was an extraordinarily difficult thing for Carney to do,\u2019\u2019 Alden said. \u201cRelations between Canada and China have been extremely fraught.\u2019\u2019<\/p>\n
In 2018, China detained two Canadians in retaliation for Canada arresting an executive of the Chinese tech firm Huawei at the request of the United States. All three were released in a 2021 swap. Canada also launched an investigation three years ago into whether the Chinese interfered in Canadian elections in 2019 and 2021.<\/p>\n
The deal has also drawn criticism already for exposing Canadian autoworkers to competition with low-price Chinese EVs. Ontario Premier Doug Ford, leading the province that is the center of Canadian auto production, denounced the deal.<\/p>\n
\u201cMake no mistake: China now has a foothold in the Canadian market and will use it to their full advantage at the expense of Canadian workers,\u201d Ford posted on social media. \u201cWorse, by lowering tariffs on Chinese electric vehicles this lopsided deal risks closing the door on Canadian automakers to the American market, our largest export destination.\u201d<\/p>\n
In response to the criticism, Carney noted that the deal is limited. China can export only 49,000 EVs to Canada at the reduced 6.1% tariff rate, rising to about 70,000 in five years.<\/p>\n
Risks to a big North American trade pact<\/p>\n
But the biggest risk to Canada comes from its prickly southern neighbor.<\/p>\n
The U.S.-Mexico-Canada Agreement (USMCA) \u2014 a regional trade pact Trump signed in his first term that allows many goods to cross North American borders duty-free \u2014 comes up for renewal this year. Trump is almost sure to demand changes meant to shift manufacturing to the United States \u2014 and might threaten to pull out of the deal altogether, especially if he is inclined to punish Carney for reversing his policy with China. <\/p>\n
That\u2019s a scary thought for Canada, which sends 75% of its exported goods to the United States.<\/p>\n
The Canada-China deal Friday \u201cwill make the talks more complicated. Trump will not be pleased with the Canadian action, will probably take some retaliatory measure, probably against the Canadian auto industry, and will certainly make it an issue in the USMCA talks,\u2019\u2019 said William Reinsch, a former U.S. trade official now with the Center for Strategic and International Studies.<\/p>\n
On Friday, anyway, Trump commended Carney: \u201cIf you can get a deal with China, you should do that.\u2033 And Carney noted Friday that the China deal is preliminary, potentially giving him flexibility to seek changes if necessary to head off a conflict with the U.S. <\/p>\n
He also might be counting on getting a little help from U.S. businesses. American automakers depend on a network of plants across the U.S., Canada and Mexico and \u201cwill fight tooth and nail\u2019\u2019 to defend USMCA. American farmers also rely on the pact for access to the Mexican and Canadian markets. And U.S. tech companies like the way USMCA liberalized digital trade in North America.<\/p>\n
For now, Lovely said, Carney\u2019s deal with China sends \u201ca big signal that Canada is looking to other partners and has options that would allow it to walk away from the USMCA before it makes humiliating compromises to serve only American interests.\u2019\u2019<\/p>\n
Wiseman writes for the Associated Press. AP writers Ken Moritsugu in Beijing, Rob Gillies in Toronto and Chan Ho-him in Hong Kong contributed to this report. <\/p>\n","protected":false},"excerpt":{"rendered":"WASHINGTON\u00a0\u2014\u00a0America\u2019s top trading partners are responding to President Trump\u2019s belligerent and unpredictable trade policies \u2014 including his announcement…\n","protected":false},"author":2,"featured_media":138234,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[7625,14325,70128,12672,70131,3573,7363,14015,2424,48,52,51,47,50,49,70130,70129,13967,1519,2281,435],"class_list":["post-138233","post","type-post","status-publish","format-standard","has-post-thumbnail","category-los-angeles","tag-america","tag-beijing","tag-big-deal","tag-canada","tag-canola-farmer","tag-china","tag-country","tag-export","tag-friday","tag-la","tag-la-headlines","tag-la-news","tag-los-angeles","tag-los-angeles-headlines","tag-los-angeles-news","tag-low-tariff","tag-mark-carney","tag-tariff","tag-trump","tag-u-s","tag-united-states"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/138233","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=138233"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/138233\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/138234"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=138233"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=138233"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=138233"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}