Canada won’t back down on trade pivot as energy minister heads to India
The two sides are expected to talk about cooperation and potential deals on critical minerals, uranium and liquefied natural gas
[OTTAWA] Canada won’t be derailed in its efforts to diversify trade away from the US despite the latest threats from the Trump administration, Canadian Foreign Minister Anita Anand said.
US President Donald Trump took a swipe at Prime Minister Mark Carney on social media on Saturday (Jan 24), saying he would place a 100 per cent tariff of all Canadian goods if Canada becomes a “drop off port” for Chinese exports to the US. That was a response to a recent agreement that will see Canada reduce tariffs on Chinese electric vehicles (EVs) in return for trade concessions on food, including canola and beef.
Canada is not negotiating a free trade deal with China, Anand reiterated on Sunday with the Canadian Broadcasting. But the country has no choice but to forge ahead with its strategy to double its non-US exports within 10 years, she suggested.
“We need to protect and empower the Canadian economy and trade diversification is fundamental to that,” Anand said. “That is why we went to China, that’s why we will be going to India and that is why we won’t put all our eggs in one basket.”
Energy Minister Tim Hodgson is heading to Goa, in western India, where he will attend an energy conference and hold meetings with officials in Indian industry and Prime Minister Narendra Modi’s government.
The two sides are expected to talk about cooperation and potential deals on critical minerals, uranium and liquefied natural gas. Canada has an abundance of those resources. Carney is also planning to visit India soon, and he will be making a trip to Australia in March.
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Anand emphasised, however, that Canada and the US still have a strong relationship and she expects that will continue.
It’s one of the world’s largest bilateral trade relationships, in fact. Despite ongoing tensions over tariffs, the US exported about US$280 billion of goods to Canada in the first 10 months of last year, more than to any other country, while importing US$322 billion from Canada, according to US Commerce Department data.
The countries’ automotive industries are particularly intertwined, which is one reason why Canada’s deal with China, though limited to just 49,000 Chinese EVs annually, struck a nerve in the US.
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“We have a highly integrated market with Canada,” US Treasury Secretary Scott Bessent said on Sunday. “The goods can cross across the border during the manufacturing process six times. And we can’t let Canada become an opening that the Chinese pour their cheap goods into the US.”
A fracture in the North American relationship contains vastly more economic risk for Canada, as a much smaller and less diversified economy.
“If there were 100 per cent tariffs on Canada it would be a disaster. I guess my question would be, what’s the likelihood of that happening?” said Randall Bartlett, deputy chief economist at Desjardins Group, a Canadian financial firm.
Trump has a habit of issuing tariff threats and then walking them back, “so the likelihood of that is very small”, Bartlett said.
The US president continued to post about Canada and China on Sunday afternoon, writing on Truth Social: “China is successfully and completely taking over the once Great Country of Canada. So sad to see it happen. I only hope they leave Ice Hockey alone!” BLOOMBERG
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