In his first trip to Asia as prime minister, Mark Carney will face more pressure to expand trade in the region as U.S President Donald Trump declared Thursday night that he was terminating trade negotiations with Canada. Trump’s announcement torpedoes the possibility that the White House was open to reducing some sectoral tariffs. Trump ramped up pressure in a post on Truth Social less than 12 hours before Carney was scheduled to depart from Ottawa. “Based on their egregious behavior, ALL TRADE NEGOTIATIONS WITH CANADA ARE HERBY TERMINATED,” Trump wrote in his post. To justify the announcement, Trump referred to a statement from the Ronald Reagan Foundation which stated that it had learned that the “Government of Ontario, Canada, created an ad campaign using selective audio and video of President Ronald Reagan.” The foundation said that the ad misrepresents the Presidential Radio Address, and that the Ontario government did not receive permission to use and edit the remarks. On Friday, Carney will depart for Kuala Lumpur, Malaysia to attend the summit of the Association of Southeast Nations (ASEAN). The prime minister will then stop over in Singapore to meet with Prime Minister Lawrence Wong before participating in the Asia Pacific Economic Cooperation (APEC) conference in South Korea. The last leg of Carney’s nine-day visit could result in bilateral meetings with U.S. President Donald Trump and Chinese President Xi Jinping – Canada’s top two trading partners. Government officials say that they are “pursuing” a one-on-one meeting with Xi on the sidelines of APEC in Gyeongju. It is a notable “revitalization” of the diplomatic relationship between Canada and China after concerns of foreign interference dominated headlines during Justin Trudeau’s tenure. In November 2022, Xi was caught on camera during the G20, rebuking Trudeau about media leaks linked to Canada’s concerns about alleged Chinese espionage and interference. During a background briefing with reporters on Thursday, a senior government official referred to the incident as something that happened “quite a number of years ago,” and reiterated that Canada has a new prime minister. “This prime minister (Carney) wishes to pursue a strategic relationship with China,” said a senior official during a background briefing with reporters ahead of the trip. “The onus is on us to put in place the investment protection arrangements and screening arrangements to make sure that the economy is safe from any source globally,” the official said. The Canada China Business Council (CCBC) is applauding the warming of relations, given the trade tensions after Canada, in lock step with the U.S., imposed 100 per cent tariffs on Chinese-made electric vehicles (EVs). Canada also put 25 per cent tariffs on Chinese steel and aluminum. Beijing then levied tariffs of its own on Canadian agriculture, notably on canola products, with a 100 per cent tariff on Canadian canola oil and meal and a 75.8 per cent tariff on canola seed. The retaliation has crippled the industry in the western Prairie provinces. China is Canada’s biggest market for its canola products. In a recent interview on CTV’s Question Period, Chinese ambassador to Canada Wang Di said the country was willing to remove its tariffs on Canadian agriculture if Canada scraps its levies on Chinese EVs. Bijan Ahmadi, the executive director of CCBC, said a solution to the trade dispute will require multiple steps, but needs to start with a meeting between leaders. “It will take time. It needs to be step by step and sequenced properly, but hopefully this meeting can be another step in the path the two governments have started to recalibrate their bilateral relationship,” Ahmadi said. “Our huge overreliance on one single trading partner, the United States, is a risk to Canadian national economic interests.” Increasing trade in Asia is crucial to the getting through the trade war, says Goldy Hyder, president of the Business Council of Canada, who notes that many Asian countries are experiencing rapid growth driven by a youthful population and expanding middle class. In an interview with CTV News, Hyder noted that since being elected, Carney had been to Europe five times, emphasizing that “Canada needs to go where the puck is going.” “When it comes to chasing growth … and to address issues that are on the minds of Canadians – from affordability to health care to jobs in the economy – it’s going to be about deepening our relationships with Asia,” Hyder said. Although there is no bilateral scheduled with Trump at APEC for now, officials say that doesn’t necessarily mean they won’t meet. Earlier in the week before a cabinet meeting, reporters asked the prime minister if he was expecting any progress in negotiations on sectoral tariffs. Hyder, as well as a government source, told CTV News that an announcement on U.S. tariffs on steel and aluminum could happen at APEC. The industry, based primarily in Ontario and Quebec, faces punishing duties of 50 per cent. Carney did not deny the comments. “We’ll see. We’re in ongoing discussions with the Americans … I wouldn’t overplay it. I’m looking forward to seeing the (U.S.) president at APEC, in Korea,” Carney said. “We’ll be seeing lots of other countries. One of the core elements of our strategy is diversifying trade – that’s why we’re going to Asia."
