America First Policy Institute’s Northern Trojan Horse report warns that deeper ties could allow Beijing to bypass US restrictions through Canada and gain leverage over vital supplies, including critical minerals.
Donald Trump left his September summit with Xi Jinping with a longer trade truce and pledges of further talks. From Ottawa, London and New Delhi, leaders could see a troubling contradiction in American policy: Washington was improving relations with Beijing while making ties with its own partners harder to sustain.
There were practical gains: proposals for better tariff treatment covering US$30 billion of goods in each direction, talks on artificial intelligence and reported progress against chemicals used to make illicit drugs. Yet disputes over Taiwan and technology remained, along with doubts about whether Beijing would honour its commitments.
But the Canada/US Trade war was on full display days later, as the US began barring specified Canadian alcoholic beverages, dairy products and motorcycles. Announced on September 8 and implemented on September 29, the prohibitions followed 50 per cent tariffs on selected Canadian goods and Ottawa’s retaliation. Targeting roughly $1 billion worth of Canadian goods (with some estimates up to $19.9 billion depending on definitions), representing a tiny fraction of the $872+ billion in annual bilateral trade. The announced product ban is on alcohol, motorcycles and mopeds and some dairy products.
The President says Canada treats American trade unfairly. There have been some nasty words uttered towards our country, the wider effect deserves scrutiny. President Trump needs partners willing to resist Beijing’s use of trade as a political weapon, yet his own measures give those countries reason to fear that he is just emulating the same China economic coercion strategy.
Canada showed where this can lead. As many were still packing our presents and heading to the gym On January 16, Prime Minister Mark Carney announced a strategic partnership with China covering energy, agriculture and trade. It included an initial quota of 49,000 Chinese electric vehicles at a 6.1 per cent tariff, alongside better access for Canadian farm exports.
In a recently released report The America First Policy Institute’s Northern Trojan Horse report warns that deeper ties could allow Beijing to bypass US restrictions through Canada and gain leverage over vital supplies, including critical minerals. It calls for North American trade and investment safeguards to be aligned more closely, including protections against forced labour which is required under the USMCA agreement.
US Trade Representative Jamieson Greer has also warned against Chinese investment and EV’s reaching the American market through Canada. Their concern is whether the two countries can protect shared supply chains when their China transhipment polices effect jobs here. Many Canadian experts on China including Charles Brurton have warned in parliament of the consequences of allowing what some call “spy machines on wheels” into Canada which also have been proved to contain parts made with forced labour from East Turkestan
But with all of that aside Canada has every right to seek new markets, but Carney must explain how his partnership will protect the continent on which Canada’s prosperity depends. Selling more canola does not answer questions about who controls sensitive technology or vital supplies. Anger at Trump does not remove the need for Ottawa to address those risks.
Yet Trump’s methods are weakening the support his officials seek. His government’s Pax Silica initiative recognises the need to work with trusted partners across critical minerals, semiconductors and artificial intelligence. These projects require years of planning and investment. Governments and businesses need confidence that agreements will survive the next political dispute and they can trust the US past this President.
But as that trust erodes, Beijing gains an opening without resolving the concerns that drove governments away. Reuters described Keir Starmer’s January visit to China as a hedge against Trump’s unpredictable conduct. Carney called the developing relationship with China more predictable. Leaders seeking to reduce their exposure to Washington are giving Beijing new opportunities to expand its influence and Canada has been deeply engaged with China for decades so going to them now seems like an off ramp that he wishes to exploit.
India approaches the problem with its own history and priorities. Its thaw with China began in late 2024, before Trump’s return, although American tariff pressure adds another reason to manage differences with Beijing. At their September 12 meeting, Narendra Modi and Xi backed stronger business and transport links as relations continued to recover from their bitter border confrontation.
With border disputes and concerns about China unresolved, India will defend its freedom to make its own choices. Washington should understand the political costs of treating it chiefly as a target for trade concessions. An Indian government facing American pressure must explain to voters why it should limit dealings with Beijing while Trump pursues deals of his own.¹²˒¹³
The Iran war adds a military cost. The Center for Strategic and International Studies has warned that depleted stocks of missile interceptors create risks for US readiness in a potential war with China. A prolonged Middle East conflict draws on weapons also needed to deter aggression in Asia. Promises to defend partners lose force when the means to fulfil them are strained. Semafor has reported that the war gives Governments seeking to rebuild and protect their economies have more reason to keep their options open.
Across these regions, governments are reducing their exposure to American decisions while preserving important ties with Washington. Beijing benefits whenever those choices deepen reliance on its markets or capital. Commercial relationships built to manage today’s uncertainty can eventually limit what governments are willing to do when China applies pressure tomorrow.
Trump has reasons to confront China’s trade practices, while Canada and other partners face questions about forced labour and the protection of sensitive industries. The rights of Uyghurs and the security of democratic societies remain part of that calculation. But Washington must also offer terms that make cooperation worthwhile for partners asked to bear the costs.
The paradox is that pressure intended to strengthen the coalition confronting Beijing can instead encourage its members to diversify away from Washington and that according to sources has begun in earnest. China does not need to become a more trustworthy partner to benefit. It needs only to appear, in particular areas, less risky than dependence on an increasingly unpredictable United States.
Ottawa’s China policy therefore raises legitimate questions about continental security, just as Washington’s approach raises questions about the durability of American partnership. Trump’s long term success depends on the trust of allies and partners; Carney’s turn towards Beijing adds another complication. Unless both governments manage those competing interests carefully, arrangements created in response to today’s uncertainty will become much harder to unwind tomorrow.
But has the Trump administration continues to role our policies intended to upend global trade and supply chains in order to check China and Make America Great Again, we are seeing the cost of those strategies playing out in real time.
* Dean Baxendale is a columnist, author and CEO of Optimum Publishing International and CEO of China Democracy Fund.
