BEIJING — Canadian Prime Minister Mark Carney‘s decision to ease trade tensions with China is the latest sign that U.S. allies squeezed by Trump-era tariffs are recalibrating — and in some cases, drifting closer to Beijing.
Why it matters: President Trump‘s tariff-driven trade strategy is accelerating efforts by U.S. partners to hedge and diversify, creating openings for China as countries manage retaliatory trade fallout.
What they’re saying: Zongyuan Zoe Liu, a senior fellow for China studies at the Council on Foreign Relations, said, “On the one hand, this is not surprising at all.
- “And on the other hand, it just goes to show how fast and how committed our allies are to preserve their own interests, specifically with regard to their own economic security.”
- The Trump administration’s sweeping tariff policies have jeopardized U.S. allies’ economic security, Liu said, prompting them to diversify.
- “But I don’t think this is, in any way, showing that these other countries now view China as a better option than the United States,” she said. “That’s not necessarily the case because China also has its own way of weaponizing its economic dominance.”
The White House did not respond to Axios’ request for comment.
The latest: China and Canada struck a trade deal on electric vehicles, agriculture and energy, the prime minister’s office announced on Friday.
- “Canada’s new government is working with urgency and determination to diversify our trade partnerships and catalyze massive new levels of investment,” a statement said. “As the world’s second-largest economy, China presents enormous opportunities for Canada in this mission.”
- Canada dropped its 100% electric vehicle tariff on China and will allow up to 49,000 Chinese EVs into the Canadian market. China, in turn, will lower tariffs on Canadian canola seed.
Zoom out: During a December trip to China from French President Emmanuel Macron, Chinese President Xi Jinping said he wanted the two countries to work together “to make global economic governance fairer, more just and equitable.”
- “China wants to see what it calls ‘true multilateralism’ while ‘upholding the UN-centered international system,'” according to a dissection of the meeting from the Center for European Policy Analysis. “This is code for diminishing American power.”
- This month, South Korean President Lee Jae Myung made the country’s first visit to China since 2019. He told Xi that Seoul’s cooperation with the U.S. doesn’t mean South Korean and Chinese relations should move toward confrontation, per AP.
Context: These shifting dynamics are “exactly what China is hoping for,” Kyle Chan, a fellow at the Brookings Institution’s John L. Thornton China Center, said.
- Ahead of Trump’s tariffs, he said, there was a fear in Beijing that the U.S. would launch a global trade war against China.
- “This was certainly a major gift to a very worried Beijing up until now,” he said.
The intrigue: People worldwide expect China’s global influence to grow over the next decade, according to survey data released Thursday by the European Council on Foreign Relations. Meanwhile, few people said they expect the U.S. to gain in influence.
- Nearly half or more than half of respondents in South Africa, Brazil, Russia and Turkey said they expect their countries relations with China to become stronger in the next five years.
What we’re watching: British Prime Minister Keir Starmer and German Chancellor Friedrich Merz are set to visit China this month and next month, respectively, Bloomberg News reported.
- Trump’s “approach leaves leaders eager to engage Xi so they aren’t sidelined by US-China maneuvering,” Neil Thomas, a fellow for Chinese politics at the Asia Society Policy Institute’s Center for China Analysis, told Bloomberg.
- Chan told Axios, “The takeaway is basically, we are willing to work with China in some way. We’re not going to shut them out.”
By APRIL RUBIN/Axios