Entrevista (Michael Kovrig, exdiplomático y analista geopolítico canadiense) No Nonsense Potcast, 01.09.2026 Pamela Wallin, senadora y periodista canadiense
September’s here, bringing another Trump-Xi encounter onto the agenda. The White House has confirmed China’s chairman will meet again with America’s president this month, with Xi Jinping expected to arrive in Washington Sep. 23 and depart Sep. 25. Between now and then, Xi has multiple foreign trips scheduled to build momentum. Prediction markets are wondering, “will Trump and Xi announce a trade deal, cut tariffs, make progress on artificial intelligence, or discuss semiconductor controls? Will they say something about Taiwan, or at least strike a conciliatory tone?” There are even rumours the CCP general secretary might stop in Ottawa afterward, presumably to deploy his Mona Lisa smile to drive the wedge between Canada and the US even deeper and present China as the more predictable power.
As we ponder such questions, it’s timely to drink the tea steeped from the leavings of their last encounter, in Beijing in May. The following is an edited transcript of my conversation on that topic with Canadian Senator and broadcast journalist Pamela Wallin on her “No Nonsense” podcast.
Why everyone is going to Beijing
Pamela Wallin (PW): Today we continue our look at what really happened at the Trump-Xi summit and what it means for Canada, which seems to be trying to do business with both sides — can we have our cake and eat it too? That’s one question I’ll put to Michael Kovrig. We want his take on what the summit was designed to accomplish, if anything. Was it a real reset, or just a way to steady things while other issues get sorted out? A lot of people see this as part of a broader parade of world leaders to Beijing — Trump, Mark Carney, European leaders, the Australians, and now Russia. What’s going on? Why now?
Michael Kovrig (MK): This is exactly what I’ve been researching lately: leader-level diplomacy. Since Trump’s inauguration for his second term last year, we’ve seen an extraordinary parade of leaders going to China — roughly a dozen American allies, NATO members and EU members in the past year alone, out of about 36 total. We haven’t seen numbers like that since the 2016 G20 summit, and we’ll see another G20 in China later this year. That wave — as China itself has called it — has now crested with the U.S. president visiting, followed shortly afterward by Vladimir Putin. Many leaders from developing countries have been going too. China’s protocol officers must be working their feet off; it’s almost a parade every week now, and it’s always full of symbolism.
PW: Who gets to go to which rare or historic Chinese building, how much time is spent there — all of it has to be read into these meetings.
MK: That’s right, and I think you’ve put your finger on the key distinction: symbolism over substance. There’s a strategic reason for that on China’s part, because the substance most countries want would require fundamental policy and behavioural change by Beijing. The visiting leaders want the PRC to stop doing things — to change its economic model and industrial policy, which is inflicting a massive “China shock” on industrialized economies, hollowing out industries, creating large-scale unemployment, and eroding their capacity to build military equipment and maintain an industrial base.
China is also engaged in extensive espionage, foreign interference, and efforts to extend its sphere of influence across the Western Pacific and East Asia, and it’s trying to become more influential in global governance by shaping the UN and other international bodies. These countries want to constrain that. What Xi Jinping is trying to do by inviting these leaders to Beijing — or accepting their requests for his officials to visit — is stall and mollify them with minor concessions. A little candy for the children coming trick-or-treating, so they can go home and tell voters they had a successful visit, without Beijing having to make any meaningful changes.
PW: That’s diplomacy by deception: they go through the list of things promised the last time Trump and Xi met, and with other countries too, and then simply don’t deliver. There’s no real change in the Chinese approach. This is still a pretty brutal regime, but it also needs to keep energy and resources flowing, deal with its faltering economy, and find markets.
MK: Exactly. U.S. Trade Representative Jamieson Greer said going into this summit that the United States has given up trying to get China to change its policies or make the Communist Party behave differently. Instead, Washington is focused on protecting itself — maintaining defence and deterrence, and preserving its own economic strength and capacity. You can debate whether the Trump administration’s policies are succeeding at that, but the shift itself is dramatic. For decades, the basic bet was that bringing China into the WTO and the liberal international order would gradually make it more open, democratic, and market-oriented — more like the West. Instead, China has been free-riding on that system and exploiting it in ways that have weakened the order itself, along with the United States and Western alliances. Now countries including Canada are having to erect protectionist trade barriers against Chinese overproduction and invest more heavily in their own industrial policies to compete with the billions of dollars in subsidies China puts behind its favoured industries. That’s a paradigm shift in how the world works.
China’s overcapacity and the EV risk
PW: You testified about this at a recent Commons committee. China produces so much of the world’s goods, needs markets for them, and doesn’t need much from us beyond things like oil and gas. But it also has a strategy for what it does to a market, and that should trouble us as we think about letting in more Chinese EVs. Walk me through your theory of “flooding the zone.”
MK: This isn’t just my personal assessment — it’s backed by extensive research from reputable organizations including Rhodium Group. I worked for that organization’s predecessor after finishing my master’s degree at Columbia University, and they’ve since done exceptionally detailed, meticulous research. Some of their recent reports focus on electric vehicles specifically, but more broadly they analyze China’s political economy and industrial system. Their conclusion: under Xi Jinping, China has redirected massive resources away from consumers and into more than a dozen strategic industries under its Made in China 2025 strategy — AI, EVs, batteries, biotech, pharmaceuticals, and others. That’s badly unbalancing China’s own economy and creating serious domestic problems, which forces it to export the excess capacity to keep the system going. But there’s also a strategic objective: to dominate the commanding heights of 21st-century technology and industry.
The problem for Canada, if you let Chinese EVs into the market, is that you’re forcing Canadian automakers to compete not just with foreign companies — you’re forcing them to compete against a Chinese state that has already shovelled more than C$300 billion in subsidies and other support into its EV sector alone. Canada’s economy is much smaller. Plug the two together directly and Canada gets pulled into the distortion. It’s like a spaceship flying next to a black hole: you get pulled into the gravity well, and China’s industrial system starts reshaping Canada’s own economy and industrial base. The risk is that Chinese EV makers enter in significant numbers, drive other automakers out of business, and eventually dominate the market. They come in cheap, seduce consumers with low prices, and once there’s dependency through dealer networks and parts supply, it becomes very hard to wind back the clock. We should learn from Huawei: it was cheaper than Ericsson, Nokia, or Nortel, so everyone said, “let’s bring in lots of Huawei.” Then it became far more expensive to realize it was a problem for economic dependency and national security — and to rip and replace its equipment.
PW: They also handed out a lot of free equipment to our intelligence and police services — which goes directly to the concern about these cars. They’re massive data-collecting spymobiles running around our streets, and that puts us at even greater risk. We have to keep saying clearly what we’re dealing with: the leadership of a country that has tried to undermine Canada’s democratic processes, kills its own citizens and others, distorts markets, and lies about its trade promises. This is not simply a great partner to be doing business with. And even if you don’t like Donald Trump, we can’t cut off our nose to spite our face here.
MK: Exactly. Canadians need to avoid getting locked into a false binary — either America is great and China is bad, or the reverse. Great powers operate differently from middle and small powers; they can abuse leverage and economic dependency. There are still fundamental differences between the Chinese Communist Party and the U.S. government, even under Trump — that’s a separate topic.
For Canadians, the safer play is diversification. That’s where I agree with the prime minister: we need to diversify our markets and partnerships so we’re not overly reliant on either the United States or China. And the reality is that China can’t substitute for the United States anyway — maybe on oil and some commodities, but not for most of the Canadian economy. China isn’t interested in buying what most Canadian manufacturing and services companies currently sell to the U.S. So we need other markets, particularly across the Indo-Pacific. Spreading trade and investment relationships more broadly reduces the risk of being too dependent on a great power that might abuse that dependence.
Canada between Washington and Beijing
PW: This is the recurring theme. Everyone understands Prime Minister Carney’s push to diversify — more trade with Europe, new markets, presenting Canada as an energy superpower. But we’re not yet able to get enough of that energy out of the ground or to market, so that’s a bit of a false promise right now. What’s harder to understand is how diversification became a willingness to downgrade the American relationship in favour of a “strategic partnership” with China. Those aren’t neutral words — they’re the words China wanted. Not a new trading partner or a renewed relationship, but a strategic partner. And we signed on to that, 100 percent.
MK: The big win for China in talking to Canada isn’t really economic — though of course the Chinese ambassador’s job is to open more avenues for investment and trade. The bigger prize is a narrative shift: getting a Western, G7 country to endorse China’s story of its own rise, that China is the reliable superpower while the United States is chaotic and in decline. Anything Beijing can get Mark Carney to say that supports that narrative, it will take. That’s what Canada needs to be careful about.
Geography may not be destiny, but the U.S. is still critically important for Canada. We have to manage the relationship as best we can and get as much out of it as possible, primarily by showing we’re an invaluable neighbour, ally, and partner through thick and thin. That doesn’t mean putting up with abuse or doing whatever Washington wants — it means demonstrating how indispensable we are to American security: supplying energy, critical minerals, advanced technology, and other support, while strengthening our own defence capacity to show we’re doing our part on North American security and NATO. The more Canada proves its indispensability, the less ground the Trump administration has to criticize it. That won’t make the relationship stop being difficult. But Canada still needs to restrict trade and investment with China to genuinely non-sensitive areas — not just cybersecurity or military technology, but anywhere dependence could become a vector for political influence or economic coercion.
Policing, finance and CCP influence
PW: A lot troubles people about the prime minister’s words and this agreement — including the understanding that there will be no public criticism of China, which means we may never know what was said behind closed doors. Two other issues stand out.
First, Canada signed a security agreement between the two countries’ police forces, and that deal remains secret despite pressure from civil society, academics, and the opposition. If Canadians’ privacy, security, and data may be at risk, we have a right to know what our government agreed to.
Second, there was a subsequent meeting — even attended by the Governor of the Bank of Canada — to discuss deeper financial ties. When you start talking about financial integration, digital IDs, and the like, it gets troubling. People are already uneasy about AI in general, and when they see their own government dealing with a questionable police organization and then moving into financial issues, it raises serious concerns. What’s your take on those two things?
MK: You’ve given me a lot to unpack — let me take it in three related channels.
The first is the RCMP’s renewed memorandum of understanding with China’s Ministry of Public Security. Unlike the other memoranda signed during Prime Minister Carney’s visit, this one hasn’t been disclosed, which immediately raises a red flag.
The Ministry of Public Security engages in abuse and repression inside China, but it has also used programs like Fox Hunt and Skynet to pursue Chinese citizens abroad — including in Canada — whom Beijing accuses of corruption. Some may genuinely have done wrong, but we can’t be sure, because China is so opaque. We can’t be sure they’d be treated in ways that respect their human rights, and we can’t be sure the campaign isn’t being used for political persecution against critics or enemies of the Communist Party — or as a form of transnational repression meant to intimidate members of the Chinese diaspora, including Canadian citizens and residents of Chinese origin — to instill the fear that the Party can reach them anywhere.
So any cooperation between the RCMP and the Ministry of Public Security needs real safeguards against abuse. China has used policing and internal-security relationships globally as vectors for influence — if you can get senior police or domestic-security officials aligned with your interests, that becomes a channel of political influence. I’m not suggesting that could happen quickly or directly in Canada, but it’s certainly something China has tried elsewhere.
PW: There are recent reports suggesting there are hundreds of China-friendly or China-linked organizations in Canada engaged in these activities. This isn’t conspiracy theory — some of it comes from CSIS and our own agencies. So I’m puzzled: knowing all this about how Beijing behaves, why would we enter into this kind of agreement at all, and then keep it secret?
MK: That gets to the second issue: the discussions when Minister Champagne went to China. That visit got far less attention than the prime minister’s but may have been more consequential. It essentially gave political top-cover to Canadian services companies — especially financial firms — with major interests in China: large insurance, banking, finance, manufacturing, and services companies with investments, joint ventures, or significant revenues tied to the country. I’m not saying those companies shouldn’t do business there; China is a large market. But the risk is that the Chinese Communist Party can use those business interests to create reciprocity traps. It doesn’t require bribery or direct elite capture — it simply aligns corporate interests with Beijing’s. Those companies then have reason not to rock the boat, and may lobby Ottawa against measures China opposes. That makes the government less willing to criticize Beijing on Taiwan, human rights, coercion, foreign interference, or transnational repression, because companies fear retaliation. You get a chill and a self-censorship that Canada would never accept from Russia, Iran, or North Korea — even though China enables all three.
PW: We say all sorts of things about other leaders, but when it comes to China, there’s silence.
MK: Exactly. China has made that very clear. Xi Jinping apparently told Prime Minister Carney directly that if Canada has a problem with China, it should raise it with him privately rather than criticize him publicly. Most of us would prefer criticism handled that way — the problem is what happens when you raise it repeatedly and nothing changes? Take China’s support for Putin’s invasion of Ukraine: Putin is visiting his good friend Xi this week, even after leaders and senior officials from France, Spain, Germany, and elsewhere have pressed Xi to curtail China’s support for Russia — especially sales of the dual-use goods fuelling Russia’s war machine. Xi has made abundantly clear he has no intention of changing course.
PW: Right.
MK: Once he says no, what are you supposed to do if you also can’t speak out publicly? What leverage do you have left? You can impose sanctions and costs on China for bad behaviour, but what keeps many European countries and others from doing that is fear of reprisal from Beijing.
PW: And now we’re putting ourselves in that same position.
MK: Exactly. Which brings us back to the Trump-Xi meeting. In the past, countries like Canada and many European states would have been more willing to stand up to bad behaviour by the Chinese Communist Party. Now everyone’s stepping back because they’re unsure where Trump will position the United States. It’s like a peloton in the Tour de France: the U.S. used to lead it, and others were willing to take some heat from China because they knew Washington had their backs — they could tuck in behind and let it take the windburn. That’s gone now. Countries are afraid Trump will leave them exposed to the full brunt of China’s ire. Japan is a classic example.
PW: Yes, exactly.
MK: Last fall, Japan’s Prime Minister Takaichi Sanae said in parliament that a Chinese attack on Taiwan would pose an existential threat to Japan and could invoke its right to self-defence — anyone looking at a map can see why. China responded with fury, piling economic, cultural, and diplomatic coercion onto Japan to punish it and force Takaichi to retract the statement. Has any G7 country or major Japanese ally spoken out? Has any leader in this parade of visits to Beijing called on China to stop bullying Japan? Nobody publicly.
PW: This is a question about the long game, and you know it intimately. China plays the long game — it doesn’t have to worry about midterms or next year’s election, because it doesn’t go through any of that complicated democratic stuff. Its message is: we are the rising power, America is the fading power, and because we play the long game, we can wait you out. Look at all these supplicants coming to our door — we’re on the rise, you’re on the wane. That’s worked on a lot of people. But then China runs up against Donald Trump, who is completely transactional and says things like, okay, I’ll put Taiwan on the table, what do I get for it? That leaves Beijing stunned, because the position is so obvious, so transparent, so short-term. How did that affect the summit? I hate talking in “winners and losers,” but is the balance shifting?
MK: It was a fairly boring summit — and given the risks in play right now, boring is good. Now that we’ve had a little time for the tea leaves to steep, we can see what came out of it. There were two days of immaculate vibes: a major Chinese rhetorical win, a more disciplined Trump in the room than many analysts feared, and then a Fox News interview afterward that gave Beijing exactly the post-summit messaging it wanted on Taiwan. The atmospherics were everything Beijing planned: a 21-gun salute, the Temple of Heaven, state banquets, Xi taking Trump inside Zhongnanhai.
Trump flattered Xi far more than Xi flattered Trump — though that doesn’t really register with Xi. What matters to him is the fact of the U.S. president coming to visit. Even the official U.S. visuals from Zhongnanhai had Xi dominating the frame, with Trump slightly out of focus in the background.
So, the optics favoured China. But — and I’ve made this point on Substack and in Foreign Affairs — when you go to China, you’re on their stage. They manage the choreography and try to write the script, and get you to endorse it. Some have said a leader can’t go to China and refuse the protocol — that’s true, you have to respect it. But you don’t have to recite the script. What’s in your control is what you say before you go, what you do before you go, what you say while you’re there, what language you agree to in a joint statement, and what you say afterward.
PW: And Trump actually did a pretty good job in China?
MK: Based on the readouts and his own comments on Air Force One flying back, Xi pressed him hard on the degree of his support for Taiwan and spent a lot of time trying to convey how important it is to him. Trump now has a track record of deferring to autocrats over democratically-elected leaders on these issues. That said, with Trump and global summitry, there’s some comfort in the fact that it could have been a lot worse. What matters now is what the administration does before the next meeting, scheduled for September 24 — plus possibly two international meetings, so there could be three more within a year, potentially including Xi visiting the United States twice, which would be unprecedented. This isn’t a movie; it’s a miniseries. Both sides wanted stability, and both sides got it.
« Constructive strategic stability »
PW: It did calm things down. But one interesting signal — and you’re better at reading the tea leaves — was Xi offering Trump the “partners, not rivals” frame. That seemed important: China wants this too. It doesn’t need war, it needs a cold peace.
MK: That sounds good on the surface — nobody wants an argument that spirals into World War Three, and we can all agree world peace is a good thing. But the problem is that while there wasn’t much substance in terms of business deals, that’s the wrong scorecard. Counting how many Boeings Trump sold isn’t how to judge a meeting like this.
The real question is positioning — not just optics, but the strategic narrative each side is trying to establish. On that front, Xi unveiled what he called a new positioning for U.S.-China relations: “constructive strategic stability.” That may be the most consequential rhetorical outcome of the visit. Foreign Minister Wang Yi has repeated it in subsequent briefings, and Chinese propaganda has kept reiterating it since.
Xi told Trump they’d agreed on a new framework with four pillars: a positive stability with cooperation as the mainstay, a sound stability with moderate competition, a constant stability with manageable differences, and an enduring stability with promises of peace — a classic Chinese rhetorical device, signalling that this formulation is now meant to be treated as authoritative and repeated. Wang Yi then described it as a political consensus between the two leaders. That’s a classic tactic: put a phrase out there, claim the other side agreed to it, and keep repeating the claim until everyone’s too tired to deny it.
The White House readout didn’t mention the framework, though Trump later seemed to accept part of the language around strategic stability, fairness, and reciprocity. The challenge is that China is trying to create a framework in which everyone pretends the relationship is stable, while Beijing keeps advancing a strategy that harms and weakens Western democracies and accelerates its own rise. It doesn’t change the policies these leaders are supposedly going to China to challenge — instead, it lets Xi define what counts as “strategic stability.”
Then, if the U.S. or its allies do something Beijing dislikes, China can say they’re the ones undermining stability and crossing the line.
PW: I’m looking at this as Trump going full America First — focused on North America and the Americas, pulling back from international organizations or using them transactionally. Even on defence, in the last 24 hours there was another message to Canada: “you’re not carrying your weight, so this defence board isn’t going to carry on.” Trump seems to be doing his own thing, while Xi is walking all these leaders through Beijing to build up the idea that China is the next superpower — the message being, if America doesn’t care about these countries, China will take them. But then the Europeans go, and they’re already angry with China on several issues.
So, what’s Xi’s long game here? Is he building a group of allies, or is this more about strategic positioning on specific goods and services?
MK: I don’t buy the cliché that China thinks in 100- or 1,000-year timelines because of some imperial cycle. Chinese leadership mixes long-term strategy with impulsive, sometimes rash responses to events. But it’s fair to say: the Chinese Communist Party literally has five-year plans; Donald Trump has news cycles.
Xi said “constructive strategic stability” would guide U.S.-China relations for the next three years and beyond — not an accidental timeline. It covers the rest of Trump’s term and sets a marker for whatever comes after. The goal is to extend this period of stability and buy China time and space to develop.
In practice, that means Beijing sitting on Nvidia H20 chip licences while it develops domestic alternatives, deepening ties with Russia and Iran so Western pressure becomes less effective, slow-walking rare earth export licences, and embedding “strategic stability” language into the relationship so that any future U.S. administration that pushes back can be accused of breaking a framework Trump himself endorsed.
This matters for Canada because the constraints China can impose on the United States apply even more strongly to middle and smaller powers. The U.S.-China relationship sets the tone; Canada can try to manage its own China policy, but those dynamics still limit what’s possible. So this is a calculated stalling tactic by both Washington and Beijing as they strengthen themselves for an ongoing strategic rivalry.
It’s not de-escalation — it’s a pause to reload.
Iran and Taiwan
PW: Exactly. Trump came back from the summit, and already this week you’re hearing the “TACO” line again — Trump Always Chickens Out — because he’d been threatening to go after Iran. They said they didn’t discuss it, but of course they did; apparently Xi said Iran shouldn’t have a nuclear weapon, so there were some signals there. Do you think they reached any understanding on Iran at that meeting?
MK: Nothing concrete, and the gap between Trump’s account and Beijing’s readout is the story. According to what Trump told Fox News, Xi personally pledged China wouldn’t supply Iran with military equipment, and said, “If I can be of any help at all, I would like to be of help.” The White House readout says the two agreed Hormuz must remain open, and that Xi expressed interest in buying more American oil. The upside for Canada is that China’s experience in the Persian Gulf makes it more interested in diversifying its energy sources — so if Canada can actually get more oil and gas to Pacific tidewater, I’m sure the Chinese would be buyers.
PW: That’s the question.
MK: It’s positive, as long as Canada doesn’t become too dependent on China as a buyer and hand Beijing leverage. Putin is also in China trying to get Beijing to finally close the Power of Siberia 2 pipeline deal, which would send vast quantities of Russian gas to China after Russia lost much of its European market — making Russia increasingly dependent on China.
But back to Iran: the Chinese readout doesn’t even mention it by name. China’s role is described only as promoting peace talks. No pledge on weapons, no commitment on Hormuz.
PW: And on the weapons issue — if China sends the parts and Iran puts them together, then technically you’re not sending a weapon, you’re just sending every piece needed to build one.
I’m also curious about Taiwan. My read — and I think others share it — is that Trump put Taiwan on the table as a bargaining chip. So what does that mean? Does China take that to mean it has to make changes on trade, or on Iran, or concessions elsewhere? Because, as Xi said, Taiwan is the most important issue for Beijing, and Trump put it on the table.
MK: Xi raised Taiwan, as you’d expect in any such meeting. Four things happened on it, roughly in this order: the first was bad for Taipei, the second was better than feared, the third upended the second, and the fourth is potentially explosive.
First, Xi warned the U.S. in stark terms that Taiwan is the most important issue, and said that if things don’t go Beijing’s way, it will become an extremely dangerous situation — Taiwan independence and peace across the Taiwan Strait are mutually exclusive, like fire and water. That’s expected. But the potential basis for strategic balance is this: Taiwan won’t declare independence, and the PRC won’t try to change the status quo across the Strait by force.
PW: We tried that in Hong Kong — it didn’t work out so well.
MK: That’s right. What that leaves China doing is salami-slicing. I think Beijing’s game is to avoid a blockade or full military assault on Taiwan, because that would be immensely costly. But my assessment is that, strategically — not in the next couple of years, but within five, and certainly within ten — Xi wants to make something happen on Taiwan one way or another. That means building the military capability to do it and using that capability as a tool of pressure and coercion to get Taiwan to capitulate peacefully.
In the bilateral itself, Trump held the line better than expected. He said the only person who knows what the U.S. will do on Taiwan is him, which maintains strategic ambiguity. Secretary of State Rubio publicly said U.S.-Taiwan policy is unchanged, and the U.S. readout didn’t mention Taiwan at all. So that went pretty well — Trump basically sidestepped the biggest trap Xi was trying to lay for him.
PW: Trump was also trying to get Taiwanese chipmakers to set up shop in the United States, and they seem willing to do that to some extent.
MK: First, for economic reasons, those factories aren’t as cost-effective as the ones in Taiwan, so the companies have only limited interest. Second, Taiwan’s chip industry matters to everyone — most Canadians’ devices likely have Taiwanese chips in them, so we’re dependent on that supply too. TSMC, Taiwan’s leading chip producer, is what Taiwanese officials call their “silicon shield.” If access to that supply were cut off, or destroyed, it would be catastrophic for the global economy. We all have an interest in preventing that, quite apart from caring about the people of Taiwan, which we should.
For Trump to then say in his Fox News interview that the $14 billion arms package is a good negotiating chip with China, and that he’s holding it in reserve, is risky. He shouldn’t be negotiating that with the PRC in the first place.
PW: Yeah, they shouldn’t get a veto.
MK: And fourth — this is the part that complicates the rest — Trump said on the plane home that he’d call Taiwan’s President William Lai to consult on the package. No sitting U.S. president has spoken with a Taiwanese counterpart since 1979. I think that was probably an offhand remark, and what he likely meant is that the U.S. government will communicate with Taipei on the issue. What should happen now is clear: there needs to be both private and public U.S. reassurance to Taipei that policy hasn’t changed, and that arms shipments will continue.
What all of this means for Canada
PW: I want to end by bringing this back to where we started: how Canada has positioned itself. We could talk for four hours, but this goes to the “can we have our cake and eat it too” question. There’s the break with the U.S. relationship, the Davos speech, Carney going to Europe and saying Europe will be the base from which the new world order springs, then Canada’s strategic partnership with China — and then, last week, the prime minister’s odd comment that he’s prepared to deepen the relationship with the United States. Is there a theory behind all these mixed messages? Have we gone too far in criticizing the Americans to put that piece of Humpty Dumpty back together? Where does that leave us?
MK: First, we have to differentiate between the American people and the Trump administration.
PW: For sure.
MK: Just as I’d always differentiate between the Chinese Communist Party and the people of China, we should differentiate between the American people and the Trump administration. I’m not equating the two governments — they function very differently.
But in both cases, Canadians need to remember our problems are with governments. I was just in the United States, and almost everyone I spoke to made clear they don’t share Trump’s views about Canada; many were frankly embarrassed by them.
I was also at a Canadian Chamber of Commerce conference in Ottawa, where the view from business was that the Canada-U.S. commercial relationship — one of the largest trade and investment relationships in the world — remains the ballast of the broader relationship.
So: keep calm and diversify. Manage the administration, find other anchors inside the United States, work with people who want a more reasonable relationship. But Canadians also need to understand some things have fundamentally changed. Part of that is Trump’s personality and his transactional, undemocratic approach to governance. But there’s also a wider strategic shift: the United States sees China, and to a lesser extent Russia, as genuine threats to American interests globally — which is why many policies that started under Trump continued under Biden.
Canadians should lean into that reality rather than pretend it isn’t there. Canada doesn’t have to agree with every U.S. policy or statement, but it does need to demonstrate solidity, reliability, and consistency. I think the prime minister is trying to walk a fine line: showing Canada has options and isn’t totally dependent on the United States, while making clear Canada wants a good relationship and a good deal, within limits.
PW: I agree with that. It just seems, from where I sit, unnecessarily provocative on many days. We know what people in Canada think about Trump, and even what a lot of Americans think of him, so there’s an easy political hit in saying something rude about him here. But then we talk about a strategic partnership with China, flirt with ideas like joining the EU — not really, but at least polling it — and promise countries things we can’t yet deliver because we can’t get our own house in order domestically. In the end, whether by design or by default, the relationship with the United States will still be Canada’s most important economic relationship.
MK: You have vastly more experience than I do analyzing Canadian politics, so I’ll defer to you there. But I basically agree. A few things are driving the government’s behaviour, some strategic and some more personal. Mark Carney is the archetypal Davos Man — a global figure with much more kinship with European elites than with the Trump administration, and there’s a high degree of personal antipathy between Trump and many of the Euro-Atlantic elites he sees as more liberal than he is.
There’s also a domestic-politics element: it may help Carney win a majority to point to someone outside the country as the source of Canada’s problems. But what the government actually needs to do is implement the grand plans and announcements it’s made over the past year: hold to a carefully calibrated China policy that seeks limited economic benefits without creating deeper dependence; manage and stabilize the relationship with the United States so Canada can get a well-negotiated CUSMA, or something to replace it, that protects as much of the economic relationship as possible; diversify trade with other countries; and pursue an industrial and domestic economic policy that revives growth and productivity after decades of weakness.
It’s a full suite of things they need to do — and, frankly, the Trump-Xi summit didn’t make any of it easier.
Canada in the geoeconomic squeeze
PW: I have to end with this. We had Carlo Dade on the podcast a couple of weeks ago — he and others at the University of Calgary are working on a bigger-picture rethink of Canada’s relationship with the United States. I asked him about cozying up to Europe, the prime minister’s line that we’re “the most European of the non-European countries,” and he had a funny take. He said joining Europe now, with all its troubled economies, is like going to an Alcoholics Anonymous meeting where they still drink. You spend a lot of time in Europe — is there some truth to that?
MK: The Europeans have their own challenges. What Canada needs to be careful about is getting caught in the same geopolitical and geoeconomic trap as Europe, Australia, Japan, and others. The United States is trying to close its doors to China’s manufacturing surplus because it wants to rebuild its own domestic manufacturing capacity. But if the world’s two biggest manufacturers, China and the United States, both want a bigger share of global manufacturing, where does that share come from? Everybody else. Europe, and every other country that wants to maintain advanced manufacturing, is getting squeezed.
So you need tariffs, quotas, and trade barriers to manage that and protect yourself. But you also need serious domestic policy: deciding which industries to protect, cultivate, and support; creating the conditions for productivity growth; and figuring out what you can safely buy from other countries because it doesn’t matter strategically. Given Mark Carney’s background as an economist, he should be well equipped to do that. But so far, while letting in Chinese electric vehicles may make sense as a short-term tactical calculation, it’s risky in the long run.
PW: It comes at a big cost.
MK: If I might jump in with a last word: a quick shout-out to someone who we might call the third Michael: Michael Chong, another Canadian targeted by the Chinese Communist Party. He’s the Conservative foreign affairs critic and is currently in Taiwan. I want to congratulate him on his courage in going to Taipei despite China’s pressure.
Just before his trip, China’s ambassador was essentially telling Canadians: “we’ve let you out of the doghouse, trade is improving, and now here’s what we don’t want you to do — don’t acknowledge Taiwan, and don’t send Canadian naval ships through the Taiwan Strait.”
Chong’s trip sends a clear signal: Canada wants a stable economic relationship with China, but not at the expense of our sovereignty or our ability to make our own foreign policy decisions.
