Canada and China reach trade deal, signaling a new world order

Canadian Prime Minister Mark Carney concluded a visit to Beijing after securing what officials described as a “preliminary but landmark” trade agreement. The trip marks the first time a Canadian prime minister has visited China in nearly a decade, signaling a significant thaw in bilateral relations.

Under the interim deal, Canada will allow up to 49,000 Chinese electric vehicles to enter its market. In exchange, Beijing will reduce tariffs on Canadian exports including canola, lobster, and other seafood through the end of the year.

Both nations also committed to a broader reduction of tariffs across several key industries.

The diplomatic push aims to reduce Canada’s economic dependence on the United States, which currently accounts for approximately 70% of Canadian exports. The move follows recent statements from U.S. President Donald Trump, who claimed the United States does "not need Canadian products."

The agreement has sparked a mixed reaction within Canada. Opposition leaders criticized Carney, raising concerns regarding national security and the impact on domestic employment, particularly within the automotive sector.

Prime Minister Carney’s visit to Beijing serves as a definitive case study in the strategic hedging middle powers are now forced to navigate as U.S.-China competition intensifies. The primary driver, framed by Ottawa as a matter of "urgency," is the increasingly volatile trade relationship with the Trump administration. Confronted by protectionist headwinds from its closest ally and largest trading partner, Canada is pivotally seeking market diversification, with China representing an unavoidable, if high-stakes, alternative.

This diplomatic maneuver remains a precarious balancing act. Carney’s deliberate adoption of the phrase "new world order"—a rhetorical hallmark of Beijing’s vision for a post-American era—was a calculated attempt to build rapport with President Xi Jinping. While intended to secure tactical advantages, such language risks sparking friction with Washington and traditional Western partners. The administration is framing the move not as a wholesale pivot, but as a "recalibration" intended to bolster Canada’s "strategic autonomy" in an increasingly multipolar landscape.

The structural risks of this strategy are substantial. By deepening its reliance on the Chinese market for key exports like canola, Ottawa is exposing itself to a sector Beijing has previously weaponized as a tool of economic statecraft. Analysts suggest that while the mission may yield immediate commercial gains, it does little to insulate Canada from future "economic coercion." In essence, Ottawa may simply be trading an unpredictable dependence on the United States for a more strategically fraught vulnerability to China.

This agreement carries no significant or direct impact on the Vietnamese-American community’s economic mainstays or immigration pathways. Small businesses—ranging from local phở restaurants in Little Saigon to the nationwide nail salon industry—will see no immediate changes to their operations. Furthermore, the deal does not alter current remittance flows to family members in Vietnam, nor does it affect standard visa categories and processing, including F2B family sponsorships, H-1B work visas, TPS, or EB-5 investments.