Tense Canada-China bilateral ties will not ease soon

Significance

Prime Minister Justin Trudeau has taken a strong line against Beijing now that he feels Canada has an appreciative and reliable ally in Washington, triggering retaliatory Chinese moves. With further action likely in the coming months, Canada’s political and trade disputes with China are expected to escalate.

Impacts

• China will continue to target Canadian exports in order to place economic pressure on Ottawa.
• Canada will work to develop its reserves of rare earth minerals and protect them from Chinese investment.
• Ottawa and Washington will coordinate action on trade to decouple aspects of the Chinese and North American economies.