Read on France 24How Trump's Unpredictable Trade Policies Are Pushing US Allies Toward China
The return of Donald Trump to the White House has ushered in a dramatic shift in US trade policy, characterized by aggressive tariffs and unpredictable demands. This approach is causing key American allies, like Canada, to seek economic alternatives and strengthen ties with China to mitigate risk. Canada's recent decision to slash tariffs on Chinese electric vehicles in exchange for agricultural concessions exemplifies a strategic realignment, signaling that the perceived economic threat from the US now outweighs that from its strategic rival. This article examines the immediate fallout and long-term implications of this policy shift for North American alliances and the global economic order.
The foundational principles of US-led global trade, built over seven decades, are undergoing a seismic shift. Since returning to office, President Donald Trump has aggressively overturned policies supporting free trade, imposing sweeping tariffs and creating an environment of economic unpredictability. This belligerent stance is forcing America's closest trade partners to reassess their dependencies and explore strategic alternatives, often aligning them more closely with China—America's greatest economic rival. The recent Canada-China electric vehicle deal is a stark case study in this global realignment, highlighting how erratic US policy is reshaping international alliances.
The Catalyst: Trump's Tariff-First Trade Policy
President Trump's trade strategy marks a radical departure from post-World War II norms. He has implemented double-digit tariffs on imports from nearly every country and targeted specific industries like steel and automobiles with additional levies. This approach, which critics warn risks fueling inflation and harming US industries, is not applied consistently. Tariffs have been used as arbitrary diplomatic tools, with threats levied against countries for political reasons, such as Brazil's prosecution of Trump ally Jair Bolsonaro or Denmark's stance on Greenland. This unpredictability makes long-term planning impossible for trade-dependent nations, pushing them to seek more stable partnerships.
Canada's Strategic Pivot: The EV Tariff Deal
Canada's decision to cut its 100% tariff on Chinese electric vehicles to 6.1% is a direct response to this US volatility. In return, China lowered its tariff on Canadian canola seeds from 84% to 15%. This deal represents a profound strategic recalculation. As Edward Alden of the Council on Foreign Relations notes, "The economic threat from the United States is now perceived by Canadians as far bigger than the economic threat from China." For Canadian Prime Minister Mark Carney, the move addresses two critical needs: securing a vital export market for canola farmers and accessing Chinese EV technology and supply chains to prevent the North American auto industry from becoming obsolete.
Risks and Domestic Criticism
The gamble is not without significant peril. Domestically, the deal faces fierce opposition from Canadian autoworkers and political leaders like Ontario Premier Doug Ford, who warns it gives China a "foothold" at the expense of Canadian jobs. Internationally, the move risks severe retribution from the Trump administration, especially with the crucial US-Mexico-Canada Agreement (USMCA) up for renewal. Trump could demand punitive concessions or threaten to withdraw from the pact altogether, a terrifying prospect for a nation that sends 75% of its exports to the United States.
A Global Pattern: Allies Seeking Alternatives
Canada is not alone in diversifying away from the US market. The European Union is finalizing a trade pact with the South American Mercosur bloc and pursuing a deal with India. China itself, battered by US tariffs, has successfully diversified its exports to Europe and Southeast Asia, achieving a record global trade surplus of $1.2 trillion in 2025 despite falling US exports. These moves indicate a broader fragmentation of the global trading system, where nations are building parallel networks to insulate themselves from American policy shocks.
Conclusion: The Erosion of US Economic Leadership
The immediate effects of Trump's trade policies—investment deals like Taiwan's $250 billion pledge—may create a facade of strength. However, the long-term consequence is the steady erosion of US economic leadership and the cohesion of its alliances. By creating an environment of hostility and unpredictability, the US is inadvertently pushing its partners into the arms of its strategic competitor. As economist Mary Lovely observes, Canada's deal with China sends "a big signal that Canada is looking to other partners and has options." This sentiment, echoed by allies worldwide, suggests a fundamental and potentially lasting realignment in the global economic order, driven not by Chinese expansionism but by American retreat.
