This article originally appeared in the Western Standard.
By Khanh Vu Duc, September 4, 2026
Prime Minister Mark Carney was right to walk away from the latest Canada–US trade talks. But he should not confuse resisting Washington with balancing Washington.
The collapse of negotiations, followed by Washington’s new 50% tariffs on roughly $28 billion of Canadian goods, marks a new rift in a relationship that will not simply return to pre-Trump normality. Carney says the United States (US) demanded too much and offered too little, including terms affecting Canadian culture, the auto sector, and Canada’s ability to negotiate future trade agreements.
In his August 22 remarks, Carney set out Canada’s position on the negotiations. If that account is accurate, Ottawa was right to say no. But walking away is not a strategy. What Canada does next matters more.
Carney has correctly identified Canada’s vulnerability: too much of the economy depends on one market and one relationship. The answer, of course, is to diversify into new markets without stumbling into another strategic dependency.
Canada should expand trade with Europe, Japan, South Korea, India, Australia, and Southeast Asia. It should build the infrastructure and domestic capacity needed to reach those markets and make Canada more competitive at home.
However, Carney’s January 2026 decision to establish a “new strategic partnership” with China deserves scrutiny. Ottawa has every right to trade with Beijing. But trading with China is not the same as making China a strategic counterweight to America. The partnership covers not only trade and energy, but also security, multilateralism, and culture.
After all, geography matters. The US is not simply Canada’s largest customer. It is our continental partner in defence, intelligence, energy, infrastructure and industrial supply chains. Meanwhile, China — located an ocean away — has a security architecture and economic ecosystem that are fundamentally at odds with ours.
Canada should reject two bad choices: accepting whatever Washington demands or moving closer to Beijing to balance American power.
Carney has made economic coercion a central theme of his foreign policy thinking. The current crisis is testing whether Canada can resist pressure from a great power without sacrificing its own interests. His August 21 statement on the trade negotiations underscored Canada’s defiant response to the US pressure.
Ottawa should be able to tell Washington: Canada chooses its own trading partners. It should also tell itself: China will not become Canada’s bargaining chip against the US.
Canada’s sovereignty gives it the right to trade with China. It does not require Canada to make China part of its geopolitical strategy.
The automobile dispute exposes the stakes. Canada’s auto industry is part of an integrated North American production system. Carney says US proposals affecting Canadian auto content and vehicle tariffs would have made production in Canada increasingly uneconomic.
If Washington wants North America as a whole to compete with China, it should not pursue policies that weaken Canadian manufacturing and push investment south of the border. Ottawa, meanwhile, should not rush to deepen integration with China as a response to the US trade war.
The goal should be a stronger North American industrial base and wider access to other democratic markets. That would strengthen both Canada and the US.
Carney is right that the international order has changed and Canada needs greater resilience. But not at the cost of swapping dependence on one hegemon for another, less democratic one.
Canada should diversify trade, strengthen infrastructure, expand exports to democratic economies and protect critical sectors from coercion. It should trade with China, where doing so serves Canadian interests, while maintaining strict safeguards around critical minerals, technology, data, telecommunications, and strategic infrastructure. Above all, Canada should remain anchored in North America.
That does not mean accepting every American demand. Nor does it mean pretending Washington will always be predictable or reliable.
The US is difficult to replace because geography, security, and economic integration make the relationship unique. But while confrontation may play well politically at home, the Carney government needs to also be realistic. The goal is not to choose between Washington and Beijing, but to make Canada strong enough to deal with both on its own terms.
Canada needs more markets, stronger domestic capacity, and greater freedom of action — not another great power to balance the one next door. It means having enough options to say no to America when necessary without imagining that Canada can afford to choose China instead.
Macdonald-Laurier Institute contributor Khanh Vu Duc is an Ottawa-based lawyer, essayist, and commentator on international affairs. He has appeared on BBC News, Radio Free Asia, Voice of America (Vietnamese), and Asia Sentinel (English).
