Trump Shows Surprising Support for Canada's Trade Deal with China

Summary

US President Donald Trump unexpectedly supported Canada’s move to deepen economic ties with China, stating Ottawa is doing “what it should be doing.” This follows a visit by Canada’s Prime Minister to Beijing which resulted in a new agreement on electric vehicles and canola oil. Trump’s remarks coincide with his recent public dismissal of the US-Mexico-Canada Agreement (USMCA), where he claimed the US doesn’t need Canadian or Mexican goods, a move seen as a catalyst for Canada to strengthen its relationship with China.

Impact Analysis

This isn’t Trump becoming a free trader. It’s him strategically dismantling the North American trade bloc to enhance his own leverage. By ‘supporting’ Canada’s deal with China, he’s basically saying the USMCA is dead to him and that Canada is on its own. He wants to shatter the myth of the ‘special’ US-Canada relationship, forcing Ottawa to diversify and proving his point that old alliances don’t matter. This is classic Trump playbook: create chaos to reset the negotiating table entirely on his terms. The primary effect is a significant increase in risk for any company with an integrated North American supply chain. The ‘special relationship’ premium for Canadian assets just evaporated. This is a structural negative for the Canadian dollar; it’s time to re-evaluate exposure to Canadian industrials and financials.