Fred, from where I sit it looks as though Canada has done the right thing diversifying away from the Disunited States. Did you see the survey about which country most countries think is the most dangerous? The USA came out top.
One thing about your writing, I like, is it is simple enough for laymens to understand! Canada may have a "highly educated" population (I beg to differ) but, the fact of the matter is canadian reading skills remains grade 3-9 level. This is why your writings matters! There is no fluff, no guff, with a bit of humor, factual, and to the point! People can and should read your work with ease and that matters, now more then ever! Because I share your work I now have people asking me about things you write and more! Knowledge matters and slogans, rhetoric, lies, and sound bites do not! Thanks for that!
Excellent post, excellent moves by our wonderful country. We've been long overdue to establish a diversified group of trading partners. I am glad to see it happening, and hope it is proceeding cautiously.
Great post Fred! Love this line: "America tried to remind Canada who held the power." Love that Canada pushed back with our own power, ya, other countries are now competing for some of the goods that normally cross the ditch! Are ya ready boots??? haha
We have been lucky and largely sheltered by the existing CUSMA agreement, and global demand for low carbon aluminum and steel to offset some of the lost volume previously sold to the US. Increasing raw material sales is not an equal substitute for lost industrial output. So while the existing CUSMA remains effective we need to make bolder diversification moves. If CUSMA is not renewed the Canadian auto industry as we know it will be in a death spiral. Will need an aggresive plan to transition Canada into a maker mentality, improving internal trade and reinventing our infustrial capacity with our global allies. Time will tell how this all settles out. I predict CUSMA will not be renewed so hopefully their is a plan to fast track a maker industrial plan.
I agree... selling more raw materials is not a substitute for strong industrial output.
If CUSMA isn’t renewed, Canada will need a serious “maker economy” plan... internal trade, manufacturing, energy, and stronger ties with trusted allies.
We may finally be entering a period where Canada has to build more and depend less.
How much did China buy exactly from Canada was that the majority of the purchased agricultural products? Germany is looking at LNG that doesn’t mean anything. And based on this leaders friendship with China 🇨🇳 you all up there need to be very careful. Look at us down here now . Try to switch back and break away from China is difficult.?But remember they are our enemies just like over immigration of Muslims.?
The "China Trade Deal" was essentially a reset to where things were BEFORE the USA dragged Canada into the "Two Michaels" situation over Huawei. To punish Canada, they locked up the Michaels and stopped buying produce, pork, and seafood from Canada -- of huge concern to Western Canada (China was their largest customer) and the Maritimes. Value varies, but roughly C$9-$11 Billion annually. China also stopped purchasing from USA too -- and that relationship hasn't reset yet (they have only offered to purchase about half of what they bought before). All we had to do was import a few EV's (C$2 Billion worth) -- which generally are of better build than anything Detroit has come up with. There's not really anything else to the deal.
Why would China agree to such a lop-sided "deal"? Essentially, with both USA and Canada being blacklisted, they shifted to Brazil for their soybeans etc. But that's a lot of missing food still, and sooner or later, the Chinese people want their beans! So, a motivation to restore their food supply, plus an advantage of leverage over USA in trade negotiations (a leverage for Canada, too, as it puts us economically on a better footing against USA pressures).
You are correct to be cautious with China -- they have ways of weaselling their way into your manufacturing supply chains in ways that are hard to remove them, and then we're right back to where we started -- except it's China instead of USA. And both have current and significant human rights violations.
The big question to watch: Has China "learned" anything from how the middle-powers are reacting to USA bullying? If China's behaviour becomes like USA (and it certainly had in the past - the "two Michaels" being such an example), then they will see much of the world's wrath rain down on them, too (lots of Chinese products we can boycott as well - with other countries eager to replace them in the manufacturing food chain). China can benefit greatly from a reduced USA - but only if they play nice.
(This same concern, a year or two ago, I also had for Russia. However, with the current state of things, they are (almost) becoming a non-issue: Near-bankrupt, exhausting their military ordnance, and with little (other than oil, vodka, and caviar) to export. And other countries distill vodka.)
PS: Yes, Carney has some Chinese connections -- or rather, the Liberal Party as a whole has. But remember that western farmers are even more beholden to China (and most of them vote conservative, yet they want a lot of Chinese business), . There was propaganda in the West a year or so ago, literally with farmers voicing, "Carney, why are you worried about Trump tariffs on the auto sector? Just give China whatever it wants and get our agricultural sector back on track." Carney didn't actually have to give up much.
PPS: If you ask Liberals about their Chinese influences, then you also have to ask CPC politicians about their Indian influences. Poilievre is the only leader without a security clearance, and thus the only one who wasn't read-in to how the Indian government was trying to influence CPC's political postures (allegedly). On a superficial level, that's now worked its way out into the public somewhat. I have no idea about the specifics or whether it was more than just trying to get Indian-friendly candidates elected in ridings (which one could also say China had likely been doing for several Liberal candidates).
Short of it: China isn't some great economic saviour, and we should be doing everything we can to NOT let them become #1 customer. Even in Western agriculture, there's a lot of world-wide mouths to feed these days, and many farmers have also seen the advantage to not being too reliant on any one global customer.
This is all to slow the process of China taken over Taiwan 🇹🇼.I personally really don’t care what you do in Canada but remember the BIG three, Detroit build a lot of cars in Canada. It’s not the Chinese car it’s there price they will crush the competition till they gone and boom . Prices go up and jobs lost .
. . . and that seems to be the lesson that the world learned from Carney's Davos speech (and the point of it): NATO, BRICS, EU, G7, Mercursor, ASEAN, etc. are not irrelevant. But they shouldn't be rigid either -- associations exist for specific purposes, and it's okay to diversify to others for different reasons. Just like USA/China, Canada should also carefully look at arrangements with India. Discussions so far seem mutually beneficial -- but again, we shouldn't be selling all our oil/uranium/etc. to them ;-)
Anyway to you point, we are seeing some unprecedented interest in changing global trade - and it is happening a heck of a lot faster than I thought it would (though we're a year or so away until much of it really hits -- these things take time). About the only bit that I've seen take off relatively quickly has been enhanced trade with Mexico (especially in the produce aisle!) - but that only happened quickly because we already had CUSMA CETP in place already, so it was relatively easy to do (I had no idea they needed potatoes, and were eager to give us the same deal that they had for US suppliers).
Fred, I have no idea how you find the time to do all the publishing! (maybe when I reach retirement in five or so years, I'll be as prolific as you!). Please keep up the excellent work!
Fred, from where I sit it looks as though Canada has done the right thing diversifying away from the Disunited States. Did you see the survey about which country most countries think is the most dangerous? The USA came out top.
Hard to argue with diversification, Penny. Depending on one customer was always risky — especially one this unpredictable.
One thing about your writing, I like, is it is simple enough for laymens to understand! Canada may have a "highly educated" population (I beg to differ) but, the fact of the matter is canadian reading skills remains grade 3-9 level. This is why your writings matters! There is no fluff, no guff, with a bit of humor, factual, and to the point! People can and should read your work with ease and that matters, now more then ever! Because I share your work I now have people asking me about things you write and more! Knowledge matters and slogans, rhetoric, lies, and sound bites do not! Thanks for that!
Keith… this may be one of the nicest compliments I’ve received. Thank you.
I work hard to make complicated issues understandable without the fluff, jargon, or political theatre 😄
My goal has always been simple...
if regular folks can understand what’s happening, they can think for themselves.
And the fact people are asking you about what you share? That means a lot.
Appreciate you, my friend.
Excellent post, excellent moves by our wonderful country. We've been long overdue to establish a diversified group of trading partners. I am glad to see it happening, and hope it is proceeding cautiously.
Thanks Leslie.
I think a lot of Canadians are feeling the same way right now.
Diversification should’ve started years ago... but better late than never.
The key now is moving carefully and building strong, reliable partnerships.
Yes, we need to move carefully. Building strong, reliable partnerships is definitely the way to go. Diversification is also the way to go.
Great post Fred! Love this line: "America tried to remind Canada who held the power." Love that Canada pushed back with our own power, ya, other countries are now competing for some of the goods that normally cross the ditch! Are ya ready boots??? haha
Haha… I think Canada finally found its boots, Patsy 😄
Turns out when someone starts throwing elbows, you either fold…
or start finding new customers.
“Are ya ready boots?” may be Canada’s new trade policy!
We have been lucky and largely sheltered by the existing CUSMA agreement, and global demand for low carbon aluminum and steel to offset some of the lost volume previously sold to the US. Increasing raw material sales is not an equal substitute for lost industrial output. So while the existing CUSMA remains effective we need to make bolder diversification moves. If CUSMA is not renewed the Canadian auto industry as we know it will be in a death spiral. Will need an aggresive plan to transition Canada into a maker mentality, improving internal trade and reinventing our infustrial capacity with our global allies. Time will tell how this all settles out. I predict CUSMA will not be renewed so hopefully their is a plan to fast track a maker industrial plan.
Larry... excellent points.
I agree... selling more raw materials is not a substitute for strong industrial output.
If CUSMA isn’t renewed, Canada will need a serious “maker economy” plan... internal trade, manufacturing, energy, and stronger ties with trusted allies.
We may finally be entering a period where Canada has to build more and depend less.
Another great article Fred, thank you 💯🇨🇦💪🏻
How much did China buy exactly from Canada was that the majority of the purchased agricultural products? Germany is looking at LNG that doesn’t mean anything. And based on this leaders friendship with China 🇨🇳 you all up there need to be very careful. Look at us down here now . Try to switch back and break away from China is difficult.?But remember they are our enemies just like over immigration of Muslims.?
The "China Trade Deal" was essentially a reset to where things were BEFORE the USA dragged Canada into the "Two Michaels" situation over Huawei. To punish Canada, they locked up the Michaels and stopped buying produce, pork, and seafood from Canada -- of huge concern to Western Canada (China was their largest customer) and the Maritimes. Value varies, but roughly C$9-$11 Billion annually. China also stopped purchasing from USA too -- and that relationship hasn't reset yet (they have only offered to purchase about half of what they bought before). All we had to do was import a few EV's (C$2 Billion worth) -- which generally are of better build than anything Detroit has come up with. There's not really anything else to the deal.
Why would China agree to such a lop-sided "deal"? Essentially, with both USA and Canada being blacklisted, they shifted to Brazil for their soybeans etc. But that's a lot of missing food still, and sooner or later, the Chinese people want their beans! So, a motivation to restore their food supply, plus an advantage of leverage over USA in trade negotiations (a leverage for Canada, too, as it puts us economically on a better footing against USA pressures).
You are correct to be cautious with China -- they have ways of weaselling their way into your manufacturing supply chains in ways that are hard to remove them, and then we're right back to where we started -- except it's China instead of USA. And both have current and significant human rights violations.
The big question to watch: Has China "learned" anything from how the middle-powers are reacting to USA bullying? If China's behaviour becomes like USA (and it certainly had in the past - the "two Michaels" being such an example), then they will see much of the world's wrath rain down on them, too (lots of Chinese products we can boycott as well - with other countries eager to replace them in the manufacturing food chain). China can benefit greatly from a reduced USA - but only if they play nice.
(This same concern, a year or two ago, I also had for Russia. However, with the current state of things, they are (almost) becoming a non-issue: Near-bankrupt, exhausting their military ordnance, and with little (other than oil, vodka, and caviar) to export. And other countries distill vodka.)
PS: Yes, Carney has some Chinese connections -- or rather, the Liberal Party as a whole has. But remember that western farmers are even more beholden to China (and most of them vote conservative, yet they want a lot of Chinese business), . There was propaganda in the West a year or so ago, literally with farmers voicing, "Carney, why are you worried about Trump tariffs on the auto sector? Just give China whatever it wants and get our agricultural sector back on track." Carney didn't actually have to give up much.
PPS: If you ask Liberals about their Chinese influences, then you also have to ask CPC politicians about their Indian influences. Poilievre is the only leader without a security clearance, and thus the only one who wasn't read-in to how the Indian government was trying to influence CPC's political postures (allegedly). On a superficial level, that's now worked its way out into the public somewhat. I have no idea about the specifics or whether it was more than just trying to get Indian-friendly candidates elected in ridings (which one could also say China had likely been doing for several Liberal candidates).
Short of it: China isn't some great economic saviour, and we should be doing everything we can to NOT let them become #1 customer. Even in Western agriculture, there's a lot of world-wide mouths to feed these days, and many farmers have also seen the advantage to not being too reliant on any one global customer.
Grant... excellent context and nuance here.
My view is simple:
Canada should avoid trading dependence on any single country.
The lesson from the U.S. situation should be crystal clear by now... overreliance eventually becomes leverage.
Diversify broadly, trade smart, and keep Canada in the driver’s seat.
Appreciate the thoughtful addition.
This is all to slow the process of China taken over Taiwan 🇹🇼.I personally really don’t care what you do in Canada but remember the BIG three, Detroit build a lot of cars in Canada. It’s not the Chinese car it’s there price they will crush the competition till they gone and boom . Prices go up and jobs lost .
Fair questions, David.
China wasn’t the majority buyer of Canadian agriculture...
but demand for products like wheat did increase.
And you’re right... Germany looking at LNG isn’t the same as signed long-term volume yet. My bigger point is diversification.
Canada being overly dependent on one customer has always been risky.
As for China, I don’t think blind dependence on any country is smart...
including China or the U.S.
Canada needs more trading partners, not new masters.
. . . and that seems to be the lesson that the world learned from Carney's Davos speech (and the point of it): NATO, BRICS, EU, G7, Mercursor, ASEAN, etc. are not irrelevant. But they shouldn't be rigid either -- associations exist for specific purposes, and it's okay to diversify to others for different reasons. Just like USA/China, Canada should also carefully look at arrangements with India. Discussions so far seem mutually beneficial -- but again, we shouldn't be selling all our oil/uranium/etc. to them ;-)
Anyway to you point, we are seeing some unprecedented interest in changing global trade - and it is happening a heck of a lot faster than I thought it would (though we're a year or so away until much of it really hits -- these things take time). About the only bit that I've seen take off relatively quickly has been enhanced trade with Mexico (especially in the produce aisle!) - but that only happened quickly because we already had CUSMA CETP in place already, so it was relatively easy to do (I had no idea they needed potatoes, and were eager to give us the same deal that they had for US suppliers).
Fred, I have no idea how you find the time to do all the publishing! (maybe when I reach retirement in five or so years, I'll be as prolific as you!). Please keep up the excellent work!
Grant... excellent context and nuance here.
I agree with your core point... diversification matters, dependency doesn’t.
Canada shouldn’t trade one overreliance for another.
And yes, the speed of global trade shifts right now feels remarkable.
Appreciate the thoughtful comment... and the encouragement 😄