As Prime Minister Mark Carney underscored last week in Davos, the

world of trade and international relations

has radically changed over the past few months and with two-thirds of our economy tied to import and export trade, Canada cannot afford to tread water. We must navigate the waters we find ourselves in, waves and all.

Canada is right to re-engage with the w

orld’s second-largest market

, but how we do so will present us with new dilemmas and a host of questions that need consideration.

Cybersecurity

. Chinese electric vehicles (EVs) have been called

roaming surveillance devices

, with hundreds of monitoring components both inside and outside the vehicle. How they can be accessed, monitored, overridden, compromised or even weaponized is unknown.

Canada can play a leadership role in the development of common North American data standards and cyber safeguards for the EV sector, as a Senate report recommended as far back as 2018.

Affordability

. The case for Chinese EVs is often that they offer eco-conscious consumers

cheaper options

. But that overlooks that they are broadly subsidized and their raw materials, such as steel and aluminum, are manufactured with some of the world’s most carbon-intensive coal-fired production.

Meanwhile, Canada’s domestic players are among the greenest globally. For balance, the government may have to consider carbon border adjustment mechanisms, or tariffs on products that appear cheaper because they don’t meet the same environmental standards as our domestic industry.

Jobs

. It is still unclear whether opening ourselves to Chinese EVs means finished goods coming to our shores or new entrants into

our manufacturing sector

under Chinese ownership.

If it’s only finished products, then it’s reasonable to expect more chaos and deteriorating conditions for our workers in aluminum, steel and automaking, unless the government introduces new requirements, such as investment in local manufacturing for those Chinese companies that want access to our market.

Trade

. As we’ve already seen, any closer integration between China and Canada will raise concerns in the United States about how rules of origin are being applied to parts and materials used in North American products under the

Canada-U.S.-Mexico Agreement

(CUSMA), so we don’t become a backdoor for entry into the U.S. market.

Given that the U.S. is and always will be our largest trading partner and that we have so much at stake in a shared continental future, we still need to carefully listen to our neighbour’s concerns.

Underlying these concerns is another loaded question: Can Canada ever succeed if we continue to let ourselves be divided and pitted against ourselves: premier against premier, region against region and sector against sector?

China knows what it’s doing when it inflicts maximum pressure on our agricultural sector in a fight over manufactured goods. U.S. Treasury Secretary Scott Bessent knows what he’s doing when he mentions separatist sentiment in Alberta.

Our tendency in Canada to find division — to be provincial in the worst sense of the word — is easily used against us. Frequently, we do it to ourselves.

The ink on the China framework wasn’t even dry before the press lined up to paint this as cars versus canola and rural farmer livelihoods versus urban union jobs. Saskatchewan Premier Moe, accompanying the prime minister in China, was the deal’s champion; Ontario Premier Ford came out punching.

But a more nuanced voice was Manitoba Premier Wab Kinew, who offered a bridge between Saskatchewan and Ontario. Noting his province’s pork industry is still shut out of China, he took a national outlook by acknowledging the real pressure on producers and presenting the framework as “progress” toward finding better solutions in our disagreements with China.

“This is a real impact today that we’re facing with Chinese tariffs on agricultural products,” he said. “(But) the impact on Ontario autoworkers we’re being warned about … there is time for us to support your industry.”

In other words: we can do both. It’s not about picking winners or losers, but about giving our entire country the best ability to navigate the changing waters around us.

As geopolitical adviser Michael Kovrig said, “It’s good that

Canada and China

are talking again … (but) Canadian negotiators should keep in mind that their (Chinese Communist Party) counterparts will link issues, are ruthlessly transactional and won’t feel bound to honour any agreements they sign.”

Sound familiar? These lines could just as easily describe the

trade interactions we’ve had with the U.S.

over the past 12 months. And that brings us back to what Carney signalled at the World Economic Forum in mid-January: we cannot wish for yesterday or wait for tomorrow. We’re stuck with a set of strategic transactions and shifting considerations and forced to sink or swim when it comes to today’s trade.

What China and Canada have announced is not a comprehensive free-trade agreement, which would require advance notice to our partners under CUSMA. It is a cautious first move by both countries to step back from the tariffs and trade friction that have weighed on their relationship for almost a decade.

Extending reduced tariffs on some agricultural products through 2026 is significant and provides needed certainty for farmers, processors and the agri-food supply chain who were bearing a disproportionate amount of the pain here.

It does not address full market access for other sectors such as pork or beef, which is now highly restricted.

Yet it gives us the foundation to have conversations about how we can expand our trade in areas we are comfortable with, built on clear, enforceable rules that both sides are prepared to follow.

Things have changed. We need leverage and we need options. Like it or not, Canada must be willing to adapt and to trade a little less in our values while we derive more value from the strategic trade-offs we’ll need to make.

  • William Watson: Trump’s latest move proves Carney’s Davos analysis was correct
  • Scott Moe: For Canada’s economy, pragmatic engagement with China beats isolationism

Matthew Holmes is executive vice-president of the Canadian Chamber of Commerce.