‘We have a lot to lose’: Will Trump’s visit to China threaten Carney’s diversification?

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Finally, while Beijing is expected to push for a moratorium or a delay on U.S. arms sales to Taiwan, that is another area where little action is expected from Trump.

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Chiu says Xi will also push on the U.S. position on Taiwan, but that Trump is unlikely to budge — though some inside the beltway still fear a disastrous gaffe.

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The other hot topic? Iran. Trump has sought Xi’s help in ending the war in Iran and easing tensions in the Strait of Hormuz, despite his comments Wednesday about not needing Beijing’s help.

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“China will try to avoid appearing to pressure Iran in any way that would seem to support the United States,” said Colin Tessier-Kay, program manager with Hudson Institute’s China Center, noting that Beijing wants to preserve ties with Tehran and its broader position in the Middle East.

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But while the U.S. and China talk security, the real pressure on Canada is coming from trade.

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Canada’s exposure

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A deal for China to buy more U.S. soybeans would likely reduce imports from South America and other suppliers, including Canada.

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“If China commits to purchasing more soybeans, LNG, and oil, obviously our market share is going to be reduced,” Hasmath said.

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“The big picture is that Carney’s diversification strategy is going to get a test.”

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If exports fall, said Nagy, “Carney’s diplomacy with China in January really has come to nothing.”

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“Hopefully, we’re not going to be sold out.”

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As for EVs, trade watchers don’t expect Trump to broach the subject of Carney’s EV deal with Xi.

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“Canada is less likely to come up as a topic of conversation,” Chiu said, adding that the summit is unlikely to impact this summer’s Canada-U.S.-Mexico Agreement review.

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“I think regardless of what happens during the summit … the U.S. is going to continue to deal bilaterally with Canada and Mexico,” he said.

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Nagy painted a different picture.

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“If there’s a big change — if Trump can secure the agricultural purchases and investments…,” he said, “that may create the conditions where he can force a much steeper cost to renewing the USMCA.”

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If the summit leads to the U.S. allowing Chinese EV investment in America — however unlikely — it could even reshape the North American auto landscape, undermining Canada’s unique positioning as a bridge market. That would eliminate the strategic advantage for Chinese firms to operate through Canada.

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Beyond immediate trade impacts is the fear of a developing G2 world. Nagy says he’s concerned the summit and subsequent meetings could further the idea of the U.S. and China setting up a Group of Two as dominant global powers.

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This is the biggest fear for all middle powers, including Canada … and that would mean “we lose our strategic autonomy and have to choose between a China partner or a U.S. partner. That means we follow their rules — that’s not good,” he said.

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If that happens, the question then will turn to whether a country like Canada can find a place within that distribution of power to establish itself as a high-value sector, Werner said.

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Chiu is less concerned by rhetoric about a “G2” and says the real takeaway is that “the U.S. is increasingly seeing China as an equal at a competitive level.” 

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But it “implies a sort of dual hegemony,” Chiu said. “And that’s not the image that China wants to depict itself in.”

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The middle powers, meanwhile, would have to choose, he noted, pointing to both a security and economic element.

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“No matter how badly Canada-U.S. relations deteriorate, Canada is firmly part of the U.S.-led security architecture,” he said.