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Canada, other allies to rethink U.S. trade ties amid Trump's tariff tactic: Canadian expert

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Canada, other allies to rethink U.S. trade ties amid Trump's tariff tactic: Canadian expert

2025-02-06 21:11 Last Updated At:21:57

U.S. President Donald Trump's escalating trade tactics are forcing Canada to reconsider economic ties with its neighbor, warned a Japan-based Canadian international affairs expert.

Since taking office, Trump has introduced aggressive tariff policies that have strained relations with Canada, one of the United States' closest allies, announcing a 25 percent additional tariff on Canadian exports earlier this week before agreeing to delay their imposition for 30 days.

In an interview with China Global Television Network (CGTN), Benoit Hardy-Chartrand, a Canadian professor at the Temple University Japan Campus in Tokyo, emphasized that the move may have already had unintended consequences.

"(He) has done something that nobody else was able to do in Canada for years, which is to unite the whole political class of Canada. We've seen the whole political class in Canada united against Trump. So that's quite an achievement by the American President. Canada is one of the United States' closest allies, if not the closest ally. Diplomacy runs on trust, it runs on mutual feelings of benevolence. And that's not what we have seen from the Trump administration so," said Hardy-Chartrand.

"Now, his repeated threats to annex Canada have been just another baffling change or aspect of his new policies. And that is, again, what is causing a lot of anxiety in Canada because they (the U.S.) are our biggest trading partner, they are extremely important to our prosperity, and now that we have a leader like this, there's a lot of uncertainty ahead for the next four years," added the professor.

He stressed that Canada and other countries are now accelerating efforts to diversify their trade partnerships, recognizing that over-reliance on the U.S. may not be worth the risk.

"I think indeed this is going to provide further impetus for countries around the world, especially countries that have longstanding trading partnerships with the United States to try to hedge their bets a little more and diversify their trading partners. We are seeing that in Canada. For a few years, Canadians, Canadian officials have talked about diversifying our trade partners. Right now about 70 percent of Canada's trade goes to the United States. So we're trying to bring that number a little bit further down," he said.

According to the scholar, other U.S. allies like Japan and South Korea are closely watching the U.S.' treatment of Canada and questioning if they too might face similar economic pressure.

"These two countries are looking at the current situation and wondering: If Canada, if even a close ally of the United States is treated as such, that is quite likely that we - South Korea and Japan - are going to be treated as such as well," he said.

The shift could significantly impact global trade, he added, noting that Trump's tactics are contributing to an already fractured global trading system, with long-standing supply chains potentially being reconfigured.

"That might indeed further lead to changes in supply chains, in reconfigurations of different trade partnerships, in trade blocks around the world. And already, of course, as we all know, over the last few years, we've seen an increasing fracturing of the world," said the professor.

"What's going to happen over the next four years may simply add to that global trade instability and reconfiguration of partnerships that we have already been seeing for four years," he said.

Canada, other allies to rethink U.S. trade ties amid Trump's tariff tactic: Canadian expert

Canada, other allies to rethink U.S. trade ties amid Trump's tariff tactic: Canadian expert

China on Tuesday unveiled a set of measures to unlock the consumption potential of counties and smaller cities, tapping the vast lower-tier markets as a new source of domestic demand and economic growth.

The government calls for upgrading consumption channels in counties, including renovating township commercial centers, rural markets and local fairs, encourages domestic and international brands to open regional debut stores, and promotes the redevelopment of existing land resources to improve services, according to a guideline jointly issued by the Ministry of Commerce and other authorities.

The guideline also urges better services that cater to the elderly and children, more efficient urban-rural distribution networks, and stronger county-level employment, as well as more channels for residents to increase their incomes.

The measures come as China seeks to give consumption a bigger role in driving economic growth.

The lower-tier markets, generally referring to third-tier and smaller cities, counties, townships and rural areas, account for about 70 percent of China's population and 60 percent of total retail sales of consumer goods. These markets have emerged as a key link between urban and rural economies and an important part of the domestic economic cycle.

The lower-tier markets have diverse needs across different levels, said Shen Bing, a researcher at an institute under the National Development and Reform Commission (NDRC), noting that this diversity can provide broad room for businesses to develop new service models while creating new momentum for consumption.

Official data showed that retail sales of consumer goods in rural areas rose 2.4 percent year on year in the first seven months of 2026, 1.3 percentage points faster than in urban areas. County-and township-level retail sales were estimated to account for nearly 40 percent of the country's total.

China's 2,800-plus county-level administrative divisions form a vast and diverse domestic market, said Chen Xi, a researcher with the NDRC, noting that consumption upgrade is gradually extending from major cities to county-level markets, providing an endogenous source of consumption growth.

China moves to unlock county-level consumption, energize domestic demand

China moves to unlock county-level consumption, energize domestic demand

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