Former Canadian diplomat Michael Kovrig is sounding the alarm about Canada seeking deeper trade ties with China in the face of growing tensions and uncertainty with the U.S., warning the pivot carries significant risks to Canada’s economic security.
Speaking Tuesday at the Future of Business Summit in Ottawa, Kovrig — a longtime China analyst who was arbitrarily detained by Beijing for more than 1,000 days after Canada detained Huawei CFO Meng Wanzhou — said Ottawa’s new China strategy is a “risky play” that will not be viewed kindly by Washington and could threaten trade talks.
He pointed to U.S. Commerce Secretary Howard Lutnick’s criticism last week of Prime Minister Mark Carney’s deal with China, announced early this year, which included importing a limited number of Chinese electric vehicles.
“The basic problem is that China is not a solution to most of our problems with the U.S.,” Kovrig said at the Canadian Chamber of Commerce-hosted event.
“Doing deals with China is perceived in the United States as Canada being an unreliable ally, right? We may see it as trying to have a China card that we can play — you know, ‘Look, I got options over here, I can go to my friends in Beijing.’ That’s not going to go well in Washington.”
Kovrig noted the U.S. still remains Canada’s largest trading partner, representing 75 per cent of Canadian exports. China, by contrast, represents about four per cent of exports.
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The deal with China aims to boost Canadian exports by 50 per cent by 2030.
Kovrig said a key difference between the two countries is that China is currently “in selling mode, not in buying mode,” and is seeking to make international markets reliant on its cheaper exports.
While Canada has only committed to buying up to 49,000 Chinese EVs, Kovrig said Beijing may seek to increase that quota using economic and diplomatic pressure points like it has in the past.
He warned Ottawa not to be driven by “short-term considerations” like consumer demand for less expensive electric vehicles that could lead to “the long-term strategic implications that path dependence can put us on.”
“If you’re living in a small town and you have just a local Main Street with a hardware store and so on, sure, wouldn’t it be nice to have a Walmart move in and offer you all kinds of cheaper homewares and stuff?” Kovrig said.
“That’s going to be great until … they come in with super low prices and bankrupt all your local shops, and then Main Street looks like a dead zone and all that’s left is Walmart, and then there’s no competition and they can ratchet up the prices. Chinese makers will be able to do the same thing, and it will come with the cost of geopolitical leverage that the state can weaponize.”
Kovrig said the export strategy mirrors how China has already made Canadian sectors like canola, pork and seafood “excessively” dependent on the Chinese marketplace, he added.
“If China cuts off that trade, the people in those sectors face an economic catastrophe and come running to Ottawa and are effectively trying to lobby our government to do what the Chinese Communist Party wants it to do,” Kovrig said.
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“That’s a strategic vulnerability for the country.”
Canada’s deal with China included reducing tariffs on Canadian canola seed to 15 per cent and eliminating “anti-discrimination” tariffs on canola meal, lobsters, peas and crabs, while increasing imports of other Canadian agricultural goods.
Kovrig said he doesn’t want to see Canada cut off trade or engagement with China entirely — “it’s not North Korea,” he quipped — but that any agreement needs to be “tightly controlled and restricted, and potentially reversible if we find that it’s being abused.”
“It does mean that we need to think carefully and strategically about how we trade or invest with it,” he said.
Kovrig gave similar warnings in testimony last week to the House of Commons committee on science and research, which is studying the potential implications of Ottawa’s Chinese EV deal.
Several other witnesses at the committee last week and Monday echoed Kovrig, saying the deal risks negotiations seeking to renew the Canada-U.S.-Mexico Agreement on free trade.
The Liberal government has downplayed concerns about the deal and the overall efforts to normalize relations with China.
Finance Minister François-Philippe Champagne said earlier this month after travelling to Beijing to meet with Chinese counterparts that Canada wants to resolve trade irritants between the two countries in order to expand the trading relationship.
“Our trading relationship is around $120 billion. If you look at the size of the Canadian economy and the size of the Chinese economy, it should be much higher than that,” Champagne said.
“We will need to continue to push to remove these trade irritants so that the broader vision of increasing the trade between our two countries is accomplished.”
—With files from The Canadian Press
They execute pedophiles in China.
Thinking Canadians already know this, unfortunately too many are blinded by their hate for the US. They’d gladly cut off their nose to spite their face.
I don’t consider 49K+ EVs/year as a limited number. Wouldn’t be surprised if many of them end up in landfills.
What’s the difference between deeper ties with the US or with China? Both are pretty much becoming the same – a single dictator in charge who threatens and imprisons those who question it’s authority, who try to dictate terms militarily & economically. China may claim to be a communist country but it’s not, it’s a dictatorship masquerading as one and the US is moving from a Republic to a dictatorship masquerading as one. BOTH will try to dictate who Canada can and cannot trade with (actually one is doing so openly and they used to be considered our preferred trading partner and now they are jealous that we found another potentially toxic relationship other than them).
Getting ‘into bed’ economically with china is a dangerous level of stupidity that only the liberals would contemplate. With the USA, eventually the Donald will be gone. But China will still be communist, and still be taking more and more control of Canada.
In the 1972 movie, The Godfather, Sonny disclosed his opinion that was counter to his father’s about getting into the drug business. That error in negotiations led to all kinds of trouble for Sonny’s family. Keeping your mouth shut and showing a united front aren’t new tactics in negotiating. Please Mr. Kovrig, watch the movie, and think again about your answers.
Spoken from a guy with a gov. supplied 7 figure bank account. why not jump all over CHEAP chinese goods?..including their cars…as many as it takes. Tired of high schoolers building stuff here at engineer wages then having to pay for it… its why the new generation live in parents basements till 30
Someone seriously wondered what Kovrig would think?
Trump is so stupid, he should know that Canada is entitled to a huge trade deficit with the USA and we don’t care if every other country made a deal, we don’t have to because we have China.
So what if we violated CUSMA with retaliatory tariffs and banned their alcohol and spent millions on tv commercials, they deserve it. Trump has made all the prices of everything go up for the last 5 years and now he is holding the oil prices hostage while he invades other countries democracy with his illegal war.
Kovrig should just shut up.
During the hostage taking crisis, China didn’t randomly pick Kovrig, they had been watching him for long time. Now as his undercover was blown, he turned anti-China speaker.
Harry bal you take 1st place for dumbest comment of the week. It’s idiots like you that got us in this spot. You got blinders on dude like most libs.
The old adage “If you repeat a lie often enough, people will believe it.” applies to Carney in the way he keeps gaslighting Canadians into thinking he is actually doing something when in fact he has achieved almost nothing since becoming PM of Canada. The low information and TDS filled Canadians will believe him but anyone who still has the ability to actually thing and who does their research knows he is the ultimate con man.
In 2023 Canada exported $476 BILLION in US dollars to the USA. Carney is whooping up his 20 “deals” only 4 of which are actual trade deals and with countries like Indonesia which he touts and which is a pittance at a mere $173 Million US. He transfers more to his own offshore accounts than that.
He touts being Canadian and supporting Canada but his wife works and lives in the USA along with his kids and he transferred many of his Brookfield operations out of Canada to the USA. He is conning Canadians again and again and they keep falling for it. What a bunch of Elbozos.
This is the guy who sued the Canadian government for $5 million, even though he was actually doing spy work in China under diplomatic cover.
Kovrg is bang on!
@Larry Reynolds
Oh boy the ignorance of willful blindness. China is about SELLING .. China is not about buying !!! Our trade with China is less than 5% of our total trade and even IF we are able to double that, which is extremely doubtful, it would only be 10% max. Whereas our trade with the USA, a buying market, is over 75% of our trade. THAT is NEVER going to diminish because, unlike China and other offshore markets, the USA is easy for Canada to ship our products to. Give your head a shake and think in actual reality not the rhetoric and lies we hear from the Carney Liberals. We have it good having connected landmass with both the USA and Mexico why would we want to screw that access up. Trump will be gone in a couple of years any decision we make about our US market will be with us forever.
Kovrig sounds like Lutnick’s lackey. So what if Canada irritates the US? The US is acting unreasonably and unreliably with no end in sight. Looking for alternatives (such as China) is a great idea.
Okay Comrade Harry.
China is a large communist dictatorship and one of the most authoritarian countries in the world.
Kovrig obviously has it out for China, after being detained there. Understandable. Putting all our eggs in 1 basket is not wise, whether it be US or China. We need to diversify our exports – which means selling to the world.
Brain washed much? MK seems to be living in a time warp of days gone by.
1.The U.S. has become more of a threat to Canada than China will ever be.
2.The U.S. will continue to purchase Canadian products and in more than a few instances has no choice.
3.Canada’s economic diversification under PM Carney has been world changing to the positive.
4.The only deal made to date is that of rescuing our canola, pork and seafood exports to China which was of significant importance to Canada which at the same time forced us to find new customers in the market place. Win/win.
5.Chinese EV’s will be a boon to Canadians in so many ways some of those being in affordability, environmental, and a break away from dependence on fossil fuels and their providers. Renewables are the way of the future.
6. CUSMA is not a risk. A deal is struck or it is not. The U.S. National Security is very clear in it’s intentions and is not pro CUSMA to say the least.
7. Mom & Pops are long gone and the robots are coming. Just the way of the world. Plan accordingly.
Don’t believe the Trump rhetoric about China stopping us from playing hockey!
Kovrig had to spend almost 3 years in a Chinese prison because of Trudeau and the Liberals total incompetence in the Meng Wenzhou case
@JV.
Foolish comments. China is a massive national security risk. Don’t trade a small problems a create an even bigger problem.
@Marc. Canada is the USAs biggest trading partner. Facts matter.
Really? That’s why China is USA biggest trading partner.
JV loves Communism and Gladu has no idea how the political system works.
This is why Canada has a Liberal Majority
Shut up you f**king clown. Yeah former Canadian diplomat for a reason. The only significant risk to Canada’s economic security is the USA
How many millions did Kovrig get paid for being an incompetent intelligence officer?
Kovrig is absolutely correct in his assessment of the relationship Carney is creating with China. The only thing China and the CCP want is more influence and ultimately more control over Canada. The CCP China relationship that Carney is nurturing will be a catastrophic disaster for Canada and Canadians. China is insidious and Carney knows that yet still goes ahead with his agenda to destroy our economic wellbeing.
@Gladue. Terms are 4 years, not 5 and Carney already has 1 under his belt. Lol
Apparently Carney just recently had a Fundraising Event and many CCP members attended.
@ Mark: Why not move? We voted Carney in for five years. You are full of hooey. Move.
Both Justin and me admire basic dictatorships like China and Iran.
He has no chip on his shoulder. lol
Nuke the world
Following their release in September 2021, allegations emerged in 2023 that Spavor accused Kovrig of using him for intelligence-gathering for Canada, which Global Affairs Canada denied. Spavor subsequently reached a settlement with the Canadian government in March 2024.
Global Affairs Canada denies it but Canadian government reaches a settlement?
Was Kovrig a spy?
It has become glaringly obvious that a rogue president can destroy international relationships and the US lacks the checks and balances to prevent it. It is not a one country solution but a multi country multi trading partner solution. Relying on a single dominant partner has proven to be a mistake.
I hate to say this but NO DUH what is out government thinking?! -_-