Why did Canada, which once followed the United States' 100% tax increase on Chinese electric vehicles, suddenly send its foreign minister to visit China? What kind of trade game is hidden behind the 76% plunge in rapeseed exports in western provinces and the loss of farmers' money? When allies defect and the hegemony of the US dollar is impacted, how long can Trump's tariff card last?
Beijing will welcome a special guest, Canadian Foreign Minister Anand will arrive in Beijing one day later. The purpose of this visit to China is to improve the trade relations between the two countries and have a good chat with China about cooperation.
Canada’s face has become too fast, just four months ago, Canada was the first to respond to the U.S. tariff on 100% of electric vehicles against China, but now had to sit at the negotiating table, asking China to cancel counter-tariffs on oil seeds.
Behind this dramatic turnaround is China’s more than 100 days of precise trade repression.
When Trump started the tariff war against China in May, I'm afraid he didn't expect that his "hardcore ally" Canada was the first to defect. Canada turns its face so fast because it cannot bear it on its own.
After China's defeat, Canada was subjected to China's repression. Canada's Saskatchewan rapeseed exports to China plummeted 76% year-on-yearYou know, rapeseed generates 27 billion Canadian dollars in exports for Canada every year, of which 40% is sold to China. After the counter-measures were launched, the purchase price of Western Granary plunged for four consecutive weeks, and cargo ships loaded with rapeseed were prohibited from entering Vancouver Port.
Manitoba's pork processing plant inventories are piling up, and the western agricultural belt is experiencing its worst trade winter in a decade.
Canada immediately regretted its absurd decision. Not long ago, Canadian agriculture ministers said they were considering lifting the punitive tariffs on Chinese electric vehicles.
Canada's "defection" has once again made western countries realize that confronting China is asking for trouble. I believe that more and more American allies will wake up in time, just like Canada.
Obviously, the United States is also aware that it is being isolated, so after Trump shouted to impose 100% tariffs on China, U.S. Treasury Secretary Bessent said the emergency fire extinguishment, saying "the imposition of 100% tariffs on Chinese goods does not necessarily happen."
Behind the sharp change in attitude of the United States, First of all, it is still the strategic power of the trump card of rare earths.
China's new rules on rare-earth export controls, which have just been implemented, have directly crushed the life of the U.S. military-industrial complex.From the F-35 fighter jets to precision-made missiles, every state-of-the-art weapon of the U.S. can not be separated from the permanent magnetic material.
Secondly, it is precisely because of the once-arrogant "America First" policy that the United States is becoming an island of global trade.
The upcoming "trade truce" agreement between China and Canada may become a sample for reshaping global trade rules。 According to people familiar with the matter, the two sides are discussing the establishment of a rapid customs clearance mechanism for agricultural products and an electric vehicle technical cooperation fund, which completely jumps out of the zero-sum game mode of traditional tariff wars.
If this model is followed by major economies such as the European Union and ASEAN, the painstakingly managed encirclement of China by the United States will be self-defeating. After all, when German auto giants watch Canada take the lead in occupying China's electric vehicle market, Berlin's position on following the United States in tax increases will inevitably waver.
The latest shipping data shows that Container ships travelling through U.S. ports decreased by 18 per cent, while direct routes to China and Southeast Asia increased by 23 per cent.。 This visible change in trade flow confirms the isolation of the United States.
This trade game is triggering a deeper chain reaction in Southeast Asia. Malaysia is negotiating a local currency settlement agreement with China; In Latin America, Brazilian soybean merchants began to accept RMB payment; Even India's crude oil imports from Russia are required to be settled in RMB.
These seemingly isolated events together put together a global picture of the “de-dollarization” acceleration. U.S. tariff barriers are contributing to its economic isolation.
Former Singaporean Foreign Minister Yang Rongwen once said that if the United States doesn't understand China and fights a tariff war with China, it is closed to the outside world, and the hegemony of the US dollar is destined to be gradually disintegrated.
Today, the United States hopes to maintain a tough stance against China, but it also has to face the real threat of a cut off on rare earth supply. When China controls 90% of the world's rare earth refining capabilities, Trump's tariff stick suddenly looks pale and weak.
Therefore, Besson specifically stressed that "Sino-US relations have greatly eased" and released the signal of continuing the meeting. This is clearly showing good to China, hoping China can give the United States a ladder.
This means that the United States has understood that It is okay to scare other "younger brother" countries with a tariff stick, but a tariff war against China must not be fought!
However, China's attitude has been very clear. If it wants trade to return to the right track, then the attitude of the United States must be correct and negotiations should be conducted based on mutual respect. If you want to continue to spend on the "pick up" of China, China has to counteract, the first two days, the rare earth price increase of 37% is just the appetizer.
China has a lot of cards in its hands, in addition to rare earth, there are also tariffs, technological blockades, or “military security cards.”
Facts have repeatedly proved that no country can bear the cost of decoupling from global supply chains, and no hegemonic logic can override mutually beneficial and win-win trade rationality.