The Debate

The US-China Trade War Could Spell Election Defeat for Canada’s Trudeau

The Canadian prime minister might become the most high-profile casualty of U.S.-China frictions.

By Kurt Fifelski for
The US-China Trade War Could Spell Election Defeat for Canada’s Trudeau
Credit: Official White House Photo by Shealah Craighead

The U.S.-China trade war has taken many casualties, but at this point nowhere has this impact been more greatly felt than in Canada. Since arresting and starting the extradition process to the United States of a Huawei executive, Meng Wanzhou, Canada has felt the pain of China’s wrath. Beijing has cut off Canadian canola and meat imports worth billions, sentenced two Canadians to the death penalty for dealing drugs, and detained two more Canadians on charges of endangering national security.

Now with just over three months left until the next national election in Canada, it appears the most notable casualty of the trade war will be Canadian Prime Minister Justin Trudeau.

Trudeau’s Liberal Party has been under immense scrutiny going into the election season because of two botched scandals. In February the Prime Minister’s Office was accused of pressuring the minister of justice and attorney general to shield a Quebec-based construction company, SNC-Lavalin, from prosecution after they bribed officials in the Libyan government of Muammar Gaddafi. Just three months later, when Crown prosecutors dropped their breach of trust case against Admiral Mark Norman, the former second-in-command of Canada’s military and a holdover of the Stephen Harper administration, Conservatives rallied against a seemingly corrupt Trudeau administration.

While these scandals are relatively small in comparison to what Americans are accustomed to, they have been compounded by the botched rollout of many of Trudeau’s marque policies. The refugee resettlement policy that has been praised around the world has been largely a bust in Canada, with 57 percent of Canadians being opposed to accepting more refugees, according to a recent poll conducted by CBC. Trudeau’s carbon tax has been attacked by the left for not being ambitious enough and by the right for being costly. The Trans Mountain Pipeline, which will connect the Alberta oil sands to British Columbia, has only isolated Trudeau from the environmentalists and indigenous groups that helped put him in 24 Sussex Drive in 2015.

Each miscue repelled left-leaning voters away from the Liberal Party to either the New Democrats or the Green Party. Moderate voters began to shift rightward, and the Conservative Party consolidated momentum. While the parliamentary system typically avoids the vote splitting issues that third-party candidates pose to America’s two-party system, they are not immune.

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President Donald Trump’s protectionism has not made this any easier on Trudeau. American tariffs on soft-wood lumber may cost British Columbia thousands of jobs, and tariffs on steel would have decimated Ontario’s economy. Both provinces were critical for the liberals in 2015. To buy time from Trump’s ire, Trudeau has pushed the United States-Mexico-Canada Agreement (USMCA) to demonstrate a willingness to address American concerns.

Just as important to Trump, Trudeau has been on the frontlines of the U.S.-China trade war. When Canada arrested and started the extradition of a Huawei executive the world was made aware of which side of the trade war Ottawa was on. The grounds of the indictment were shaky at best, with Meng being arrested on behalf of the United States because she had allegedly been committing wire fraud to skirt sanctions on Iran. Regardless of the merits of the charges, it was a striking show of Canadian support, as most U.S. allies have equivocated regarding suspending the usage of Huawei components.

Siding with Trump has not come cheap for Canada. In fact, Canadians have paid more of a price than any other country, including America. China lacks asymmetric capabilities to take down the U.S. economy, but that is not the case with regards to Canada. Beijing started by banning imports of Canadian canola worth 2.7 billion Canadian dollars (US$2 billion) per year. Citing forged paperwork, China then banned imports of Canadian meat worth another C$2 billion.

Agriculture has just been the tip of the iceberg. Canadian nationals have been arrested for dealing drugs in China, and at least two have been sentenced to death. While imprisoned these Canadians have lacked access to legal representation and console from Canadian diplomats. In June a Canadian warship in the East China Sea was buzzed by two Chinese fighter jets. The fact that Canada does not have an ambassador in Beijing only exasperates these tensions.

All of these moves are strategic plays from China aimed at getting Canada to capitulate and release Meng. In doing so, they have also reduced what little chance Trudeau had of being the prime minister past October. Since the beginning of summer, Beijing has escalated their attacks on Canada every few weeks, and now Trudeau is starting to feel the heat. By targeting Canadian meat exports, Beijing is disproportionately affecting Quebec, which gave 56 of its 78 seats to the Liberals and the New Democrats in 2015. Additionally, there has been a chorus of calls on Canadian media for the administration to release Meng in hopes that Beijing relents. In hopes of reprieve, Trudeau has pleaded with Trump to take the Canadian case, but little has come of it.

While Trudeau has tried to thread the needle regarding China, his likely replacement from the Conservative Party, Andrew Scheer, is making China a campaign issue. Scheer argues that Canada should take Chinese import bans to the World Trade Organization, ramp up inspections on Chinese imports, and cut funding for the China-led Asian Infrastructure Investment Bank. Taking a page from Trump, Scheer has also advocated putting levies on the C$75 billion of goods Canada imports from China.

While it makes for a great campaign issue, Scheer’s approach could make for poor policy. China has already proven that they can do just fine without Canadian canola and meat, so there is little stopping them from also banning Canadian soy and liquid natural gas, which would devastate the central and western provinces. His best hope is that Trump and Chinese President Xi Jinping will deescalate their trade war. Even then Canada is unlikely to get a reprieve until they release Meng.

Trudeau still has hope to survive the trade war, but his fate hinges on whether the Americans pass the USMCA. Only then can Trudeau avoid the wrath of Trump’s protectionism and release Meng. Doing so will enable Ottawa to negotiate a settlement to regarding the imprisoned Canadians and help Canadian farmers export canola and meat. If Trudeau does not endure, four years of progress and Canada’s middle power status will be put in jeopardy. Being stuck in the middle of a spat between their two largest trading partners has been painful for the Canadians, but not irreversible. That all changes if Canadians are put to death and Canada abdicates its role as a leader on climate change under a Scheer administration.

Kurt Fifelski is the Assistant Director of Debate at the University of Michigan and a Ph.D. student focused on US-Canadian Relations at Wayne State University.