Trump’s new ‘Donroe Doctrine’ leaves no room for Carney’s China reset

The tensions in Canada’s position Carney has been explicit about his intentions toward China. At the 2025 APEC summit in South Korea, he met with President Xi for the first formal leader-to-leader contact since 2017, calling it a bilateral turning point. Carney told reporters he aims to diversify Canada’s trade: “Never have all your eggs in one basket. We have too many eggs in the American basket.” He added Canada must “grow others, and the ‘s’ is a capital ‘s’ at the end of others.” More pointedly, Carney told a business audience in Asia that the world of rules-based liberalized trade had ended, and Canada aimed to double its non-U.S. exports over the next decade. He accepted Xi’s invitation for a state visit to China and left the door open to easing investment restrictions, negotiating a free trade deal, and even lifting Canada’s 100 percent tariffs on Chinese electric vehicles imposed in 2024. This makes economic sense from Ottawa’s perspective: China remains the world’s second-largest economy and a crucial market for Canadian resources struggling under Chinese counter-tariffs on canola, pork, and seafood. But the NSS could not be clearer about its expectations. It describes decades of engagement with China as a catastrophic mistake, and vows to “rebalance America’s economic relationship with China.” It explicitly states the need to align with allies “in preventing domination by any single competitor nation.” The strategy goes further, warning America will monitor and resist Chinese “control of military installations, ports, and key infrastructure.” Given Chinese investments in Canadian mining, technology, and infrastructure, this language should set off alarm bells in Ottawa. In recent statements, Carney established what he calls “guardrails” for China relations, suggesting Canada would not pursue deep relationships in areas like artificial intelligence, critical minerals, and defence. But these guardrails may prove inadequate given Washington’s expansive definition of strategic vulnerability. When Carney says he wants a “pragmatic and constructive” relationship with China—addressing “irritants” while maintaining areas of cooperation—he is describing precisely the kind of strategic ambiguity Trump’s NSS rejects. Crucially, the current tariff dispute between Canada and the U.S. must be understood not merely as a trade spat but as part of this broader strategic framework. The NSS embraces tariffs as “powerful tools” with an emphasis on “reducing trade deficits” and “ending dumping and other anti-competitive practices.” Canada’s recent tiny trade surplus with the U.S., however modest compared to China’s, makes us a target under this doctrine. The strategy’s insistence that “America’s current account deficit is unsustainable” suggests that even balanced economic relationships may face pressure to tilt further in America’s favour. The document’s repeated emphasis on “fairness” and ending ally “free-riding” reveals an administration convinced that previous arrangements fundamentally exploited American generosity. Canada’s modest defence spending, currently about 1.4 percent of GDP—well below NATO’s 2 percent target, let alone the new 5 percent “Hague Commitment”—will be leveraged.1Meeting this target would require more than tripling Canada’s defence budget—an increase of over $60 billion annually—in the face of crippling American tariffs that threaten to undermine our fiscal capacity to deliver. The implication is clear: Canada’s access to American markets, technology, and favourable trade treatment will be contingent on dramatically increased defence spending and alignment with U.S. strategic priorities, particularly regarding China.2Trump’s strategy explicitly links defence burden-sharing to economic benefits: “The United States will stand ready to help — potentially through more favourable treatment on commercial matters, technology sharing, and defense procurement — those countries that willingly take more responsibility for security in their neighborhoods and align their export controls with ours.” Difficult strategic choices ahead One area where Canadian and American strategic interests genuinely align is Arctic security.  NORAD modernization, enhanced Arctic surveillance, and northern infrastructure investments could offer tangible proof of Canada’s continental defence commitment. Addressing American security concerns while advancing Canada’s own Arctic sovereignty claims would be a rare win-win in an otherwise challenging environment. Still, Carney faces an impossible strategic triangle: he cannot simultaneously reset relations with China to diversify Canada’s economic partnerships away from the U.S., maintain preferential access to American markets, and resist American pressure to dramatically increase defence spending and align completely with U.S. strategic priorities. The NSS makes explicit that countries must choose “an American-led world of sovereign countries and free economies” or alignment with nations “on the other side of the world.” No middle path is contemplated. Canada’s historical approach—threading the needle between American partnership and independent foreign policy—may no longer be viable under an administration that views strategic ambiguity as betrayal and transactional relationships as the only honest form of alliance. Yet Carney’s statement on the events in Venezuela, which mentioned neither America nor its president, sees him still trying to walk this line. If Trump takes further steps to assert hemispheric influence, like trying to wedge Mexico out of CUSMA negotiations to form a bilateral deal with Canada, Carney may have to pick his battles. Preserving the bilateral relationship while maintaining some degree of Canadian policy independence will necessitate several difficult choices. First, Ottawa must recognize that a reset with China cannot proceed as planned without serious consequences to the U.S. relationship. Chinese investment in strategic sectors will be viewed through a national security lens in Washington. Second, Canada must make a credible commitment to dramatically increased defence spending, with a focus on continental defence capabilities: Arctic surveillance, missile defence, naval expansion, and cyber capabilities—framed not as capitulation to America but investments in Canadian sovereignty. Third, Canada should lean into economic opportunities the NSS explicitly offers: critical minerals development, energy sector partnership, advanced manufacturing, and supply chain integration. These align with both nations’ interests and provide tangible proof of Canadian strategic value. Finally, Ottawa must engage in clear-eyed diplomacy. The days of assuming American patience with allied free-riding are over. The NSS does not explicitly threaten Canada, but neither does it exempt us from its demands. We are implicitly counted among America’s allies expected to align with Washington’s strategic priorities. Carney’s attempt to reset relations with China while navigating a tariff war with the U.S. is not merely politically difficult, it may be strategically impossible under the NSS framework. The question facing Canada is not whether our bilateral partnership with the U.S. will change, but whether we will shape that change through proactive strategic choices or have it imposed upon us through economic coercion. The partnership can be enhanced, but only if Canada accepts the new terms of engagement: concrete contributions to continental defence, alignment on China policy, and recognition that strategic ambiguity is no longer tolerated. The alternative is a relationship defined by tariffs, exclusion from supply chains, and treatment as an unreliable partner. The choice, for now, remains Canada’s to make. But the window for choosing is rapidly closing.