Article content continued

Unlike George W. Bush or Barack Obama, Donald Trump recognized that WTO membership and other trade accommodations enabled China to hollow out America’s manufacturing heartland. While Chinese trade provided U.S. consumers lower prices, the Chinese government was less forthcoming in dismantling barriers to trade and foreign investment. China required foreign companies to share ownership and technology to gain access to its own market. And it is has been accused of stealing Western intellectual property.

It is therefore not surprising that both sides of the U.S. Congress support Trump’s position to undo these unfair trade advantages and ensure U.S. security. Whether it is reducing access to U.S. technology, retaliatory trade tariffs or calling upon the WTO to delist China as a developing economy, the aim is to weaken the new rival.

Photo by AFP / Getty file photo

A good example of this decoupling is Huawei, China’s successful global technology company. The company has announced this week that its share of China’s smartphone market has doubled to 38 per cent since 2017 on “patriotic” purchases while sales have declined elsewhere, including Europe and the Middle East. The U.S. is now banning Huawei from supplying 5G technology for national security reasons and may restrict Google’s export licences to Huawei after Aug. 19, when the current export licence expires.

For Canada and other third parties, the China-U.S. decoupling will require a detailed review of our economic and foreign policies. Just a short while ago, Canada’s mandarins were developing trade and/or investment agreements with China. Canada agreed to fund the China-led Asian Infrastructure Investment Bank in 2018 with $256 million donation (the U.S. has refused to participate in the AIIB). It has so far allowed Huawei to participate in developing technology in Canada. However, with the December 2018 detention of Huawei CFO Meng Wanzhou, China has retaliated with bans on Canadian canola, pork and beef. China also arrested two Canadians on spying charges. China-Canadian trade discussions are now dead in the water.

Canada has done relatively little so far to retaliate against China, perhaps fearing a loss of other trade. This is a mistake in the face of recent Chinese hostility towards us. Even a small action, such as suspending our pledge to the AIIB, has not taken place.

Jack Mintz is the president’s fellow at the University of Calgary’s School of Public Policy.