President Trump’s tariffs and rhetoric have spurred some longtime U.S. allies to diversify their commerce ties away from the U.S. Some are going cap-in-hand to Asian superpowers China and India.
MARY LOUISE KELLY, HOST:
President Trump’s tariffs and rhetoric have spurred some U.S. allies to shift commerce away from america and to spice up commerce with America’s greatest competitor, China. This month, leaders of Canada and the UK each paid high-profile visits to Beijing. These visits drew ire from Washington. We’re joined now by NPR London correspondent Lauren Frayer and NPR worldwide affairs correspondent Jackie Northam, who covers Canada. Hello to you each.
LAUREN FRAYER, BYLINE: Hello there.
JACKIE NORTHAM, BYLINE: Hello.
KELLY: Lauren, you kick us off. British Prime Minister Keir Starmer’s go to to China – what was the aim?
FRAYER: He is thawing relations. I imply, that is the primary journey to China by any U.Okay. prime minister in eight years. Starmer arrived right this moment in Beijing, introduced a planeload of CEOs with him, principally from British banks and tech firms. However he is additionally introduced the top of the Desk Tennis England affiliation and the Royal Shakespeare Firm.
KELLY: Gentle energy.
FRAYER: So a bit of bit of sentimental – precisely, mushy energy, nevertheless it’s principally enterprise. I imply, amid tariffs and commerce wars with the world’s largest economic system – that is America – Starmer’s making an attempt to spice up commerce with the second largest economic system, and that is China. This is what he stated when he landed in Beijing right this moment.
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PRIME MINISTER KEIR STARMER: We’re resolute about being outward-looking, about taking alternatives, constructing relationships, having confidence globally and all the time being completely centered on our nationwide curiosity. And it’s in our nationwide curiosity to have interaction with China.
FRAYER: Now, not everybody in – right here within the U.Okay. really agrees with that. There are questions on China’s human rights file, surveillance, controversy over plans for a giant Chinese language mega-embassy right here in London. Starmer additionally, throughout this journey, could also be kind of trying over his shoulder at President Trump as a result of President Trump typically sees any overtures like this towards China as zero-sum, as presumably threatening or dangerous to the U.S., as Canada’s prime minister not too long ago discovered.
KELLY: Nicely, precisely. Jackie, leap in. We noticed President Trump’s irritation with the prime minister of Canada, Mark Carney, on full show final week at Davos. Trump was scolding him, utilizing his first identify from the lectern. How does Carney’s journey to China this month match into that?
NORTHAM: Oh, look, I imply, you recognize, Carney’s Beijing journey was a giant deal for Canada. You realize, there have been critical tensions between the international locations for a few decade. However the two sides had been in a position to take away commerce limitations on Chinese language electrical automobiles and Canadian canola oil and different agricultural merchandise. Now, initially Trump stated, if Canada can get a cope with China, it ought to do it. However then he reversed that and warned Carney he’d slap 100% tariffs on all Canadian items and merchandise if a commerce cope with China went forward, including that China would eat Canada alive, devour it.
KELLY: Devour it. I imply, may China eat Canada alive?
NORTHAM: Possible not. You realize, look, Carney is a former Goldman Sachs man and was head of the central banks in each Canada and the U.Okay. and certain has no illusions about what he is coping with or what’s concerned in coping with Beijing. However China is Canada’s second largest buying and selling companion, and Carney stated he’ll proceed in search of alternatives with the nation whereas maintaining guardrails across the relationship.
KELLY: I imply, Canada’s economic system is, in fact, closely depending on commerce with the U.S., its neighbor to the south. I do know you have been reporting on Carney’s efforts to diversify that economic system. Inform me extra about what he is doing.
NORTHAM: Positive. Carney’s technique is to create a brand new string of financial and defensive alliances with different center powers – you recognize, just like the U.Okay., Australia, Malaysia – as a result of he is aware of that Trump will use tariffs as financial coercion. Carney laid out this technique in Davos final week at a gathering of the World Financial Discussion board. And bear in mind, Davos was alleged to be all about Trump and his risk to grab Greenland. However Carney’s speech there additionally made world headlines, and in it, he stated that rules-based worldwide order has been ruptured, and that survival for center powers – akin to Canada and such because the U.Okay. – means banding collectively to higher defend themselves in opposition to financial powerhouses. This is Carney right here.
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PRIME MINISTER MARK CARNEY: The center powers should act collectively as a result of if we’re not on the desk, we’re on the menu.
KELLY: Lot of concern, Jackie, about Canada getting eaten, being on the menu. What’s Carney doing about it?
NORTHAM: Nicely, he is – you recognize, he has been on this whirlwind of visits to drum up enterprise for Canada. You realize, lots via Southeast Asia and different components of Asia. And he has secured 12 commerce and safety offers in six months. He is because of head to India in March, after which after that, a raft of different international locations this yr in the hunt for extra offers.
FRAYER: And if I can simply leap in right here, India – world’s most populous nation, one of many fastest-growing economies in client markets – can also be enjoying a very large position on this new multipolar world that Carney spoke about in Davos, you recognize? And yesterday, the EU signed a giant commerce cope with India. They referred to as it the mom of all offers. European Council President Antonio Costa stood in Delhi and spoke in regards to the, quote, “world order being essentially reshaped (ph).” So it isn’t simply China that U.S. allies are taking a look at as they diversify financial and even safety relationships away from Washington.
KELLY: And, Lauren, for the U.Okay. significantly, what’s Prime Minister Starmer doing to keep away from comparable tariff threats from Trump if Britain, say, does a cope with China?
FRAYER: Nicely, Mary Louise, as you recognize – you had been right here masking a few of Trump’s visits to the U.Okay. – he got here twice this previous yr.
KELLY: Yeah.
FRAYER: In a type of, sealed a commerce cope with the UK, and the U.Okay. noticed that as a hit as a result of it exempts some British exports from some U.S. tariffs, or no less than lowers the speed. So the U.Okay. feels protected in some sense from these tariffs. However whereas Carney has kind of declared a rupture of the previous world order, Costa is speaking about, you recognize, the world order being essentially reshaped, Starmer has been far more muted. He practices what some name appeasement with Trump. You realize, they speak on the telephone typically. Trump got here twice to the U.Okay. final yr. Starmer hugs him, smiles, tries to not contradict him, regardless that he does look a bit of uncomfortable generally with a number of the issues that Trump has stated standing subsequent to him.
I spoke to Mujtaba Rahman. He is the managing director for Europe on the Eurasia Group. It is a threat evaluation agency. And he describes how Downing Avenue sees this.
MUJTABA RAHMAN: The bilateral relationship between Trump and Starmer is an effective one, and so, given a number of the different strategic objectives the place the U.Okay. could be very concerned – Ukraine, NATO – I believe there’s a want to retain that affect with the Trump administration. Carney, extra decisive, however I believe Starmer continues to be of the view that there is extra of a steadiness available.
FRAYER: And the query is how lengthy that steadiness is possible, potential and is sensible in British nationwide curiosity.
KELLY: And, Jackie, only a actuality test from you on Canada. The U.S. continues to be Canada’s primary buying and selling companion. We’re listening to from Carney he needs to shift, he needs to diversify. Can he pull it off?
NORTHAM: Nicely, you are proper. I imply, two-way commerce with the U.S. final yr got here in at about $1 trillion, so it’s huge. I spoke with Jamie Tronnes, and he or she’s govt director of the Heart for North American Prosperity and Safety, and that is a Canadian suppose tank. And he or she says it is inconceivable for Canada to make any kind of important dent in changing, you recognize, Canada’s relationship with the U.S. However she says that the nation does have its personal power.
JAMIE TRONNES: One of many issues that I see here’s a technique in Carney’s considering that, as a competitor for brand new funding within the Western Hemisphere, Canada is a steady, pleasant nation that may present certainty, which is precisely what overseas direct traders need to hear.
NORTHAM: And, Mary Louise, Tronnes says the hope is, by the point Trump leaves workplace, these international locations could have gained a steady foothold in Canada for funding.
KELLY: That is NPR worldwide correspondents Jackie Northam and Lauren Frayer. Due to you each.
NORTHAM: Many thanks.
FRAYER: Thanks.
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