Are U.S. allies pivoting to China for trade deals?

President Donald Trump has backed off on taking Greenland by force. But the threat, and continued tariff whiplash, have made U.S. allies wary and raised doubts about Washington’s reliability.

The strain is especially evident in Canada. At the World Economic Forum in Davos last month, Prime Minister Mark Carney warned of a “rupture in the world order.” His remarks followed repeated jabs by President Trump, who has mused about the possibility of Canada becoming a 51st state, and referred to Carney as a “governor.”

With alliances shaken, Canada and other U.S. allies, may be looking east — to China.

For more, “Marketplace Morning Report” host Sabri Ben-Achour spoke with Chad Bown, senior fellow at the Peterson Institute for International Economics. The following is an edited transcript of their conversation.

Sabri Ben-Achour: So, we have seen this very clear pivot to China from some U.S. allies — high profile visits by Canadian Prime Minister Mark Carney, British PM Keir Starmer. Is this pivot translating into something economically real? Or is it more symbolic?

Chad Bown: I think there definitely is symbolism. I wouldn't say it's economically huge. Especially on the Canadian side, it's an agreement by the Canadians to buy more of what the Chinese are really good at making right now, which is electric vehicles that the United States has essentially said, “we're not going to buy any of those.” So, it is something that's actually quite symbolically important.

Ben-Achour: If Canada does allow a bunch of Chinese electric vehicles in, does that mean anything for the U.S. or U.S. based electric vehicle makers?

Bown: By itself, this is only 49,000 electric vehicles. So, this is not a huge number. But the North American automobile industry is hugely integrated. So, if this were part of a broader sign that Canada is saying, “we need to be more aligned with countries outside of North America,” then that could have potentially really big implications for American-based auto production.

Ben-Achour: Yeah. Is this all in response to politics? The president's comments about Greenland, Canada becoming the 51st state, or are these responses to hard-edged economics?

Bown: I think there's really strong economic arguments here. President Trump, over the last year, has essentially told all of our trading partners and allies that the United States is no longer open to a lot of what they make and want to sell. A lot of these countries, like Canada, are really, really small in an economic sense. They need access to foreign markets to achieve scale in industries like automobiles, to make their companies competitive. And if the United States is no longer open, they're going to need to find alternative markets too. And sometimes that's going to be China or other countries out there.

Ben-Achour: If part of the idea of countries warming up to China is their experience that the U.S. seems less reliable, is China more reliable?

Bown: Absolutely not. And I think many of these countries are now wide-eyed and realized the risks of engaging with China. Even prior to the pandemic, they did acts of economic coercion to countries in Europe — to Brazil — cutting off their exports of significant products for them. But when the United States is extraordinarily busy hitting those other partner countries with tariffs, that doesn't give them any space and opportunity to figure out how to collaborate together on the bigger problem that is China.