Canada's Prime Minister Mark Carney with China's President Xi Jinping. Photo Credit: @MarkJCarney, X
August 25, 2026
By Dr. Shehab Al-Makahleh
Key Takeaways:
Canada is pursuing a managed economic reset with China—marked by Carney’s January 2026 Beijing visit, restored agricultural market access, and a possible Xi visit in September—primarily to reduce its vulnerability to U.S. trade pressure rather than to realign geopolitically away from Washington.
The timing is unusually consequential: Xi’s potential September visit would occur weeks before Alberta’s October 19 referendum on greater provincial autonomy and roughly six weeks before the U.S. midterms, raising the risk that Canada’s China policy becomes entangled in both domestic federal-provincial tensions and American electoral politics.
The strategic challenge for Ottawa is diversification without dependency or confrontation: expand commercial ties with China while preserving national-security safeguards and the core security-economic partnership with the United States, recognizing that excessive American pressure could make Canadian diversification toward China more permanent.
Canada–China relations are entering a potentially transformative phase at precisely the moment when the North American political and economic order is under unusual pressure. Prime Minister Mark Carney’s January 2026 visit to Beijing initiated what Ottawa described as a new strategic partnership with China, while Beijing has restored important market access for Canadian agricultural exports and both governments have begun rebuilding economic and diplomatic channels that deteriorated sharply after 2018. On the other hand, Canada’s relationship with the United States has entered a period of significant trade friction, creating an incentive for Ottawa to diversify its economic relationships. Against this background, Chinese President Xi Jinping is paying a visit to Canada in September 2026, potentially linked to his expected trip to the United States. The possibility of such a visit is not yet equivalent to a formally confirmed state visit, but its potential timing is strategically important because it would occur only weeks before Alberta’s October 19th referendum and roughly six weeks before the November 3rd U.S. midterm elections.
The convergence of these events could produce an unusually consequential period for North American geopolitics. Xi’s possible September visit would test the limits of Canada’s economic and diplomatic reset with China; Alberta’s referendum could expose deeper tensions between Ottawa and the provinces over federalism, resources and national sovereignty; and the U.S. midterms could turn Canada’s China policy into an issue in American domestic politics. The result could be a three-sided strategic problem for Ottawa: how to deepen economic relations with China without provoking an unacceptable American response, how to maintain national unity while pursuing a more diversified foreign economic policy, and how to preserve the United States as Canada’s principal security and economic partner without allowing Canada to remain excessively dependent on a single market.
The emerging Canadian approach should therefore not be interpreted simply as a geopolitical shift from Washington toward Beijing. It is better understood as an attempt to create strategic room for manoeuvre. Canada is seeking alternatives because its overwhelming economic dependence on the United States has increasingly become a source of vulnerability. China, meanwhile, sees an opportunity to strengthen its position in a G7 country that has traditionally been closely aligned with Washington. For the United States, the central danger is not that Canada will suddenly become a Chinese ally. It is that continued American economic pressure could gradually make Canadian diversification toward China and other Asian markets politically and economically irreversible.
The Canada–China Reset
The foundations of the current reset were laid during Prime Minister Mark Carney’s January 2026 visit to China, the first visit by a Canadian prime minister since 2017. Carney met Xi Jinping and senior Chinese officials and announced a series of agreements designed to rebuild economic relations. The Canadian government characterized the outcome as a new strategic partnership and emphasized cooperation in trade, energy, agriculture, culture, tourism and other areas.
The economic component is particularly significant. Canada and China agreed to reduce several trade barriers, including measures affecting Canadian agricultural exports. Ottawa announced that China would reduce the combined tariff rate on Canadian canola seed from approximately 85 percent to about 15 percent and that Canadian canola meal, lobsters, crabs and peas would no longer face certain anti-discrimination tariffs beginning March 1, 2026. The Canadian government described China as a roughly C$4 billion market for Canadian canola seed, making the agreement particularly important for Western Canadian agriculture.
The significance of the reset goes beyond individual commodities. Canada is attempting to reduce its vulnerability to American trade policy by expanding alternative markets. The logic is straightforward: the more Canadian exporters can sell into China, Europe, India and other markets, the less exposed Canada becomes to unilateral changes in U.S. trade policy.
This is especially important given the deterioration in U.S.–Canada trade relations during 2026. Recent tariff disputes have demonstrated that even Canada’s closest economic relationship can become politically unstable. Chinese state-linked commentary has openly celebrated the dispute, portraying Canadian retaliation against Washington as evidence that American economic pressure is encouraging traditional U.S. allies to seek greater autonomy. China therefore has a strong strategic incentive to make its market more attractive to Canadian exporters at the precise moment when Ottawa is searching for alternatives.
Xi Jinping’s Possible September Visit
Reports that Xi Jinping may visit Canada during a September North American trip introduce another dimension to the relationship. Xi is considering adding Canada to a trip that would include the United States. If confirmed, it would represent the first visit by a Chinese head of state to Canada in approximately 16 years. The timing would be highly significant.
A Xi visit would give Beijing an opportunity to demonstrate that China is capable of maintaining productive relations with a major U.S. ally despite the broader strategic rivalry between Beijing and Washington. For Ottawa, it would provide an opportunity to demonstrate that Canadian foreign policy is becoming more diversified without formally abandoning the transatlantic and North American security architecture. The optics would therefore matter almost as much as the agreements.
Beijing would probably emphasize economic cooperation, agriculture, energy, clean technology, education, tourism and multilateralism. Ottawa would likely stress Canada’s independent foreign policy and the economic advantages of diversification. Neither side would have an interest in portraying the meeting as an anti-American alignment. Nevertheless, Washington would examine the visit closely.
If Xi were to arrive in Canada shortly before the U.S. midterm elections, American political actors could interpret the event through an electoral lens. Critics of the Canadian government could argue that Ottawa is exploiting tensions with Washington to move closer to Beijing. Conversely, Canadian officials could argue that the visit demonstrates precisely why Canada needs a diversified foreign policy: economic security requires more than dependence on a single partner. This could make the visit one of the most politically sensitive Canada–China diplomatic events in decades.
Why Washington Should Be Concerned
The United States has enormous structural advantages in its relationship with Canada. Geography, energy infrastructure, integrated manufacturing, defence cooperation and supply chains make a fundamental Canadian economic pivot away from the United States extremely difficult. Yet, those structural advantages do not guarantee political loyalty. On the other hand, Canada’s current diversification strategy is partly a response to the realization that economic interdependence can also create vulnerability. Carney’s January China visit highlighted the connection between Canada’s deteriorating relationship with Washington and Ottawa’s effort to rebuild economic ties with Beijing. This is conducive to an important strategic paradox. Washington may believe that economic pressure will force Canada to make concessions. Ottawa may instead conclude that American pressure makes diversification necessary. The difference between these two interpretations could shape North American politics for years.
The United States is also likely to pay particular attention to areas where Canadian and Chinese economic interests intersect with American national security. These include artificial intelligence, electric vehicles, batteries, telecommunications, data infrastructure, critical minerals, ports and advanced manufacturing. China’s role in global supply chains means that commercial agreements can have strategic implications even when they are not explicitly military. Canada’s challenge will be to distinguish legitimate commercial engagement from strategic dependency.
Ottawa itself recognizes this problem. Canadian government assessments continue to identify concerns involving Chinese economic coercion, cyber activity, foreign interference, intellectual-property issues and non-market practices. The reset with Beijing therefore does not mean that Canada has abandoned its security concerns. Instead, Ottawa appears to be pursuing what could be described as “managed engagement”: expand economic cooperation while maintaining national-security safeguards. As a result, this approach will be closely watched in Washington.
The Alberta Referendum: A Domestic Constraint on Canadian Foreign Policy
The Alberta referendum introduces an internal Canadian variable that could complicate Ottawa’s China strategy. Importantly, the referendum is scheduled for October 19, 2026, rather than November. Elections Alberta confirms the referendum process, while the Alberta government has published the questions and supporting information surrounding the vote. The referendum should not be understood simply as an immediate vote on independence. The separation question is structured around whether the Alberta government should begin the constitutional process required for a future referendum on separation. The October vote therefore does not itself make Alberta an independent country. Nevertheless, the political consequences could be substantial.
Alberta is central to Canada’s energy economy and has particularly strong economic ties with the United States. Its oil, gas, agriculture and petrochemical sectors depend heavily on North American markets. At the same time, Alberta has an increasingly strong political interest in expanding access to Asian markets and increasing the province’s control over economic decisions. This produces a potential contradiction.
Ottawa’s China strategy could create new markets for Alberta’s agricultural and resource sectors, but Alberta’s political leadership may resist federal control over the international economic policies affecting those industries. A stronger autonomy movement could therefore complicate Canada’s ability to formulate a unified China strategy.
The referendum’s broader questions also concern provincial powers and the relationship between Alberta and the federal government. Elections Alberta confirms that the referendum process involves questions relating to provincial–federal relations and constitutional issues. If the referendum produces a strong mandate for greater provincial autonomy, Ottawa could face greater pressure to negotiate with Alberta over energy infrastructure, immigration, taxation, natural resources and federal programs. This matters internationally because foreign economic policy increasingly intersects with provincial jurisdiction.
China does not need Alberta to become independent to benefit from stronger provincial autonomy. A Canada in which provinces exercise greater influence over resources and economic policy could potentially provide Beijing with multiple channels for commercial engagement. Washington would likely see the same development differently. For the United States, Alberta’s political autonomy could strengthen an energy-rich region that is deeply integrated with the American economy. But it could also complicate Canada’s ability to coordinate North American energy and trade policy.
The Critical Minerals and Energy Dimension
Critical minerals could eventually become the most sensitive area of Canada–China relations. Canada has significant mineral resources, while China possesses enormous processing and manufacturing capacity. The combination is economically attractive but strategically complicated. Canadian policymakers want foreign capital and industrial development, while Washington increasingly wants North American supply chains that reduce Chinese dependence. This creates a triangular competition.
Canada wants to become a critical-minerals and clean-energy power. China wants secure access to resources and new markets. The United States wants Canada to develop those resources primarily within trusted North American supply chains. The same tension applies to electric vehicles and batteries. Canada has already moved toward greater access for Chinese electric vehicles as part of the broader Canada–China economic reset. The January agreement included arrangements concerning Chinese EV imports into Canada, while Ottawa simultaneously seeks to develop its own clean-technology manufacturing base.
From Beijing’s perspective, the Canadian market represents an opportunity to expand commercial influence in North America. From Washington’s perspective, Chinese vehicles and components entering Canada could create concerns about supply chains, data, industrial competitiveness and the possibility of Chinese firms establishing a larger North American manufacturing footprint. Thus, the EV issue could become much more politically important than the size of the Canadian market alone would suggest.
The U.S. Midterm Elections and Canada
The November 3, 2026 U.S. midterm elections provide the final piece of the political calendar. All 435 voting seats in the House of Representatives and 35 Senate seats are scheduled to be contested. Canada is unlikely to be a central issue in the American elections, but Canada–China relations could become politically relevant through broader debates over China, tariffs, manufacturing, energy and trade. A Xi visit to Canada in September would occur less than two months before Election Day.
That timing would create opportunities for political messaging in the United States. Candidates could argue that Canada is moving closer to China at the same time that Washington is trying to protect American industries and supply chains. Canadian economic agreements with China could therefore be incorporated into a larger narrative about Chinese competition. The danger for Ottawa is that a policy designed primarily for Canadian economic diversification could become an American electoral issue.
The danger for Washington is the opposite: excessive pressure on Canada could accelerate exactly the diversification that American policymakers are trying to prevent. This is the central strategic paradox. If Washington makes Canadian access to the American market more uncertain, Canadian policymakers have greater incentives to seek Chinese, European, Indian and Asian alternatives. If Washington instead offers predictable access and deeper North American investment opportunities, Ottawa will have less reason to move aggressively toward Beijing. The American midterm elections could therefore influence not only U.S. domestic politics but also the future direction of Canada–China relations.
Three Possible Scenarios
The first scenario is a managed Canada–China rapprochement. Xi visits Canada in September, Ottawa and Beijing announce additional economic agreements, and the relationship develops primarily around agriculture, energy, tourism, education and trade. Canada maintains strict national-security screening while avoiding major Chinese involvement in strategically sensitive infrastructure. Washington expresses concern but ultimately accepts that Canada has legitimate diversification objectives.
The second scenario is strategic confrontation between Washington and Ottawa. Xi’s visit produces major agreements involving EVs, critical minerals or Chinese investment. American policymakers interpret these agreements as evidence that Canada is moving toward Beijing. The issue becomes politically salient during the U.S. midterm campaign, and Washington responds with additional trade or investment restrictions. Canada then accelerates its diversification strategy.
The third scenario is Canadian internal fragmentation. The Alberta referendum produces a strong mandate for greater provincial autonomy, while other provinces demand additional powers or challenge Ottawa’s approach to foreign investment and resources. Ottawa’s ability to implement a unified China policy becomes more difficult. China could benefit from new commercial opportunities, but Canadian political fragmentation would make major strategic initiatives harder to execute.
The most likely outcome is a combination of the first two scenarios: deeper economic relations between Canada and China accompanied by persistent and increasingly strategic American concern. Ottawa is unlikely to abandon its long-standing economic, defence and security relationship with Washington, but neither is it likely to reverse the diversification strategy that has emerged in response to growing uncertainty in U.S.–Canada trade relations. Canada will probably continue expanding access to Chinese markets for agricultural products, energy, critical minerals, clean technology and other exports while simultaneously maintaining national-security safeguards around Chinese investment in sensitive sectors.
This approach would allow Ottawa to argue that its engagement with Beijing is driven primarily by economic necessity and the pursuit of greater resilience rather than by a geopolitical decision to align with China. Nevertheless, Washington is likely to remain increasingly attentive to the scale and nature of Canadian–Chinese cooperation, particularly if Chinese companies gain a larger presence in electric vehicles, batteries, artificial intelligence, telecommunications, critical-mineral processing or strategic infrastructure. The issue could become especially sensitive if Xi Jinping’s expected September visit produces new investment or trade agreements immediately before the U.S. midterm elections, when China-related economic and national-security issues are likely to receive heightened political attention in Washington.
At the same time, the emerging relationship is unlikely to develop without limits. Canada has significant economic incentives to engage China, but Ottawa is also aware that excessive dependence on Beijing could simply replace one form of vulnerability with another. The Canadian government therefore has an interest in maintaining multiple economic options, including the United States, the European Union, India, Japan, South Korea and other Indo-Pacific markets. This would allow Canada to pursue what might be described as strategic diversification without strategic alignment. In this model, China becomes an important economic partner but not Canada’s principal security partner or political patron. Such a strategy would give Ottawa greater bargaining power with Washington while also providing Beijing with incentives to maintain constructive relations with Canada. The resulting equilibrium, however, would be inherently fragile. Any major Chinese investment in a strategically sensitive Canadian sector, any significant deterioration in U.S.–China relations, or any new dispute between Ottawa and Washington could rapidly transform economic cooperation into a national-security controversy.
The Alberta referendum could further complicate this trajectory. If the October 19 vote produces a strong mandate for greater provincial autonomy, the federal government could face additional pressure from Alberta over energy policy, natural resources, taxation, infrastructure and international economic relations. Alberta’s enormous energy and agricultural potential make it particularly relevant to Canada’s diversification strategy, but its economy is also deeply integrated with the United States.
A stronger Alberta autonomy movement could therefore create competing pressures: Ottawa may seek greater access to Asian and Chinese markets, while Alberta may simultaneously demand greater control over the resources that would make such diversification possible. China could see opportunities in this environment, particularly through energy, agriculture and critical-mineral cooperation, while Washington could seek to reinforce its economic relationship with Alberta and the broader Canadian energy sector. Consequently, the Canada–China relationship cannot be viewed solely through the lens of federal diplomacy. It is increasingly connected to Canada’s internal constitutional politics and the competing economic interests of Ottawa, Alberta and other provinces.
For Washington, the strategic challenge will be to determine whether Canadian diversification represents a manageable economic adjustment or the beginning of a broader geopolitical shift. The United States possesses enormous structural advantages in its relationship with Canada, including geographic proximity, integrated supply chains, defence cooperation, energy infrastructure and financial interdependence. These advantages make a wholesale Canadian pivot toward China extremely unlikely. However, Washington should not assume that these structural relationships automatically guarantee Canadian political alignment on every economic issue.
If American trade pressure becomes sufficiently unpredictable or punitive, Canadian policymakers may increasingly view diversification as a matter of national economic security rather than simply a commercial preference. In that circumstance, Chinese engagement could acquire a strategic dimension even if neither Ottawa nor Beijing initially intended it to do so. The paradox is that the more Washington attempts to prevent Canada from diversifying through economic pressure, the stronger the political argument inside Canada for diversification may become. The central question for the United States, therefore, will be whether it can preserve Canada’s deep integration with North America through incentives, investment and predictable economic relations rather than through pressure alone.
What Canada Should Avoid
Ottawa’s greatest strategic challenge will be avoiding the false choice between Washington and Beijing. Canada does not need to choose China over the United States. Nor can Canada realistically replace the United States as its principal economic and security partner. Instead, Ottawa should pursue a policy of strategic diversification without strategic alignment.
That means expanding Canadian exports to China while maintaining strict screening of Chinese investments in critical infrastructure and sensitive technologies. It means selling more agricultural products to China while preventing excessive dependence on Chinese markets. It means attracting investment from multiple countries rather than replacing American dependence with Chinese dependence. The objective should be resilience rather than realignment. This approach would also give Canada greater credibility in Washington. If Ottawa can demonstrate that its China policy is primarily about market diversification rather than geopolitical alignment, American concerns become easier to manage.
What Washington Should Do
The United States should recognize that Canada’s diversification strategy is partly a consequence of American policy. Washington retains extraordinary leverage because of geography and economic integration. But leverage is most effective when it is used to create incentives rather than resentment. The United States should therefore consider a more positive North American economic strategy based on predictable market access, joint critical-mineral development, coordinated energy infrastructure, advanced manufacturing and research partnerships. The strategic objective should be to make North American integration more attractive than Chinese alternatives. Washington should also avoid forcing Canada into an explicit choice between the United States and China. Such an approach could unintentionally strengthen the argument inside Canada that Ottawa requires greater strategic independence. China would welcome that outcome.
The coming months could mark a critical turning point in Canada’s relationship with both China and the United States. Xi Jinping’s possible September visit would symbolize the rehabilitation of Canada–China relations after years of diplomatic tension. Carney’s January visit to Beijing has already established the foundations of a new strategic partnership, including renewed agricultural market access and broader economic cooperation. The Alberta referendum on October 19 could then reveal how much domestic support exists for greater provincial autonomy and potentially complicate Ottawa’s ability to pursue a unified national economic strategy.
Finally, the U.S. midterm elections on November 3 will provide the political backdrop against which Washington evaluates Canada’s evolving relationship with Beijing. The significance of these events lies in their convergence. China sees an opportunity to deepen its economic presence in Canada. Canada sees an opportunity to reduce its vulnerability to U.S. trade pressure. Alberta is challenging aspects of the federal-provincial balance. Washington is approaching an election in which China, trade and economic security will remain politically important. The most consequential question is therefore not whether Canada will choose China over the United States. It is whether Canada can successfully diversify without creating a new strategic dependency.
For Beijing, the ideal outcome is a Canada that remains formally aligned with Washington but becomes increasingly economically independent of it. For Ottawa, the ideal outcome is a Canada capable of trading with China while maintaining its core security relationship with the United States. For Washington, the ideal outcome is a Canada that remains deeply integrated with North America without feeling compelled to seek alternatives. The coming months will determine which of these visions comes closest to reality. The strategic lesson is clear: Canada is not necessarily moving from Washington to Beijing; it is attempting to move from dependence toward diversification. The United States should recognize that distinction before economic pressure turns diversification into strategic realignment.
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About Dr. Shehab Al-Makahleh
Dr. Shehab Al-Makahleh is a senior political advisor for a number of countries and president of Canada-based Geostrategic Media Center and director of the Jordan-based Middle East Institute. Al-Makahleh is a non-resident fellow at a number of British, American and Middle Eastern think-tanks. He has contributed many policy papers and op-eds to many international think-tanks in different languages. He has been a keynote speaker at world political, security and military conferences. Al-Makahleh has published 10 books on political and economic developments and world leadership. He is the author of Into the Terrorist Mind and His Majesty King Abdullah II’s Trait: Teacher and Leader. He has published many policy papers in the US, Russia and the UK. He has published scores of articles, Op-Eds in American, Chinese, British, Russian, French, South Korean and Middle Eastern outlets. He has been lecturing at well-known universities in the Middle East and abroad. You may follow him [ @Geostrat_ME] and [@ShehabMakahleh].
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