The implications of U.S. allies seeking new economic partnerships

Amna Nawaz:

Well, to help us understand the implications of these shifting global relationships, I'm joined now by Chrystia Freeland, the former deputy prime minister and former foreign affairs minister of Canada.

Chrystia, welcome back to the "News Hour." Thanks for joining us.

Chrystia Freeland, Former Canadian Deputy Prime Minister:

Great to be with you.

Amna Nawaz:

So, before I ask you specifically about Canada, I want to get your big picture view on those new deals we just reported on, the E.U. with India and Vietnam, Britain and China. How do you see those? Are those a response to or a backlash to President Trump's tariff threats and other threats against NATO allies?

Chrystia Freeland:

Yes, I think, in part, they are.

I mean, I think those deals -- and I think the really important one is the E.U.-India deal. Ursula von der Leyen, the president of the European Commission, described that deal as the mother of all deals. Maybe a bit of an exaggeration, but it's really, really significant. That's an agreement between two really big economies.

And, traditionally, it's quite hard to do a trade deal with India. I'm a former trade minister, and it takes a long time to negotiate with the Indians. They're very professional, very careful, very thorough. So the fact that they signed that deal, very, very significant, and I think it's a good thing for the world.

Amna Nawaz:

In terms of dealing with China here, I do want to put to you what the E.U.'s climate chief said today. He said the E.U. should resist China's pull on clean tech. In particular, he warned about economic coercion, also warned about potential kill switches in the technology that could threaten the E.U.'s energy system.

And I should note that Canada just signed a deal to allow thousands of Chinese electric vehicles into the country at a new lower tariff rate. So does Canada not share those same security and economic concerns?

Chrystia Freeland:

Look, I think the China question is a really important one.

And when I was finance minister, I actually put in place tariffs on Chinese cars, tariffs on Chinese steel and aluminum, matching the tariffs that the Biden administration had put in place. And we put those tariffs in place because we recognized the security challenges from China, because we recognize the need to protect our workers, Canadian manufacturing workers, from Chinese intentional oversupply.

But we also did it because of our partnership with the United States. And we wanted to be a good friend and a good ally. It's hard to have those friends, though, when countries are feeling pressure from the United States, including tariffs from the United States.

Amna Nawaz:

So if we see this as part of a Canadian effort to pivot slightly away from the United States then, for Canada specifically, I mean, the two economies are so integrated, right? For every two out of every three Canadian exporters, the U.S. is the sole market. So how difficult is it going to be for Canada to pivot away?

Chrystia Freeland:

Look, I think diversification is always a good idea. Whether you are a business or a country, to rely on a single client is -- a single customer, is never a great idea.

But what I'd also like to take the opportunity to say tonight to all of your American viewers is, we want to be your friends. I think the vast majority of Canadians would prefer a close, effective, mutually beneficial relationship with the United States, including on trade.

And I know that's possible. I am the person for Canada who negotiated the USMCA, the new NAFTA trade agreement. We negotiated that with the first Trump administration. There were a lot of bumps along the way. Tariffs were imposed on Canada at one point. We responded with dollar-for-dollar retaliation.

But, at the end of the day, we got to a deal. And we got to a deal that President Trump described as the best trade deal ever.

Amna Nawaz:

And yet despite the long alliance between the two countries, we saw the Canadian prime minister, Mark Carney, in Davos talk about us being in a time of rupture. He mentioned the old order is not coming back.

Do you see what's happening now as the beginning of a new world order? And what does that look like to you?

Chrystia Freeland:

I think a lot of countries, a lot of America's traditional allies are finding their current treatment to be really challenging.

I was at Davos. One of the comments that struck me the most was actually from the prime minister of Belgium. Now, he is a conservative. He is part of the right-wing group in the E.U. He is an Atlanticist. He is the kind of person who traditionally would be a great ally of the United States.

And he said being a happy vassal is one thing. Being a miserable slave is something else. So, when a phlegmatic Flemish Belgian prime minister is describing the way he is being treated, the way his country is being treated as being treated like a miserable slave, I think you know that America's traditional allies are feeling ill-treated. And countries are responding.

Amna Nawaz:

You mentioned that U.S.-Mexico-Canada trade agreement you helped to negotiate. That is set to be reviewed by this summer. What happens if the U.S. pulls out of that?

Chrystia Freeland:

I think that would be devastating for the U.S. economy.

And one of the things that I think we have observed over the past few weeks is, when there is a strong market reaction, we see that this administration is able to course-correct. When the threats about Greenland were at their peak, you did see markets reacting negatively.

And shortly after that, you saw a softening of the U.S. position. I ultimately believe that market signals, also what the administration hears from American states, from American mayors, from American legislators, from all of the Americans who sell to Canada, I think that is ultimately going to mean that we get to a deal.

Amna Nawaz:

That is the former Deputy Prime Minister of Canada Chrystia Freeland joining us tonight.

Thank you so much for your time. It's good to speak with you.

Chrystia Freeland:

Pleasure.