An interesting article in Japan Times reinforces several insider trade discussions that have been taking place over the past eighteen months.  Essentially, all trade deals with Canada are contingent upon their access to the USA market.  Lose the USMCA trade deal, and any trade terms between Asian and Canadian counterparts are null and void.

This is not the first time this background from key trade nations has been shared with Canada.  Japan told Canada last year that most sector trade, specifically the auto industry, was contingent upon tariff-free access to the U.S. market.  If Canada loses the USMCA, the terms of trade change completely.

This reality is now surfacing in comments directly from the Canadian trade teams and business insiders within Canada.  They are now admitting without the USMCA their leverage for trade with other countries disappears.  This is a considerable admission from within Canada government that has not yet become part of the average Canadian understanding.

If Canada loses their trade agreement with the USA, all other countries will modify their trade agreements with Canada.  Think about the leverage within that reality, overlay the Canadian government’s severe anti-Trump mindset, and you quickly realize just how dangerous Mark Carney is for Canada.

JAPAN TIMES – […] Carney’s push to lessen dependence on the U.S. is colliding with a stubborn reality: access to American markets remains a crucial part of Canada’s appeal to prospective trading partners, according to interviews with a dozen government officials and business leaders.

[…] Canadian officials acknowledge that the main draw for many potential trading partners is the prospect of gaining tariff-free access to the world’s largest market through Canada’s participation in ‌the U.S.-Mexico-Canada trade ‌agreement.

Carney regularly touts Canada’s preferential access to the U.S. market, noting that more than 85% of bilateral trade remains tariff-free.

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It’s around lunchtime and I’ve spent so much time deep in the weeds of an issue that I need a break.  So, here’s a little funny story from my real-world travels in the past few years that given the current Davos meeting topics you might find interesting.

I went to Russia in 2024, because what I was hearing in western media about the sanctions did not align with what I was seeing from reports inside Russia.  Before I went into Russia, I spent several weeks in Northern and Eastern Europe visiting various institutions, reading material and checking to see how systems in Europe were engaging with commerce given the Russian sanctions.  It wasn’t very exciting work, and sometimes I literally just sat in the lobbies of banks listening to conversations.

When I went into Russia (April, May, June and July ’24) I noticed many of the “Uber cars” were BYD brand, Chinese electric vehicles.  It made sense given two years of existing sanctions and few cars from Europe or America available except under costly brokerage fees for acquisition.  They like the Geely brand better, but BYDs are much cheaper.  A brand new BYD costs around $5,000 to $10,000 USD, in some places even less.

Then later I noticed even more of these BYD cars in Europe.  I started to pay attention to them and saw them everywhere.

When I went back into Russia a year later in 2025, there was a very noticeable increase in BYD cars.  It was crazy, they were everywhere.

My travels also took me to southeast Asia and again those damned BYD’s were all over the place.  In Thailand, Philippines, Malaysia, Vietnam, these BYD’s were everywhere, maybe even 30% of total vehicle traffic at times – most certainly well over 50% of all EVs – and there are digital billboards for “Build Your Dream” (BYD) all over the place throughout Asia.

Australia is stocked full of those things, and the middle east, yup, even there too.  It became increasingly weird to notice.  So many were visible I was wondering how the heck China can mass produce and ship this many cheap EVs so fast.

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Secretary of Treasury Scott Bessent appears on Fox News with Maria Bartiromo to discuss the Asia tour by President Trump and the trade delegation that culminated with a lengthy meeting between President Trump and Chairman Xi Jinping.

By locking down trade agreements with Australia, Malaysia, Cambodia, Vietnam, Philippines, Thailand, Japan and South Korea in advance of the meeting with Xi, President Trump had effectively boxed out the maneuvers of Beijing and isolated any contravening strategy.

Chairman Xi was facing a U.S. strategic trade reset with multiple options for replacement of Chinese goods and resources.  As a result, the Beijing trade delegation recognized President Trump had effectively neutered the scale of their economic power and influence over the U.S. economy.  Instead, the best play for big panda was to shake hands and come to agreeable terms.  WATCH:

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Playing into President Trump’s hands was/is the strains currently ongoing within the Chinese domestic economy.  Further friction against the USA would have weakened Chairman Xi domestically.

The missing piece of the puzzle is now Russia.

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For those who have followed along with the U.S-Canada trade positioning, the current status of conflict between the Trump administration and the government of Canada is not surprising.  {GO DEEP} Going all the way back to the replacement of NAFTA, with the USMCA, President Trump always said he did not favor multilateral trade deals with multiple countries; instead, he preferred bilateral free trade agreements.

Some people have construed the bilateral preference of President Trump to be the elimination of globalism in favor of nationalism in trade agreements.

While the outcome of the Trump approach indeed aligns with that theme, it is not specifically the objective of President Trump to eliminate global trade, but rather to focus on specific interests in trade that benefit the unique nature of each party involved.

As a result, the USMCA -or CUSMA as said in Canada- is not in alignment with a bilateral free trade agreement, and the conflicted differences between trade with Mexico and trade with Canada are an outcome of this dynamic.  The solution is simply to eliminate the multilateral in favor of the bilateral approach.  This is the objective of President Trump as expressed.

That said, the USMCA covers approximately 60% of U.S-Canada trade, and the remaining 40% is being debated and argued.  President Trump would prefer to just deal with 100% of the trade sectors in one free trade agreement; hence, his ambivalence until the USMCA is dissolved.

Canada, on the other hand, continues to demand that all trade conflicts be resolved without opening up the entire USMCA. Again, another conflict. Canada is like the dependent spouse in a divorce arguing for child support payments when the “children” are in their twenties.

The current status is President Trump pulling back completely from discussions with Canada, while the various provincial Premiers and Prime Minister Mark Carney antagonize over the issue.

At a certain point, when the entire national economic plan of Canada is based on “Donald Trump bad”, and all political messaging internally is to proclaim they have no alternative policy positions, the Canadians might not realize it, but they are confirming complete and total dependency on the nation Donald Trump represents.

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Wharton Professor and noted economist Mohamed El-Erian appeared on Fox News to discuss the jaw-dropping success President Trump is having with his global trade reset.

As noted by El-Erian no one, including El-Erian himself, expected President Trump to be able to navigate a global trade and economic reset with such stunning success.  The entire economic policy is being driven by the personal influence of President Trump as he leverages tariffs and policy incentives to the benefit of the USA economy exclusively.

The scale of Trump’s agenda is difficult to overstate, and China is now positioned to feel incredible pressure to align Beijing policy with the requests of President Trump.  “We thought there would be a massive retaliation against the US, there hasn’t been” El-Erian noted.  “We’re collecting $800 Billion of tariff revenue” and “inflation has waned,” he said.  This is a remarkable situation that few economists could accurately predict.  WATCH:

WOW — Economist/Wharton Professor says TARIFFS achieved something economists DIDN’T think possible!

“We thought there would be a massive retaliation against the US, there hasn’t been…we’re collecting $800 Billion of tariff revenue…inflation waned.”

INCREDIBLE, @POTUS !! 👏 pic.twitter.com/OaNtWqyTcf

— Townhall.com (@townhallcom) October 27, 2025

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This is not a surprise to readers here as we have discussed the Trump trade agenda with clear, non-pretending eyes.  The ASEAN trip by President Trump is a masterclass in leveraging trade relationships and creating isolation for China.  The downstream consequences for Canada continue to build as the Carney administration doubles down on their entrenched and futile opposition.

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Malaysia hosted the ASEAN conference attended by President Trump and positioned themselves very favorably for warm ongoing relations with the United States.

As President Trump thanked the various dignitaries for their warm hospitality, he invited them to the USA and delivered personal messages of great appreciation.  The departure ceremony is below.  WATCH:

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Next stop, Tokyo, Japan.

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United States Trade Rep. Jamieson Greer is a very solid member of the Trump trade team.  Having learned at the knee of former USTR Robert Lighthizer, you can see the stability of thought in the consistency of approach.

USTR Greer outlines the ongoing discussions between the U.S. and China on the framework of a stable trade relationship.  Against a myriad of geopolitical chess moves on the economic and trade front, Greer and Treasury Secretary Bessent play key roles in executing the Trump Doctrine.

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In the background of the President Trump and Chairman Xi meeting, we can see the broad contours of President Trump’s strategy toward both the Russia-Ukraine conflict and the China-Canada trade relationship.

If President Trump can formulate a strong, actionable and enforceable free trade agreement with Chairman Xi, it will undercut the ability of Canada to assemble cheap component goods not available in the U.S. manufacturing equation for total cost of goods.  This puts Trump in an even stronger position heading into the 2026 USMCA (CUSMA) dissolution phase.

Additionally, despite the mainstream thoughts to the contrary, putting distance between Russia and China is not averse to the interests of Russian Federation Vladimir Putin, who would strategically prefer to do business with the ‘West’ over Beijing.  However, China does not want to see their Biden-created tentacle weakened in Russia.

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Speaking to leaders of the Association of Southeast Asian Nations (ASEAN), President Trump delivered remarks during the working session.

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President Trump participates in a peace treaty, trade and critical mineral agreement signing with the Prime Minister of the Kingdom of Cambodia and the Prime Minister of the Kingdom of Thailand.

President Trump was the witness signatory for a declaration of peace and security between Cambodia and Thailand.

We, the Prime Minister of the Kingdom of Cambodia and the Prime Minister of the Kingdom of Thailand, as witnessed by the President of the United States of America and the Prime Minister of Malaysia, having met in Kuala Lumpur, Malaysia, on October 26, 2025, declare the following:

We reaffirm the unwavering commitment to peace and security between our two countries — as declared in Putrajaya, Malaysia, on July 28, 2025 — and reiterate our firm commitment to refrain from the threat or use of force, peaceful settlement of disputes, and respect for international boundary and of international law, for the promotion of peace, security, stability, and prosperity in the region on the basis of mutual respect for the independence, sovereignty, equality, territorial integrity, and national identity of our respective nations.

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Great respect was delivered by the Malaysian Prime Minister Anwar Ibrahim as President Donald Trump arrives for the ASEAN summit.  The full honor guard were present, and President Trump even enjoyed a little dancing fun with the cultural attachés.  Good Stuff.  WATCH: 

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