1 MIN AGO: What Canada Quietly Did in the Trade War Has Republicans Worried

追加: 2026-06-01

[00:00:00]The Westridge Marine Terminal is located on the eastern side of Burrard Inlet right outside Vancouver. For the majority of its operational years, it shipped a few hundred thousand barrels of Canadian crude each month onto tankers headed for refineries along the American West Coast. That was the usual pattern, the steady and familiar movement that defined its purpose over time. Edmonton to Burnaby, Burnaby to Anacortes, Anacortes to the pump, a continental cycle, steady and reliable, operating for decades without much interruption or change in its established direction. In October of 2025, that pattern quietly shifted in a noticeable way. Vessel tracking information from the analytics company Kepler shows that about 70% of the crude departing Westridge that month did not head south as it had for so long.

[00:00:48]Instead, it traveled west to refineries in Shandong province, in Zhejiang in South Korea, and in Singapore. The American portion of those barrels had dropped sharply within 18 months, marking a significant change in the established flow. The tankers were bigger, the destinations were more distant, and the deals were no longer being arranged in Houston as they once had been in the previous setup. This is not a prediction or something yet to unfold. This is an actual shift of physical oil, millions of barrels, already happening in real and measurable terms. By the end of 2025, China had become the top individual buyer for crude moving through Canada's only direct pipeline to the Pacific. And within the Republican policy circles in Washington, the issue has started to come up in a way it did not a year earlier, carrying a different weight now. Not whether Canada is upset, not whether Carney is making a show, but whether the most dependable energy provider the United States has ever known is actively leaving right now in a manner that feels increasingly real and immediate. That is the story tonight, and to grasp why it has the people who shape tariff policy concerned, truly concerned in private settings in ways they will not yet voice openly or admit in more public discussions. You have to start with the pipeline and go back to the year 1972 to see the deeper connections at play. The Trans Mountain expansion began operating on the 1st of May, 2024. It was not a brand new pipeline in the full sense. It was a twinning, a doubling of a route that had connected Alberta to the British Columbia coast since 1953.

[00:02:24]Its building had been a national ordeal filled with complications and challenges. 34 billion Canadian dollars, over a decade of hold-ups, legal battles, regulatory changes, and a federal purchase in 2018 when its American owner, Kinder Morgan, pulled out. When it finally started up, capacity on the system tripled from 300,000 barrels a day to 890,000.

[00:02:48]For its initial months, the thinking in Calgary and in Washington was identical in its expectations. The expanded route would supply the American West Coast, Puget Sound, the Bay Area, the Los Angeles Basin. That thinking did not hold up against reality in the end.

[00:03:03]Within a year, according to figures released by the pipeline research firm Vortha, around 2/3 of TMX exports were going not south, but across the Pacific.

[00:03:13]The American West Coast was getting a reduced portion of Canadian heavy crude than it had gotten the year before the expansion finished, showing a clear redirection. Then came the next shift, less obvious, but more significant in its implications. In January of 2026, Prime Minister Mark Carney went to Beijing. He was received by Premier Li Chang and by the chairman of the National People's Congress, the second and third highest figures in the Chinese political structure. He came out of those discussions with what his office called a preliminary, but landmark agreement, a structural partnership cutting tariffs both ways, allowing a quota of 49,000 Chinese electric vehicles into the Canadian market at a tariff of 6.1% and opening the way for Canadian canola, pork, and seafood back into Chinese ports they had been shut out of since 2024. Carney is 60 years old. He spent 13 years inside two G7 central banks.

[00:04:06]Governor of the Bank of Canada through the 2008 crisis, then Governor of the Bank of England through Brexit. He is not a politician by background. He is a balance sheet man, and the agreement he returned with from Beijing was in its core a balance sheet hedge against a single counterparty risk. That counterparty is the United States. Step back from the official wording for a moment. In March of 2026, according to Statistics Canada, Canadian merchandise exports to countries other than the United States increased by 24.8% in a single month, the second largest monthly rise in the country's recorded trade history. In that same month, exports to the United States dropped by 6.6% the sharpest one-month fall since the early weeks of the pandemic. The Bank of Canada, in its January 2026 monetary policy report, estimated that American tariffs would leave Canadian GDP roughly 1 and 1/2% lower by the end of the year than it had projected a year earlier. The economy was being reshaped in real time by political pressure from the south, and the reaction shown in the trade figures was a redirection of the country's commercial activity away from the customer that pressure was coming from. This is the part of the story that Republican strategists are now considering in private. And it is the part that finds its echo in a paper written in 1972.

[00:05:25]In the autumn of that year, the Secretary of State for External Affairs in Pierre Trudeau's cabinet, a soft-spoken Toronto economist named Mitchell Sharp, published a white paper titled Canada-US Relations, Options for the Future. It appeared in the journal International Perspectives. Sharp laid out three paths. The first was the status quo. The second was deeper integration with the American economy.

[00:05:48]The third, which he recommended and which the Trudeau government adopted, was a deliberate structural diversification of Canadian trade and investment away from the United States.

[00:05:58]The trigger for that paper had been the Nixon shocks of August 1971. President Richard Nixon, without consulting any of America's allies, had taken the dollar off the gold standard, imposed a 10% surcharge on imports, and declared a 90-day wage and price freeze. Canada, which had assumed its preferential access to the American market was a feature of the architecture, discovered overnight that it was a privilege and a revocable one. Trudeau flew to Washington. He asked for an exemption.

[00:06:27]He was refused. Asa McKercher, a political historian at the Brian Mulroney School of Government at St. Francis Xavier University, put the parallel directly in remarks reported by Yahoo Finance in July of 2025. The Nixon shocks, he said, served as a reminder of how Canada was reliant on America in such a big way. And that gave rise to the idea that Canada should not rely so heavily on the United States anymore.

[00:06:53]That is McKercher's framing of the historical record. The pattern he is pointing to is not coincidence. It is mechanism. The third option in its 1970s version failed. The share of Canadian exports going to the United States never dropped below 65% through the decade. By the early 1980s, it was back above 70.

[00:07:12]The geography was too strong. The infrastructure pointed the wrong way.

[00:07:16]Canada had no pipeline to its own Pacific coast capable of moving meaningful volumes of crude. Its rail did not run east-west the way its commerce did. Mulroney came in, reversed Sharp's policy, and signed the Canada-US Free Trade Agreement in 1988. By 1994, NAFTA had cemented the continental economy. This is where the present moment differs from 1972, and this is what changes the calculus for the men writing tariff policy in Washington today. The infrastructure that was missing in Sharps era now exists. TMX is operational. It moves nearly 900,000 barrels a day. The Westridge Marine Terminal has been upgraded. Canadian crude exports to South Korea, which were $0 in 2023, reached 411 million Canadian dollars between May 2024 and September 2025, according to the Asia Pacific Foundation of Canada. Crude exports to Indo-Pacific markets, Singapore, Hong Kong, India, alongside China and Korea, went from virtually nothing to an average of 571 million Canadian dollars a month inside 17 months. The pipe that did not exist in Mitchell Sharps day exists in Mark Carney's, now the most senior voice on the American side. On the 25th of January 2026, Treasury Secretary Scott Bessent appeared on ABC's This Week.

[00:08:39]Asked about the Canada-China agreement, Bessent did not dismiss it. He framed it as a strategic problem. "We can't let Canada become an opening that the Chinese pour their cheap goods into the US," Bessent said. He went further. He questioned what Prime Minister Carney was doing, suggesting the Prime Minister was virtue signaling to his globalist friends at Davos. That is the public language. The private language inside Treasury and inside the office of the United States Trade Representative is colder. The Kuzma review opens this summer. The North American trade architecture that Mulroney built in 1988 and that was renegotiated under the first Trump administration in 2020 is now being re-examined by a Canadian government that has, in the words of its own Prime Minister speaking at Davos, declared the old relationship over. That is Bessent's verdict, and his verdict reframes the entire trade war narrative of the last 18 months. The American assumption going into the tariff escalation was that Canada had nowhere else to go. The data from Westridge says otherwise. The cascade from that single fact is now visible across five layers and each of them lands in a different room in Washington. The immediate layer is the refineries. The American Gulf Coast refining complex was built in significant part to process Canadian heavy crude. Those refineries are configured for it. When Enbridge's mainline pipeline rejected 13% of crude nominations in January of 2026 because Alberta production exceeded southbound capacity, the barrels that did not move south moved west. American refiners pay the price differential. American consumers eventually pay the refiners.

[00:10:15]The second layer is the auto sector.

[00:10:17]Doug Ford, the premier of Ontario, called the Carnish Automotive Arrangement lopsided in a post on X in January, warning that allowing more Chinese electric vehicles into Canada under preferential tariff treatment risks closing the American door to Canadian-built cars. Ford is a conservative. His warning was directed at his own prime minister. It was also a signal flare to Detroit. The third layer is the markets. The Canadian dollar, the Toronto Stock Exchange, the Government of Canada bond curve, all of these are now pricing a structural shift in the country's external accounts. Canadian crude is trading closer to 90 American dollars a barrel, a level the industry had not seriously contemplated five years ago. That is a transfer of wealth from American refiners and American consumers to Canadian producers and the Canadian treasury. The fourth layer is institutional. Canada has signed a new trade agreement with Indonesia. It has relaunched negotiations with India. It has signed a foreign investment promotion and protection agreement with the United Arab Emirates. It has opened consultations on a Mercosur deal, Argentina, Brazil, Paraguay, Uruguay. It has announced its intention to begin negotiations with Thailand. None of these on its own is decisive. Taken together, they are the institutional scaffolding of a country building optionality. And the fifth layer, the one this audience will care about most, is the strategic one. The North American energy and trade system that has anchored the dollar's reserve position, anchored American manufacturing supply chains, and anchored the strategic posture of the United States since the end of the Cold War is being quietly unbundled by its second largest member.

[00:11:54]What this means for the viewer is more direct than the headline suggests. If you hold an American retirement account weighted toward the S&P 500, you hold exposure to the big three automakers, to the Gulf Coast refining complex, and to the multinationals whose supply chains run north-south across the continent.

[00:12:11]Each of those exposures is now being repriced. If you have grandchildren who will inherit the strategic environment we leave them, that environment now contains a Canada that has demonstrated operationally, with steel in the ground and tankers on the water, that it has alternatives. The reserve currency, the integrated continent, the assumption that geography settles everything. Each of those is a little less load-bearing this year than it was last year. History rarely repeats, it rhymes. Mitchell Sharp's third option failed because Canada did not have the pipe, did not have the port, did not have the buyer.

[00:12:45]Mark Carney's third path begins with all three already operational. So, return for a moment to the Westridge Marine Terminal on the eastern arm of Burrard Inlet. The tankers are larger now. The flags they fly are not the ones that flew there a decade ago. The crude flowing onto them was pumped out of the same Alberta ground that has fueled American refineries for 60 years. But, it is not going to American refineries.

[00:13:07]It is going to refineries in countries that the United States, in its public posture, considers strategic competitors. That is not a forecast.

[00:13:14]That is the manifest data, signed and stamped, leaving a Canadian port every week. The men who write tariff policy in Washington have begun in private to ask the question the public conversation has not yet caught up to. What happens to the leverage of a tariff when the country you are tariffing has, while you were not watching, built another door?

[00:13:32]Mitchell Sharp did not live to see his third option work. He died in 2004. The infrastructure he wanted was finished 20 years after he was buried, and it is now moving oil in volumes he could not have imagined in the direction he first proposed. The story is not whether Canada has retaliated. Canada has not retaliated, not in the conventional sense. The story is that while the tariffs were being announced and the press conferences were being held, Canada was quietly turning the valves.

[00:14:00]The Westridge Marine Terminal is located on the eastern side of Burrard Inlet, right outside Vancouver. For the majority of its operational years, it shipped a few hundred thousand barrels of Canadian crude each month onto tankers headed for refineries along the American West Coast. That was the usual pattern, the steady and familiar movement that defined its purpose over time. Edmonton to Burnaby, Burnaby to Anacortes, Anacortes to the pump. A continental cycle, steady and reliable, operating for decades without much interruption or change in its established direction. In October of 2025, that pattern quietly shifted in a noticeable way. Vessel tracking information from the analytics company Kepler shows that about 70% of the crude departing Westridge that month did not head south as it had for so long.

[00:14:49]Instead, it traveled west to refineries in Shandong province, in Zhejiang, in South Korea, and in Singapore. The American portion of those barrels had dropped sharply within 18 months, marking a significant change in the established flow. The tankers were bigger. The destinations were more distant, and the deals were no longer being arranged in Houston as they once had been in the previous setup. This is not a prediction or something yet to unfold. This is an actual shift of physical oil, millions of barrels, already happening in real and measurable terms. By the end of 2025, China had become the top individual buyer for crude moving through Canada's only direct pipeline to the Pacific. And within the Republican policy circles in Washington, the issue has started to come up in a way it did not a year earlier, carrying a different weight now. Not whether Canada is upset, not whether Carney is making a show, but whether the most dependable energy provider the United States has ever known is actively leaving right now in a manner that feels increasingly real and immediate. That is the story tonight.

[00:15:52]And to grasp why it has the people who shape tariff policy concerned, truly concerned in private settings in ways they will not yet voice openly or admit in more public discussions, you have to start with the pipeline and go back to the year 1972 to see the deeper connections at play. The Trans Mountain expansion began operating on the 1st of May, 2024.

[00:16:15]It was not a brand new pipeline in the full sense. It was a twinning, a doubling of a route that had connected Alberta to the British Columbia coast since 1953.

[00:16:25]Its building had been a national ordeal filled with complications and challenges. 34 billion Canadian dollars, over a decade of hold-ups, legal battles, regulatory changes, and a federal purchase in 2018 when its American owner, Kinder Morgan, pulled out. When it finally started up, capacity on the system tripled from 300,000 barrels a day to 890,000.

[00:16:49]For its initial months, the thinking in Calgary and in Washington was identical in its expectations. The expanded route would supply the American West Coast, Puget Sound, the Bay Area, the Los Angeles Basin. That thinking did not hold up against reality in the end.

[00:17:04]Within a year, according to figures released by the pipeline research firm Vortha, around 2/3 of TMX exports were going not south, but across the Pacific.

[00:17:14]The American West Coast was getting a reduced portion of Canadian heavy crude than it had gotten the year before the expansion finished, showing a clear redirection. Then came the next shift, less obvious but more significant in its implications. In January of 2026, Prime Minister Mark Carney went to Beijing. He was received by Premier Li Qiang and by the chairman of the National People's Congress, the second and third highest figures in the Chinese political structure. He came out of those discussions with what his office called a preliminary but landmark agreement, a structural partnership cutting tariffs both ways, allowing a quota of 49,000 Chinese electric vehicles into the Canadian market at a tariff of 6.1% and opening the way for Canadian canola, pork, and seafood back into Chinese ports they had been shut out of since 2024. Carney is 60 years old. He spent 13 years inside two G7 central banks, governor of the Bank of Canada through the 2008 crisis, then governor of the Bank of England through Brexit. He is not a politician by background. He is a balance sheet man, and the agreement he returned with from Beijing was, in its core, a balance sheet hedge against a single counterparty risk. That counterparty is the United States. Step back from the official wording for a moment. In March of 2026, according to Statistics Canada, Canadian merchandise exports to countries other than the United States increased by 24.8% in a single month, the second largest monthly rise in the country's recorded trade history. In that same month, exports to the United States dropped by 6.6% the sharpest one-month fall since the early weeks of the pandemic. The Bank of Canada, in its January 2026 monetary policy report, estimated that American tariffs would leave Canadian GDP roughly 1 and a half percent lower by the end of the year than it had projected a year earlier. The economy was being reshaped in real time by political pressure from the south, and the reaction shown in the trade figures was a redirection of the country's commercial activity away from the customer that pressure was coming from.

[00:19:17]This is the part of the story that Republican strategists are now considering in private. And it is the part that finds its echo in a paper written in 1972.

[00:19:26]In the autumn of that year, the Secretary of State for External Affairs in Pierre Trudeau's cabinet, a soft-spoken Toronto economist named Mitchell Sharp, published a white paper titled Canada-US Relations, Options for the Future. It appeared in the journal International Perspectives. Sharp laid out three paths. The first was the status quo. The second was deeper integration with the American economy.

[00:19:49]The third, which he recommended and which the Trudeau government adopted, was a deliberate structural diversification of Canadian trade and investment away from the United States.

[00:19:59]The trigger for that paper had been the Nixon shocks of August 1971. President Richard Nixon, without consulting any of America's allies, had taken the dollar off the gold standard, imposed a 10% surcharge on imports, and declared a 90-day wage and price freeze. Canada, which had assumed its preferential access to the American market was a feature of the architecture, discovered overnight that it was a privilege and a revocable one. Trudeau flew to Washington. He asked for an exemption.

[00:20:28]He was refused. Asa McKercher, a political historian at the Brian Mulroney School of Government at Saint Francis Xavier University, put the parallel directly in remarks reported by Yahoo Finance in July of 2025. The Nixon shocks, he said, served as a reminder of how Canada was reliant on America in such a big way. And that gave rise to the idea that Canada should not rely so heavily on the United States anymore.

[00:20:54]That is McKercher's framing of the historical record. The pattern he is pointing to is not coincidence. It is mechanism. The third option in its 1970s version failed. The share of Canadian exports going to the United States never dropped below 65% through the decade. By the early 1980s, it was back above 70.

[00:21:13]The geography was too strong. The infrastructure pointed the wrong way.

[00:21:17]Canada had no pipeline to its own Pacific coast capable of moving meaningful volumes of crude. Its rail did not run east-west the way its commerce did. Mulroney came in, reversed Sharp's policy, and signed the Canada-US Free Trade Agreement in 1988. By 1994, NAFTA had cemented the continental economy.