Good morning. Today, we look ahead to Prime Minister Mark Carney’s trip to China this week – and the geopolitical shifts that are making for a precarious backdrop.

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Trump vs. Powell

The Trump administration has threatened to indict Federal Reserve ‍Chair Jerome Powell over Congressional testimony he gave last summer about a Fed building project, an action Powell called a pretext to gain more influence over the central bank and monetary policy.

In a statement last night, Powell accused the administration of using the legal system to pressure the Fed to ⁠lower interest rates further and faster than the central bank feels is appropriate.

U.S. President Donald Trump denied knowledge of the move, telling NBC News yesterday Powell is “certainly not very good at the Fed, and he’s not very good at building buildings,” but the development will likely fuel worries about the administration’s push for greater control over the central bank, whose independence is a cornerstone of U.S. economic policy.

Strategists with TD Bank said in a note to clients last night that Powell’s pushback suggests market reaction may prove limited. “In fact, the market may view this pushback against political interference as a positive sign for future Fed independence,” they wrote.

Canada vs. China

Mark Carney will become the first Canadian prime minister to visit Beijing in more than eight years, meeting with Chinese President Xi Jinping and business leaders over three days this week before heading to the Persian Gulf and then Davos.

The Beijing trip comes only a year after a public inquiry found China was “the most active perpetrator of foreign interference targeting Canada’s democratic institutions.” Ottawa’s levies against Chinese electric vehicles in 2024 and Beijing’s retaliation with tariffs on canola capped years of increasingly strained relations.

But the U.S. trade war has made the work of finding new markets more urgent for corporate Canada – and for politicians, who are aiming to nudge open doors in China without alienating the Trump administration.

A growing portion of Canada’s crude has already been shipped to China since the 2024 launch of the Trans Mountain Expansion pipeline. That amount is expected to grow even more as China, Canada’s second-largest trading partner after the U.S., seeks to replace oil imports from Venezuela.

The Trump administration’s plan to establish pre-eminence in Latin America puts the U.S. on a collision course with the Asian superpower, which invested about US$240-billion in the region’s energy, mining and manufacturing industries.

After his meetings in Beijing, Carney is scheduled to visit the Qatari capital of Doha, where he is seeking to convince wealthy investors to deploy their capital in Canada. He’ll then head to the annual World Economic Forum in Davos.

Principle vs. pragmatism

Critics say Carney’s trip is aimed at forging deals with some regions known to abuse human rights, and that policy makers should focus more on markets not known for coercion.

That rising tension is among the defining characteristics of the global trade war. As Carney courts China, a country known for its foreign interference and its repression of ethnic minorities, Canada and its allies are facing a threat from within.

Western powers long used to partnership with the U.S., the presumed leader of the free world, are now facing off with an administration throwing up trade barriers – and making early attempts at replacing imports with the goods of other countries. In Venezuela, crude oil. In Greenland, a crucial location for its early-warning missile defence system, and a rich source of oil and critical minerals.

This week, U.S. Secretary of State Marco Rubio is set to meet with officials of Denmark, a founding member of NATO, over the White House’s wishes to acquire the Arctic island of Greenland, an autonomous Danish territory. If it is unable to do so through diplomatic means, Rubio said last week, the President is within his rights to deploy the U.S. military.

Germany and France are leading an effort to suggest they are within their rights to fight back, working on a plan to respond should the U.S. follow through on its military threat. An attack on Greenland would drive a wedge even further between the U.S. and its Western allies after an acrimonious year. And for countries like Canada, the tricky path of trading with China without upsetting the U.S. isn’t a new one, but it’s getting harder to walk.

The copper-plated trophy