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Justin Trudeau’s Liberal government confronts the worst crisis it has faced in foreign relations, as the dispute with China spirals out of control.

Resolving that crisis, or at least lowering the temperature, will test the abilities of the Prime Minister and his Foreign Affairs Minister, Chrystia Freeland. The life of one Canadian citizen, and the freedom of others, are at stake.

From the outside, it’s hard to know where the government went wrong. Should Ottawa have acted earlier and more firmly in deciding whether to ban the technology giant Huawei from participating in Canada’s move toward a 5G mobile network?

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Is there a way Canada could have avoided acting on an extradition request of the United States – employing the “creative incompetence” that former Liberal foreign minister John Manley said might have prevented the detention of Huawei chief financial officer Meng Wanzhou? She is the daughter of Huawei’s founder, and Chinese anger at her detention is fierce and real.

“I’m with John Manley that we could have creatively avoided our responsibilities,” said Lynette Ong, a political scientist at the Munk School of Global Affairs and Public Policy at the University of Toronto. Canada could manage American anger at letting Ms. Meng slip away more easily than it is managing China’s anger over her detention, Prof. Ong believes.

Did Canadian officials in Ottawa miss an opportunity to de-escalate the conflict through quiet diplomacy, rather than ratcheting up the rhetoric over what appeared to be the retaliatory detention of Michael Kovrig and Michael Spavor? Should they have foreseen that the Chinese might further retaliate by increasing the punishment of convicted drug trafficker Robert Schellenberg from 15 years to a sentence of death?

Or was none of this preventable?

The Canadian government “has been dealt a very bad hand,” said Gordon Houlden, director of the China Institute at the University of Alberta. “China is a rising power that is not even at the apogee of its power.” The Trudeau government is discovering the price of being on the wrong side of that power.

Here’s another troubling question: How much of this is Donald Trump’s fault? The U.S. President has undermined America’s traditional alliances, even as he threatens Chinese President Xi Jinping with a trade war. And he made things even worse for Canada by saying last month that “I would certainly intervene,” in Ms. Meng’s extradition case to secure Chinese concessions on trade.

“Canada is unfortunately caught in the middle of an ever-evolving power play in the Age of Trump and Xi,” said Leo Shin, a professor of history and Asian studies at the University of British Columbia.

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So, what next? The government obviously cannot interfere with the judicial process that will determine whether Ms. Meng is extradited to the United States.

Nor can Mr. Trudeau attempt to resolve the situation by direct talks with Chinese President Xi Jinping, as the Conservative opposition is demanding, unless and until lower-level talks ensure that conversation will be productive.

A successful conclusion to Sino-American trade talks might calm things down, but because China badly wants to avoid punishing new U.S. tariffs, and because Canada has no such leverage, “we get all the sticks and the U.S. gets all the carrots,” Prof. Houlden observed.

Prof. Ong urges Mr. Trudeau to put down his public megaphone, and to focus on “quiet diplomacy behind the scenes.” She also urges Canadian business leaders to lobby their Chinese counterparts, who must tell the regime that “the cost is very high for Chinese businesses.”

There is another, deeper, concern. For at least two decades, Liberal and Conservative governments have concentrated more and more decision-making in foreign affairs in the Office of the Prime Minister. Global Affairs Canada may no longer have the capacity it once had to manage critical files, and political advisers to Ms. Freeland and Mr. Trudeau may be out of their depth, missing subtle signals and opportunities to reduce tensions between Ottawa and Beijing.

When things settle down, there might be profit in a review of Canadian capacity in managing foreign affairs.

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But those of us on the outside can only watch and worry. The Liberal government must resolve this situation, protecting both the national interest and the safety of those at risk.

It’s a tall order. But this is what people expect their government to do.

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