Mark Carney, set to address trade issues with President Trump, sparks optimism among experts
In Washington, Prime Minister Mark Carney faces a tough test next week as he meets with President Donald Trump, seeking to strike a balance between asserting Canada's position and preserving its place in a crucial North American trade pact threatened by Trump's tariffs.
After months of tense exchanges and threats of annexation, the newly elected prime minister will find himself in a delicate predicament. Carney will need to convey strength while managing Canada's standing within the North American trade agreement that Trump's tariffs have sought to disrupt.
"My government will stand firm to secure the best deal for Canada," Carney said last week, addressing the media for the first time since his election.
The Canada-U.S.-Mexico Agreement on trade, known as CUSMA, was negotiated during the Trump administration's first term. At the time, Trump hailed it as a historic achievement, while Canadian officials proclaimed it as a resounding victory for Canada.
CUSMA is set for review next year, but after Trump's reelection, it became apparent that the president intended to upset the continental trade pact. Canada and Mexico were hit early with tariffs linking them to drug trafficking and illegal immigration. U.S. government data shows a minuscule volume of illicit substances is intercepted at the U.S.-Canada border. Both countries also suffered under Trump's steel, aluminum, and automobile tariffs.
Throughout his presidency, Trump has made provocative statements, labeling then-prime minister Justin Trudeau as a "governor" and suggesting that Canada would be better off as a U.S. state.
Yet, Trump's belligerence may not be entirely targeted at sabotaging CUSMA. When Trump escalated his trade wars worldwide with "reciprocal" tariffs in early April, Canada and Mexico were excluded. Trump temporarily paused the largest of those duties, proposing negotiations, but kept in place a 10% universal tariff on most imports to the U.S.
Signs suggest that the Trump administration still values CUSMA, a key accomplishment from his first term. Laura Dawson, an expert on Canada-U.S. relations, explained that "the pausing of tariffs for Canada and Mexico hints at the administration's intent to focus on improving CUSMA," implying that CUSMA may be under review.
Tuesday's meeting could offer valuable insights into Trump's plan for a bilateral relationship that was once as friendly and stable as it could be. Last week, Trump described Carney as a "polite gentleman" and expressed optimism about forging a "great relationship" with Canada.
United States Trade Representative Jamieson Greer hinted at the Trump administration's aim to maintain cordial partnerships with its closest neighbors. Greer told Fox News that "the president desires a harmonious relationship in North America."
However, uncertainties persist regarding Trump's ultimate goals for Canada. Speaking about negotiations with other countries, Greer outlined a favorable agreement as one that lowers tariffs, eliminates non-tariff trade barriers, addresses American concerns over digital trade and intellectual property, aligns export controls for economic security, and offers the U.S. economic opportunities, including investments in critical minerals.
CUSMA provided duty-free trade for nearly all goods between Canada and the United States. Both countries have already co-invested in Canadian critical mineral projects, and Canada has imposed tariffs on Chinese electric vehicles, steel, and aluminum to appease U.S. concerns.
Canada's former top trade negotiator, Steve Verheul, noted similarities between the present atmosphere and the tensions during the first Trump administration following the president's withdrawal from NAFTA, which was replaced by CUSMA. Verheul observed that Canada eventually navigated the situation by being creative and presenting solutions.
Although Canada has once again encountered extreme proposals, Verheul suggested that Trump may be easing up. The president has repeatedly delayed tariffs on Canada and partially rolled back some of the consequences for imports that comply with CUSMA rules.
Negotiating a unified front in discussions with the U.S. administration will be crucial for Carney, according to Laura Dawson. Trump has already taken note of the Liberal minority win, commenting on the "tight race" making it "very complicated for the country."
Dawson recommended that Carney form a multi-party front on trade, with strong Conservative, regional, and sectoral representation. Carney will need to exercise strategic thinking as Canadian businesses seek economic growth opportunities in both Canada and the U.S., while also avoiding giving the impression of total forgiveness.
"Certainly, there is a lot of animosity in Canada," Dawson conceded. "Balancing a short-term crisis with the United States while addressing Canada's long-term competitiveness challenge will be a formidable task."
(Updated report on May 4, 2025, by The Canadian Press)
- Prime Minister Mark Carney's government is set to face a challenging meeting with President Donald Trump next week, aiming to preserve Canada's place in the North American trade pact, CUSMA, threatened by Trump's tariffs.
- As Carney prepares for this encounter, he will need to portray resolve while negotiating Canada's standing within CUSMA, a trade agreement that Trump's tariffs have aimed to disrupt.3.Greater Toronto's business community is closely watching this meeting, alarmed at the potential impact of trade policies on their operations and the Canadian economy.
- The policy-and-legislation environment in Ottawa, Canada's capital, will undoubtedly be shaped by the outcomes of Carney's discussions with Trump, affecting sectors ranging from healthcare to general news.
- Canada has already experienced the brunt of Trump's tariffs on steel, aluminum, and automobiles, an issue that has strained relations between the two countries.
- Despite Trump's combative rhetoric, some signs suggest that the U.S. administration still values CUSMA, viewing it as an opportunity to improve the agreement and potentially lower tariffs.
- Canada's position on various issues, including digital trade, intellectual property, and critical minerals, will be crucial in any renegotiation of CUSMA, as determined by Greer, the United States Trade Representative.
- As Carney faces this political battle, he will need to navigate a delicate balance, ensuring a unified front from various political parties and sectors in Canada, while avoiding conveying a message of total forgiveness to Trump's administration.
