Carney bucks Trump as trade war escalates

OTTAWA — As a Canada-U.S. trade war escalates, Prime Minister Mark Carney is not mincing words in the economic border battle now underway. "It is evident it is a new attack by the Americans on Canada," Carney said Saturday on Parliament Hill, in French. "So, it is an attack in a war. It's not a good choice. We want a global accord between the two countries." With Canada-U.S. Trade Minister Dominic LeBlanc and chief negotiator Janice Charette at his side, Carney said Canadian negotiators "worked intensively and in good faith with the United States to negotiate a new comprehensive trade deal." He added: "We cannot accept what they offered, and we will not give what they've asked." Carney blamed the Americans for unveiling last-minute proposals that included an American exclusion for medium and heavy-duty trucks from tariff relief. He also cited other measures that were "uneconomic, unfair and undermined the net benefits to Canada, calling into question the reliability of any deal." U.S. President Donald Trump rolled out a 50 percent tariff on $20 billion worth of Canadian goods last month, but included a 30-day grace period to allow for a negotiated resolution. The duties were originally set to go into effect at midnight on Aug. 19, but Trump paused the duties for three days, saying on social media late Tuesday night that the delay was "based on the fact that Canada and the U.S.A., subject to the finalization of documents, have a DEAL!" In the final hour before the new tariffs kicked in, talks that for days seemed positive — even "very close" to a deal — disintegrated. Late Friday night, Carney called his negotiators home. U.S. Trade Representative Jamieson Greer took a starkly different view of the breakdown, accusing Canada during a Friday night call with reporters of "new demands and walkbacks of other commitments." Carney flatly denied that Canada made last-minute proposals that derailed the talks. Now, Canada will match the new round of American tariffs with dollar-for-dollar retaliation that targets U.S. steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics. Those measures, to be revealed within days, will take effect on Sept. 8, Carney said Saturday. The prime minister has long insisted that no deal was better than a bad deal — and a majority of Canadians are on his side. Carney came to power after convincing the country he could stand up to Trump. Now he faces a new challenge: Convince them it's worth the cost. Poll after poll in recent days showed Canadians did not want Carney to make any more concessions to the Trump administration. Most recently, a Leger survey measured 56 percent support for holding the line. "It would be more dangerous, politically, for the Carney government to get a deal that people believe required big concessions than no deal that leads us to these tariffs," David Coletto, CEO of the polling firm Abacus Data, told POLITICO in the days before things fell apart. "The decisions coming out of Washington, for most Canadians, feel deeply threatening," Coletto said, adding, "The threat of Trump and the emotional reaction that people feel is far greater than the fear they have of the economic implications." Ontario Premier Doug Ford, a conservative politician who reliably supports Carney — a Liberal — on trade issues, backed the prime minister's exit. "I'm glad he didn't sign that deal because it was a bad deal," Ford told reporters on Saturday. "I thought it was a terrible deal, and I was very clear with the prime minister, once you make these deals, they can last for years and years and go into decades." Ford also said he supported dollar-for-dollar retaliation. The Business Council of Canada, a lobby group for the country's CEOs, also threw its support behind Carney on Saturday. "We trust our government and our negotiating team in determining what is in the best interests of Canada and we thank them for their efforts," it said in a statement. "We remain hopeful that Canada and the United States will eventually find common ground," the statement continued. "Today, however, our focus must be on strengthening Canada and our economy for all Canadians." Carney said Ottawa would soon announce support for Canadian businesses hurt by the trade war, including the steel industry and small- and medium-sized businesses. "We will support these businesses for as long as it takes," Carney said. Since taking office, Carney has played the role of a war-time prime minister, flexing his global contacts and economic bona fides. "I'm most useful in a crisis," he said during last year's federal campaign, pointing to his experience as a central banker who navigated the global financial crisis and Brexit. With Trump threatening Canada's sovereignty, Carney told voters the election came down to one question: Who is best equipped to take on Trump? On the campaign trail, Carney even adopted the hockey slogan "elbows up," joining Mike Myers for a viral ad in which the Canadian American comedian appeared in a Canada hockey jersey that read "NEVER 51" on the back. At the outset of the campaign, Carney warned that Trump "wants to break us so America can own us" — provocative language as Canadian public opinion turned against the U.S. Carney has enjoyed a political honeymoon ever since. The 338Canada poll aggregator pegs Liberal support nationwide at 45 percent, 12 points ahead of rival Conservatives. Government approval currently sits at an average of 54 percent, compared to 36 percent who disapprove. Carney's government has sustained a positive rating since he took office. The vast majority of Canada's exports head to the U.S., a massive market right next door. Cross-border commerce has been buoyed for decades by successive free trade pacts, including the United States-Mexico-Canada Agreement — a deal that Trump's tariff policy has repeatedly worked to subvert, but still covers most goods. Carney came to power on a pledge to diversify Canada's trading partners. He has traveled the world in search of foreign investment commitments and new markets. Cabinet ministers routinely undertake trade missions meant to see through the prime minister's vision. U.S.-bound exports have fallen as a share of total trade in the last year. In the first three months of 2025, as Carney sought the Liberal Party leadership and called an election, Canada sent 71.6 percent of goods and services exports to the U.S. That dropped to 64.1 percent in the first quarter of 2026. Still, most Canadian exporters are finding customers in the nearest neighbor. In June, American customers scooped up 69.5 percent of merchandise exports — nearly C$54 billion. Carney spent Thursday in his Ottawa office, getting Mexico President Claudia Sheinbaum on the horn. The two leaders, both of whom want to protect North America's integrated supply chains, have been exchanging notes throughout the trade war and keeping close as a way to avoid being played off each other by Trump. Beyond this crisis, the bigger issue will be the future of the USMCA — the deal Trump once hailed as the "largest, fairest, most balanced, and modern trade agreement ever achieved." That agreement is now up for renegotiation as part of a mandatory six-year review. The hope in both Washington and Ottawa was that a breakthrough in the tariff talks could also pave the way for broader engagement on that review, but the escalating trade war throws that pact further into limbo. Despite his war-time leader's resolve, Carney said Saturday that "a mutually beneficial trade agreement" with the U.S. was still possible. But he also flexed his former central bank governor's muscles as "someone who's been in and around financial markets for a long period of time." He insisted Canada had a strong economic foundation for the fight ahead. "If you don't have your house in order, it's too late," he said. "We have our house in order."