Why Carney must go to India (and other countries that are not the U.S.)

Open this photo in gallery:

Daryl Ching is the founder and owner of Vistance Capital Advisory, which provides accounting, capital raising and financial management services to small- and medium-sized companies.

When I advise founders on selling their companies, one lesson comes up every time: The strongest negotiating position comes from optionality.

The fastest way to increase urgency for the other party, improve terms and raise valuation is not to convince a buyer how much you need the deal. It is to show that other credible offers exist. Even if no alternative transaction ultimately closes, the presence of competing interest immediately changes the psychology. Buyers move faster. The tone shifts. Compromise becomes more likely.

That same dynamic helps explain the importance of Prime Minister Mark Carney’s many international trips, including his trade-focused visits to India, Australia and Japan.

Carney to visit Mumbai, New Delhi but not Punjab in business-focused India trip

When U.S. President Donald Trump came into power, Canada entered negotiations from a position of visible constraint. Our dependence on the U.S. market was clear, and there was little indication that Canada had realistic alternatives. In that context, tariff threats and public hard line tactics were effective precisely because Canada appeared to have no other dance partners. The imbalance allowed Mr. Trump to dictate tone and, at times, terms.

Despite campaigning on elbows up, Mr. Carney was quick to walk back retaliatory tariffs and apologize to Mr. Trump for a television advertisement that angered him.

That backdrop is essential to understanding the current moment.

As Mr. Carney engages with India, Australia and Japan, the immediate question is whether these visits will result in concrete trade agreements.

Mr. Carney wants to begin negotiations on a comprehensive free-trade agreement with India during his visit. In Australia, he will discuss defence and artificial intelligence. Given that both countries are mining powerhouses, critical minerals are likely to be on the table, too.

In Japan, Mr. Carney will talk clean energy, critical minerals and food security. Mitsubishi Corp. is a partner in the LNG Canada project, and a Japanese senior official said last year the country wants to buy more Canadian liquefied natural gas.

So, there may well be agreements that come out of Mr. Carney’s trips.

But the more important question is what these trips signal. In any negotiation, the party perceived to have no alternatives is the easiest to pressure. The moment credible options appear, leverage begins to shift.

Mr. Carney’s visit to China is a demonstration of that. It did result in a deal or two, and it caught Mr. Trump’s attention. But arguably, Mr. Trump would have paid attention anyway had there not been any deals. After all, Mr. Trump’s renewed threats after the visit appeared to warn against a comprehensive free-trade agreement with China – which Mr. Carney had not pursued.

Opinion: Canada’s relationship with India is set to evolve

In that context, Mr. Trump’s renewed tariff threats look less like confidence and more like a bid to preserve leverage. In M&A, this is the moment when a buyer, worried about competing offers, pushes hard for exclusivity. The objective is not better terms, but to shut down alternatives.

Canada’s outreach to other trade partners challenges the assumption that it has nowhere else to go, and tariff threats may be aimed at stopping that momentum before it reshapes the negotiation entirely.

Mr. Trump has always approached negotiations transactionally. He responds to positioning and leverage more than appeals to good will or shared values. From that perspective, Canada engaging seriously with large, strategically important economies does not weaken its relationship with the United States. It strengthens Canada’s hand within it.

It is important to be clear about what this strategy does and does not imply. Canada is not abandoning its most important trading relationship, nor is it choosing sides in a broader geopolitical contest. The United States will remain Canada’s dominant economic partner for the foreseeable future. Diversification is simply insurance.

In a sale process, a buyer often becomes most aggressive when exclusivity is no longer guaranteed. Buyers might threaten to walk away or propose more exacting terms, even if it hurts their own positions as well. Tariff threats can serve a similar function in trade negotiations. They test resolve and probe whether the other side truly has alternatives.

Mr. Carney’s trips are messages to show that we do. Canada does not need to finalize every new trade discussion to benefit from them. The signal alone changes the dynamic.