Prime Minister Mark Carney leaving the ASEAN summit in Kuala Lumpur, Malaysia, on Sunday. Mr. Carney is meeting with Asian leaders at the summit as he aims boost Canada's trade relationships.Adrian Wyld/The Canadian Press
Prime Minister Mark Carney said he is ready to resume trade negotiations with the United States and tried to reassure Canadians that he is taking steps to shore up the country’s economy after President Donald Trump threatened an additional 10-per-cent tariff hike.
Mr. Trump said this weekend he is raising tariffs on Canadian imports after an Ontario-government TV ad critical of his protectionist levies ran during the first game of the World Series.
Mr. Carney, who is in Malaysia meeting with member countries of the Association of Southeast Asian Nations, said his government plans massive investments in Canada’s economy and intends to shift as much trade as possible away from the U.S., which has become a more unpredictable and unreliable partner since Mr. Trump took office in January.
“You’ll be seeing within the course of the next two weeks an ambitious budget which makes generational investments in Canada,” Mr. Carney told reporters.
“And we are in the process of diversifying our trade relationships – the focus of our meetings here in Asia,” the Prime Minister said. “We have an intention to more than double our exports away from the United States over the course of the next decade.”
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Mr. Carney’s pitch to this weekend’s summit was that Canada is an “unabashed” energy superpower and a reliable trading partner. He urged Asian countries not to get locked in to the U.S. market in such a way that they are prevented from trading with countries that have more predictable and rules-based approaches to commerce.
Mr. Trump, who has imposed a slew of tariffs on Canadian goods since March, had already ratcheted up tensions this past Thursday by breaking off negotiations aimed at resolving the trade war. He took the action in response to the TV ad.
The 60-second spot uses footage from nearly 40 years ago of former U.S. president Ronald Reagan decrying American protectionism, saying such trade barriers hurt every American worker and consumer.
Mr. Trump, who has said the Ontario ad misrepresents Mr. Reagan’s comments, said he was raising tariffs by 10 per cent because Canada did not immediately stop running the ad, as he wanted.
“Their Advertisement was to be taken down, IMMEDIATELY, but they let it run last night during the World Series, knowing that it was a FRAUD,” the U.S. President said in a post on his Truth Social platform as he flew to Malaysia on Air Force One.
The President has not yet issued any executive order to enforce the threatened 10-per-cent hike. It’s not clear if this new levy would apply to all Canadian imports or a selection of them. And he has announced no date for this increase.
From left: Malaysia's Prime Minister Anwar Ibrahim, Indonesian President Prabowo Subianto and Canadian Prime Minister Mark Carney at the opening of the 47th ASEAN summit in Kuala Lumpur.Vincent Thian/The Associated Press
Both Mr. Carney and Mr. Trump were in Kuala Lumpur over the weekend to attend the ASEAN summit.
Speaking at the summit on Sunday, Mr. Carney, in an apparent reference to Mr. Trump, talked of the need for dependable allies in turbulent times.
“It makes ASEAN more important than ever. It underscores the importance of reliable partners who honour their commitments, who are there in tough times and when things are not working, work collaboratively to fix them.”
Carney pitches Asia on Canada as energy superpower
He told reporters he’d agreed with Malaysian Prime Minister Anwar Ibrahim, the current chair of ASEAN, as well as next year’s chair, Philippines President Ferdinand R. Marcos Jr., that Canada would conclude a free-trade deal with ASEAN member countries by next year.
Separately, Mr. Carney said he’d agreed with the Philippines to accelerate negotiations on a free-trade deal that would also conclude next year.
He spoke of “building at home, diversifying our trade relationships abroad, and being ready to work with the United States government as, and when, the time comes.”
After Mr. Trump said he would terminate trade talks, Ontario Premier Doug Ford, whose government paid for the ad campaign, said he would pull the ad after this weekend.
The ad is much shorter than Mr. Reagan’s original address. It is edited, with certain passages presented out of order.
In Mr. Reagan’s original speech, the former president defended imposing duties on Japan during a trade dispute over semiconductors. He alleged Tokyo was failing to penalize Japanese companies’ violations of a trade agreement with the U.S.
Watch the Government of Ontario's anti-tariff advertisement
But he explained why tariffs are bad for the U.S. and hurt free trade. Those comments are largely what the Ontario government quoted in its ad.
However, Mr. Reagan also argued that his duties on Japan were justified “to stop unfair practices against American products,” while extolling the virtues of free trade overall.
The U.S. under Mr. Trump has imposed 35-per-cent tariffs on trade not covered by the United States-Mexico-Canada Agreement.
He has also imposed a number of sectoral tariffs that affect Canadian industry disproportionately, including a 50-per-cent levy on steel and aluminum and a 25-per-cent levy on automobiles.
Softwood lumber, too, has been hit hard. Canadian producers are facing levies totalling more than 45 per cent after the administration recently announced a new 10-per-cent tariff on lumber shipments into the U.S. on top of existing duties.
Last month, Mr. Trump set a date of Nov. 1 for imposing a 25-per-cent tariff on medium- and heavy-duty trucks, a measure previously announced along with tariffs on pharmaceuticals and furniture.
This is at least the second time Mr. Trump has paused trade talks with Canada.
In June, after Ottawa proceeded to enact a digital services tax that would hit U.S. tech giants, the U.S. President broke off negotiations. He resumed them after Mr. Carney scrapped the tax.
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Flavio Volpe, president of the Automotive Parts Manufacturers’ Association in Canada, called the new 10-per-cent tariff the “latest in a series of unprovoked and unwarranted escalations in tariff policy with other sovereign nations.”
He said this will mean higher prices for U.S. consumers. “Lost in the accountability loop here is the President’s threat is really to charge American taxpayers billions of dollars because of a benign World Series ad he doesn’t like.”
Former Alberta premier Jason Kenney, who also served in Stephen Harper’s federal government, called Mr. Trump’s reaction to the TV ad embarrassing.
“The Ontario ad does not misrepresent President Reagan’s anti-tariff radio address in any respect whatsoever. It is a direct replay of his radio address, formatted for a one minute ad,” Mr. Kenney said on X.
Mr. Carney emphasized that it’s the Canadian government, and nobody else, that conducts negotiations with the U.S., an apparent reference to the fact the Ontario government, not Ottawa, produced the ad.
“It is the sole responsibility of the government of Canada to have those discussions with the United States, and it’s the best way forward.”
Business Council of Canada president Goldy Hyder said Canada can’t have premiers freelancing on the Canada-U.S. relationship.
“To have every sector, every province, every premier kind of weighing in on this. I don’t see that behaviour in the United States,” Mr. Hyder said. “I don’t see governor after governor on television,” he said. “You don’t see that in Mexico.”
With reports from Laura Stone