Mark Carney waves next to his wife Diana Fox after winning the race to become leader of Canada's ruling Liberal Party in Ottawa, on March 9.Blair Gable/Reuters
Mark Carney, the two-time central banker, faces the biggest challenge of his life as he fights to win an imminent general election on the ballot question of who is best able to guide Canada through Donald Trump’s tariff war and threats to this country’s independence.
Mr. Carney, who made the U.S. President’s America First agenda the focus of his battle for the Liberal leadership, used his victory speech to appeal to Canadian patriotism, saying he has the skill set to defend the economy and Canada’s sovereignty.
“We are all being called to stand up for each other and for the Canadian way of life,” he told Liberal Party faithful Sunday evening. “We didn’t ask for this fight, but Canadians are always ready when someone drops the gloves.”
Mark Carney, who won the Liberal leadership to replace Justin Trudeau, spoke of the differences between Canadians and Americans in his acceptance speech.
Reuters
Mr. Carney will face his first test on Wednesday, when Mr. Trump plans to move ahead with 25-per-cent tariffs on steel and aluminum, although the new Liberal Leader is not expected to officially be sworn in as prime minister until Thursday or Friday. Mr. Trump is promising in early April to slap 25-per-cent tariffs on most Canadian imports and a 10-per-cent levy on energy, critical minerals and potash.
Mark Carney elected Liberal Leader in landslide victory
Transport Minister Anita Anand, a close confidant, said Mr. Carney’s goal is to get back to the bargaining table, even if the country is in the midst of an election. Carney insiders have told The Globe and Mail that an election will be called for either April 28 or May 5.
“We need to get to the negotiating table so that we don’t have the trickle down of new policies every single day from the White House, and that requires a leader who is going to confront the 25-per-cent tariffs head-on with the group of cabinet ministers and caucus behind them,” Ms. Anand said.
Prime Minister Justin Trudeau wipes his eye as he takes the stage at the Liberal leadership announcement event.Justin Tang/The Canadian Press
Mr. Carney has said little about how he would handle the mercurial Mr. Trump, who, since moving back into the White House on Jan. 20, has imposed off-and-on tariffs against Canada and Mexico. Last week, in the face of U.S. business pressure, the President hit pause on tariffs on most Canadian and Mexican imports until April 2.
A source in the Carney camp said the prime-minister-designate will send a clear message to the White House that Canada is under new management. The source said Mr. Carney’s approach to dealing with the President is to remain calm, cool and steady, pointing to how he managed the global financial crisis in 2008 at the Bank of Canada and steered Britain through Brexit while heading the Bank of England.
The Globe is not identifying the source who was not authorized to discuss internal talks.
In Mark Carney, Liberals bet on a technocrat to weather turbulence with Trump
The source said Mr. Carney’s strategy is not to take the bait if the President talks about annexation or gets into name-calling, as he did with Prime Minister Justin Trudeau, whom Mr. Trump regularly demeaned as governor of the 51st state.
U.S. Commerce Secretary Howard Lutnick told NBC’s Meet the Press on Sunday that Mr. Trudeau’s public criticism of the super-sensitive Mr. Trump created a “sort of mess for Canada,” unlike Mexican President Claudia Sheinbaum, who he said “was much more calm and thoughtful.”
David MacNaughton, a former Canadian ambassador to Washington, said he expects that Mr. Carney’s style is to be less confrontational in public and more prone to carry out negotiations in private.
But Mr. MacNaughton said Mr. Carney will undoubtedly make it clear how unfair it is for the President to impose tariffs on national-security grounds when Canada is a trusted ally on defence and security.
“He is saying we are a national security threat, but he is more of a security threat to us than we are to him, and we need to govern ourselves accordingly,” Mr. MacNaughton said.
A source said Mr. Carney’s approach to dealing with U.S. President Donald Trump is to remain calm, cool and steady, pointing to how he managed the global financial crisis in 2008 at the Bank of Canada.Spencer Colby/The Globe and Mail
The source said Mr. Carney is expected to get a congratulatory call from the President within the next few days. After the cabinet is sworn later this week, Mr. Carney will hold a meeting with the provincial and territorial premiers to plot trade strategy.
The Globe reported Saturday that Mr. Carney is unlikely to make changes to key ministers who have been handling U.S. relations, namely Finance Minister Dominic LeBlanc, Foreign Affairs Minister Mélanie Joly and Public Safety Minister David McGuinty.
The three ministers represent safe ridings and can focus on dealing with the Trump administration during the election campaign.
The situation in Washington has changed dramatically from Mr. Trump’s first term, when he was critical of Canada but still renegotiated the North American free-trade agreement. This time around, he has actually initiated a trade war with Canada and other close allies.
Part of Mr. Carney’s strategy will focus on reaching out to U.S. governors, legislators in Congress, corporate executives and large-city mayors to make the case that Mr. Trump’s policies will significantly affect the U.S. economy, the source said.
But Mr. MacNaughton, who helped negotiate the North American free-trade agreement in 2018 as envoy to Washington, said it is going to take time for Americans to wake up to the President’s misguided trade war.
“The problem fundamentally is he thinks he can’t do anything wrong, and he has got all sorts of sycophants around telling him anything he wants to hear. Anyone who has a different view have their mouths shut right now. That is the business community. That is legislators because they are all afraid,” he said.
U.S. economists warn that tariffs will spike inflation, create economic dislocation and dampen the investment climate. Already the S&P 500 index has fallen 3.8 per cent since Mr. Trump began his term on Jan. 20 and is down 6 per cent since an all-time high in mid-February. The U.S. Federal Reserve Board of Atlanta forecasts that American economic output will drop by 2.8 per cent in the first quarter of 2025 after nearly three years of growth.
In his convention speech, Mr. Carney vowed to retaliate against Trump tariffs with countermeasures that will have 'maximum impact in the U.S. and minimum impact' in Canada.Justin Tang/The Canadian Press
In an interview on Fox News on Sunday, Mr. Trump refused to rule out the possibility that the U.S. economy will head into recession this year and that inflation will rise, owing to his chaotic trade tariffs policy causing instability and market turbulence.
When asked if he was expecting a recession this year, Mr. Trump demurred.
”I hate to predict things like that. There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing. And there are always periods of, it takes a little time. It takes a little time, but I think it should be great for us,” he said.
When asked if he thoughts his tariffs on U.S. imports would fuel inflation, he replied: “You may get it. In the meantime, guess what? Interest rates are down.”
In his convention speech, Mr. Carney vowed to retaliate against Trump tariffs with countermeasures that will have “maximum impact in the U.S. and minimum impact” in Canada.
“My government will keep the tariffs on until the Americans show us respect,” he said. “In the meantime, we will ensure that all proceeds from our tariffs will be used to protect our workers.”
During the leadership campaign, Mr. Carney said he would move to diversify trade and seek new trade and security alliances in Europe and Asia. He also pledged to get more oil and natural gas to global markets, develop nuclear power and critical minerals needed for a modern economy, and aggressively bring down internal trade barriers to make the economy more competitive.
Former Liberal finance minister John Manley said Mr. Carney is right to focus less on Mr. Trump and more on reminding Americans that the President’s policies will hurt them in the long run. He is also on board with Mr. Carney’s plan to make the Canadian economy less dependent on the U.S.
“We are dealing now with somebody who is volatile, unpredictable and for reasons unknown very dark and angry about Canada,” he said of Mr. Trump. “The only way to control this is not through diplomacy because he doesn’t care, so he has to see a political cost to his whole country.”
Goldy Hyder, president of the Business Council of Canada, said the election of Mr. Carney will not change the Canada-U.S. relationship other than Mr. Trudeau’s departure as Prime Minister later this week.
“Expect chaos and uncertainty to continue,” he said. His advice to Mr. Carney is to stand firm, prepare for some pain but don’t overreact.