Canada's Trade Strategy Under Pressure: Will Carney Stand Firm Against Trump?

As negotiations over a new trade deal with the U.S. intensify, questions arise about whether Carney can maintain Canada's position without conceding too much to Trump.

Tensions between Canada and the United States have surged once again as President Donald Trump threatens a staggering 35% tariff on Canadian goods to take effect next month. This aggressive stance comes during crucial trade negotiations aimed at achieving a favorable deal for Canada, prompting scrutiny of Prime Minister Mark Carney's ability to effectively represent Canadian interests against Trump's formidable bargaining tactics.

Elected in April, Carney pledged to maintain an assertive posture—the metaphor of "keeping his elbows up" reflects a confrontational approach inspired by ice hockey. However, recent concessions made by the Canadian government have led to questions about the effectiveness of this strategy. While Carney's administration has made notable concessions to appease the Trump administration, such as scrapping planned Digital Services Tax (DST) for major tech companies, critics argue that these moves have produced minimal gains.

Commentators, including Robyn Urback, have suggested that Carney's approach may be fluctuating between aggression and concession, described as a “chicken dance.” Political science expert Blayne Haggart has also expressed skepticism about Carney's "comprehensive" strategy in negotiations, noting that the policies have resulted in "less than nothing."

Nonetheless, many Canadians remain supportive of Carney's government despite the challenges. Roland Paris, a former advisor on Canada-U.S. relations, cautions against prematurely judging the concessions until the final agreement is evaluated. “If Carney ultimately appears to have surrendered too much, he may face serious political consequences,” he warns.

Carney's administration has previously attempted to meet Trump's demands through fiscal pledges such as allocating C$1.3 billion for border security and addressing Trump's concerns over drug trafficking. Despite these efforts, Trump's latest letter reiterates his demands, even as he escalates tariffs on steel and aluminum imports.

In response to these pressures, Carney insists that Canada will continue to negotiate on its terms, though the new tariff threat looms over the impending deadline for agreement—which was shifted from July 21 to August 1. Fortunately, the current tariff implementation will not yet affect goods traded under the US-Mexico-Canada Agreement (USMCA), which constitutes a significant portion of commerce between the two nations.

Across political lines, Canadian leaders and citizens unite in opposition to Trump's proposed tariffs. Conservative leader Pierre Poilievre emphasized the party's commitment to securing a beneficial deal for Canada, while British Columbia's Premier David Eby stressed the necessity of national unity in response to external pressures.

Experts also advocate that Canada possesses its own leverage in the negotiations despite its smaller economic size, reminding that American consumers are ultimately the ones burdened by tariffs. Furthermore, many U.S. manufacturers depend on Canadian resources like steel and aluminum, which currently face their own extensive tariffs.

In light of Trump's unpredictability, Canada’s Industry Minister, Melanie Joly, assured that the government is managing the situation judiciously. “We do not negotiate in public,” she stated, emphasizing the necessity of maintaining a strategic approach in a volatile political climate.