What are the costs of Canadian Prime Minister Mark Carney’s plan to pivot away from the U.S.? What might Canadians expect in the short term and what will it mean for the country’s future prosperity? These are big questions as the Carney government stumbles through trade talks and bouts of tariff announcements with Canada’s largest trading partner.
This week the Globe and Mail broke the news that a new trade deal between the countries on steel, aluminum, and energy could be ready to sign before the end of the month. Within a few hours Carney confirmed the possibility of a new sectoral tariff deal, while trade minister Dominic LeBlanc said there is no deadline for an agreement and still a lot of work to be done before any deal is signed. These conflicting signals had even CBC News speculating on the prime minister’s ability to keep the premiers’ competing trade interests in check: “As the trade war grinds on, Team Canada is getting restless.”
Canadians too are getting restless as a new Abacus Data opinion poll suggests there is a growing pessimism regarding the Carney government’s trade negotiation skills. The poll was taken shortly after Carney ingratiated himself beside U.S. President Donald Trump in the Oval Office and then returned from his Washington trip with no positive trade news. Faith is waning in Carney’s ability to deliver results for the country. Abacus stated, “expectations are low: only 14 per cent think the negotiations will yield a fair and stable agreement, while most (52 per cent) expect either real damage to the Canadian economy or a deal that still hurts key sectors.”
Despite the current public sentiment and media coverage, Carney remains confident in his economic plan for the country. The international business magazine The Economist recently profiled the prime minister in a feature that delved into Canada-U.S. relations and Carney’s strategy to build trade relationships that will exclude the U.S. In an article, “Mark Carney’s radical vision for handling Trumpian America,” the magazine identified Carney is “The Player of Games” who is leading “a new free-trade revolution.” This article highlighted the ideas raised in an interview that was conducted by editor-in-chief Zanny Minton Beddoes: “How is Canada coping with its increasingly unpredictable southern neighbour.”
In answer to Beddoes’s lead questions about the break in the country’s relationship with the U.S., Carney explained, “We went through a multi-decade period of steadily increasing integration with the United States, and to some degree with the rest of the world, and that process is over. That’s a rupture. That’s a change in a very quick period of time. The question is, where do we go from here.” Beddoes countered, “If that is a rupture, then it is surely going to take years, decades, to reorient the Canadian economy away from its reliance on supply chains with the U.S. and the U.S. consumer market” to which Carney stated, “… [we’ll be] building infrastructure at a pace and scale that we haven’t done for generations.”
Beddoes went on to ask about Carney’s plans to diversify trade, “You said at one stage that if the United States wanted to give up global free trade leadership, Canada is ready to lead.” The prime minister explained, “That is part of what we have been doing. We signed in June a comprehensive security partnership with Europe. We already have a comprehensive trade deal, but this is the next level of partnership which extends across digital, very importantly in defence – becoming part of SAFE Europe and Rearm Europe as a true partner. We’ve built those partnerships there. We just signed a comprehensive trade agreement with Indonesia, the fourth largest country in the world as you know, and a great growth economy. We are working on a trade deal with ASEAN, the ASEAN countries more broadly.”
Carney continued, “But if I bring it up to the higher level, how does the system evolve? So, yes a series of those types of deals, and many more, I won’t exhaust the time going through all of them… But, where are the big trading blocs that have the potential to establish a form of rules that is broadly consistent, away from the United States and away from China?”
Carney elaborated on what the new trading blocs would look like: “Certainty of products standards, labour standards, elements of sustainability and other standards moving towards that; not necessarily standards that the U.S. would put in a deal and that is their sovereign right. But you have more like minded forms of trade getting scale… I think, don’t know, but I think a degree of variable geometry of trade where you have tighter integration with countries that you share a broader range of values, basically concentric circles of integration, which does make sense.”
Then Beddoes pressed, “When you look at what has been happening in the last few months, all of these big countries have been falling over themselves to cut deals with the U.S.” Carney interjected with a wide grin, “Not all of them”, and Minton conceded, “Not all of them – not you. But the Europeans, the Japanese, everyone is saying, “Fine. Let’s just try and get the best deal for us with this large tariff-ladened U.S.”
The exchange between the two was revealing in just how sure Carney is of his plan. Beddoes stated, “The U.S. has all the cards, not only with the economy but with security. You can’t even defend the arctic by yourselves.” Carney replied, “There are other games. There is not just one game…. Yes we are going to spend more time to stay in the game with the United States. But we are going to play other games with other players.”
Carney’s trade strategy for Canada makes two huge assumptions: 1) the present volatile trade relationship with the U.S. will persist beyond Trump’s term – for decades, perhaps forever; and, 2) the country can build its industrial base and export infrastructure in short order, “at a pace and scale that we haven’t done for generations.”
On the prime minister’s point about positioning Canada as a trading bridge between the European Union and transpacific partnerships, The Economist noted, “But it will take years for investment and trade to build, and the trade shock is here today. Exports to the United States are down sharply compared with 2024, according to Statistics Canada. Two-thirds of Canadian manufacturers say they are experiencing tariff pain. Unemployment hit 7.1 per cent in August. In cities dependent on car manufacturing, such as Windsor, Ontario, it is running as high as 11.1 per cent. In the second quarter of 2025 Canada’s GDP fell by 0.4 per cent as exports to the United States collapsed.”
Statistics Canada’s current data reveal that Canada exports 76 per cent ($596.3 billion) of its goods and services to the U.S., and it imports 49 per cent ($377.5 billion) of goods and services from its southern neighbour. By comparison, Canada exports approximately four per cent to the European Union and imports 10 per cent. With the U.K., Canada exports less than four per cent and imports a little more than one per cent.
To continue this comparison of Canada’s trading figures against the expansive trade relationship the country has with the U.S., Canada exports under four per cent to China, while importing 12 per cent. With India, Canada exports less than one per cent and imports one per cent. Regarding that “game-changing” deal we just signed with Indonesia, Canada exports 0.3 per cent to that country and imports 0.4 per cent.
In Carney’s televised address to the nation on Wednesday evening, he repeated his dire analysis that the close relationship between the Canadian and U.S. economies is over. Carney stated that his government has set a goal of doubling Canada’s non-U.S. exports by 2035. The prime minister said, “We are re-engaging with the global giants India and China.” Carney estimated that in a decade from now this new trade will generate $300 billion annually.
As explained in The Economist interview, it is clear that card-shark Carney is “all in” on establishing trade arrangements apart from the U.S. But Canada’s current trade numbers, and the reality of the country’s industrial capacity and export capabilities all suggest this is a high stakes gamble. Doubling exports to China, India, and elsewhere in no way will offset the loss of potential that Canadian exporters will experience with the breakdown of our American trade relationship. Still, Carney has thrown his hand in and abandoned strengthening American business opportunities and the chance of a better trade deal with the U.S. in the hopes of cashing in with new trade deals in Europe, U.K., and China.
To extend this analogy, Carney’s card playing goes beyond trying to trump America; it appears he has already left the table. Since he became prime minister, Carney has made 11 trips to Europe and only three to the United States. The Carney government has also mused publicly of backing away from the purchase of American fighter jets; it has provided $1 billion loan to China shipyards to build B.C. ferries; and, the prime minister never misses an opportunity – including his Wednesday TV address – to pronounce Canada’s longtime relationship with its American partner is over.
Elbows up, elbows down, or otherwise, Carney’s trade strategy is quite a gambit for Canadians and our future prosperity given how many chips are on the Canada-U.S. table.
Next week: Canada’s new trade relationships with the E.U., U.K. and elsewhere.
Chris George is an advocate, government relations advisor, and writer/copy editor. As president of a public relations firm established in 1994, Chris provides discreet counsel, tactical advice and management skills to CEOs/Presidents, Boards of Directors and senior executive teams in executing public and government relations campaigns and managing issues. Prior to this PR/GR career, Chris spent seven years on Parliament Hill on staffs of Cabinet Ministers and MPs. He has served in senior campaign positions for electoral and advocacy campaigns at every level of government. Today, Chris resides in Almonte, Ontario where he and his wife manage www.cgacommunications.com. Contact Chris at chrisg.george@gmail.com.
