Mark Carney seeks reset in Canada-US relations amid Trump tariff tensions
New Canadian prime minister begins term with call to Trump, faces pressure to rebuild trade ties while managing domestic expectations.
 |
| Canadian Prime Minister Mark Carney arrives at his office on Parliament Hill in Ottawa on April 29, 2025. Photo by Geoff Robins/AFP |
By Anna Fadiah and Hayu Andini
Mark Carney, newly sworn in as Canada’s prime minister, stepped into office Tuesday morning facing a critical diplomatic test: navigating the country’s strained relationship with the United States under President Donald Trump. The former Bank of Canada and Bank of England governor began his tenure by acknowledging the public’s anticipation of a dialogue with Washington. “We’ll see,” he told reporters with a smile before entering the prime minister’s office in Ottawa.
Despite his guarded response, Carney quickly followed up with action. Within hours of taking office, he held a phone conversation with Trump. According to officials from both sides, the call was described as “cordial,” with both leaders agreeing to meet in person in the near future — potentially as soon as the G7 summit in June, which Canada will host in the Rocky Mountain town of Kananaskis.
The momentous task ahead underscores why Mark Carney seeks reset in Canada-US relations. With voters still reeling from Trump’s tariff policies and aggressive rhetoric about Canadian sovereignty, Carney faces intense pressure to establish a new diplomatic footing without appearing to capitulate to American demands.
Trade relations top the agenda
Throughout his election campaign, Carney focused on reshaping Canada’s trade priorities, tapping into public frustration with the United States. He had repeatedly warned voters that the longstanding Canada-US relationship — particularly in trade and security — had fundamentally changed. That populist message helped him secure victory but now forces him to recalibrate expectations while seeking to reengage the White House.
Industry leaders were quick to remind the new administration of the stakes involved. Goldy Hyder, president of the Business Council of Canada, urged Carney to anchor his negotiations with Trump in the existing framework of the US-Mexico-Canada Agreement (USMCA). “Business leaders in all three countries agree that the agreement must continue to serve as the central mechanism for governing trade and investment,” Hyder said, calling it a pillar for dispute resolution and cross-border competitiveness.
There is growing concern across Canadian industries that uncertainty surrounding tariffs and trade rules has begun to erode investor confidence. The current $940 billion annual trade relationship between Canada and the United States relies heavily on stable, rules-based mechanisms — which Trump’s policies have repeatedly called into question.
Balancing domestic pressure with diplomacy
Although Carney won the election, he did so with a narrow margin and without securing a full parliamentary majority. Final tallies showed his party won the most seats but fell three short of forming a majority government. Carney is expected to negotiate a power-sharing agreement with the New Democratic Party (NDP), despite its weakened presence in Parliament. With only seven seats, the NDP could still provide Carney the legislative support he needs.
The prime minister’s balancing act extends beyond Parliament. His victory was built on promises of economic nationalism and retaliation against US-imposed tariffs, which have prompted Canadians to boycott American products and cancel cross-border travel. Yet now he must engage with the very administration responsible for those grievances.
President Trump has continued to stir tensions. On the same day Canadians headed to the polls, he posted on Truth Social urging them to vote for statehood under the United States — a move widely condemned as provocative. Meanwhile, US State Department spokesperson Tammy Bruce reiterated the rationale for tariffs, citing concerns over trade fairness, immigration, drug trafficking, and Chinese influence — all areas that Trump used to attack Carney’s predecessor, Justin Trudeau.
A shifting global strategy
In his early morning victory speech, Carney struck a bold tone, signaling a more assertive Canadian foreign policy. He promised to strengthen ties with “reliable partners” in Europe and Asia, while positioning Canada as a leader in energy, housing, and global trade.
“If the US no longer wants to be in the forefront of the global economy, Canada will,” Carney declared. “We are masters in our own home.”
His message resonated with voters eager for a more independent national posture, but economic realities remain. Over 70 percent of Canadian exports are still destined for the US, and the country is America’s largest foreign oil supplier. Rerouting that trade would require massive infrastructure investment and time.
Nevertheless, sectors such as oil, steel, and aluminum are already lobbying for measures to cushion the impact of tariffs or to find new markets. Lisa Baiton, chief executive of the Canadian Association of Petroleum Producers, stressed the need for expanded global reach. “Developing our world-class oil and natural gas resources to their full potential by growing our exports to international markets will strengthen our energy security and economic sovereignty,” she said.
Cabinet formation and internal challenges
Even as Mark Carney seeks reset in Canada-US relations, he must quickly form a new cabinet — a task that will require balancing rival factions within his party. Potential names include Trudeau-era figures such as Mélanie Joly and Dominic LeBlanc, as well as Chrystia Freeland, who ran against Carney for party leadership.
Observers are closely watching whether Carney will prioritize continuity or mark a clean break from Trudeau’s policies. His stance on the “green transition” and climate policy will be especially scrutinized given the energy sector’s hopes for support in expanding global exports.
Carney, though new to elected office, is not inexperienced. He brings a wealth of financial and economic expertise to the role. Former Indian central bank chief Raghuram Rajan, who has known him for two decades, praised Carney’s capabilities. “He is extremely capable, smart, and always well prepared,” Rajan said.
An uncertain but determined start
The road ahead will be anything but smooth. The US has thus far suspended reciprocal tariffs on select countries, including Canada, but only until July. After that, duties could increase again — directly impacting Canadian exports like smartphones, cars, and household goods.
If Carney cannot strike a new deal, the cost of these tariffs could be passed onto Canadian consumers and businesses alike. A reset in relations with Washington is vital, but so too is ensuring that Canada’s economy remains resilient and diversified.
For now, Carney’s government is leaning into the G7 summit as the key venue for formal engagement. But with trade, politics, and public sentiment all in flux, it remains to be seen whether the new prime minister can fulfill his pledge to chart a fresh course for Canada on the global stage — starting with the White House.
More from Canada coverage
- Mark Carney and Pierre Poilievre face off in crucial Canada election debate
- Canada boosts Arctic military presence amid rising global tensions
- Nine killed as car plows into crowd at Vancouver’s Lapu Lapu festival
