Explained: How Mark Carney is trying to reassure Canadians after Trump’s tariff threats | Business
Prime Minister Mark Carney is trying to project calm and control after US President Donald Trump raised tariffs on Canadian imports by another 10%. The escalation, triggered by a provincial TV ad during the World Series, has reignited the trade tensions that Carney had hoped to cool.
The big picture
The US and Canada are once again on the brink of a full-scale trade war. Trump’s latest tariffs come after Ottawa and Washington had already been negotiating a truce over previous trade restrictions. This time, the spark wasn’t steel or lumber, but a one-minute television spot from Ontario invoking Ronald Reagan to criticise American protectionism.
For Carney, the political optics are tricky. He must reassure Canadian businesses and consumers while showing the US that Canada will not be bullied by sudden outbursts from the White House.
Driving the news
Trump announced a 10% hike on Canadian imports after an Ontario government-funded ad aired during Game 1 of the World Series. The ad used 1980s footage of Ronald Reagan criticising tariffs, something Trump claims was taken “out of context.” He demanded the ad be pulled “immediately” and accused Canada of running “fraudulent” propaganda.Ontario Premier Doug Ford said he would remove the ad after the weekend, but the damage was done. Trump abruptly broke off trade talks and announced the tariff increase.
Carney’s response
Speaking from Kuala Lumpur, where he’s attending the ASEAN Business and Investment Summit, Carney said his government is “ready to resume trade negotiations” and will unveil an “ambitious budget” in two weeks featuring “generational investments” in the domestic economy.He emphasised diversification, shifting Canada’s trade focus toward Asia to reduce reliance on the United States, which he described as an “unpredictable and unreliable partner.” Carney also confirmed plans to finalise a free-trade deal with ASEAN nations by next year, along with a parallel pact with the Philippines.In an apparent dig at Trump, Carney said:“It underscores the importance of reliable partners who honour their commitments.”
What’s behind Trump’s anger?
Trump’s reaction appears less about economic policy and more about optics. The 60-second Ontario ad was produced and paid for by the province, not Ottawa, but Trump viewed it as an affront to his trade policies.In Reagan’s original 1980s radio address, he actually defended certain tariffs on Japan but warned that widespread protectionism hurts Americans. The Ontario ad highlighted only the latter point, leading Trump to claim it misrepresented Reagan’s message.
Tariffs so far
The US under Trump has already imposed a range of levies on Canadian exports:
- 50% on steel and aluminium
- 25% on automobiles
- Over 45% on softwood lumber (after an additional 10% hike)
- 35% on trade outside the USMCA
- 25% tariff on trucks starting November 1, alongside new levies on pharmaceuticals and furniture
Canadian industries are reeling, with the automotive, lumber, and manufacturing sectors hit hardest.
Domestic reaction in Canada
Flavio Volpe, head of the Automotive Parts Manufacturers’ Association, called the new tariffs “unprovoked and unwarranted,” warning that they will raise costs for US consumers more than Canadians.Jason Kenney, former Alberta premier, defended the Ontario ad as a faithful replay of Reagan’s remarks.Goldy Hyder, CEO of the Business Council of Canada, criticised provincial freelancing on foreign policy:“You don’t see governor after governor on television… Canada can’t have premiers freelancing on the US relationship.”Carney used similar language, stressing that only the federal government conducts international trade talks.
The road ahead
This is the second time Trump has walked away from talks with Canada this year. In June, he halted negotiations after Ottawa passed a digital sales tax on US tech firms, resuming only after Carney repealed the measure.Carney’s challenge now is balancing economic reassurance at home with diplomatic composure abroad. He must convince Canadians that their government can weather Trump’s volatility while proving to Washington that Canada will not be drawn into political theatrics over a one-minute ad.
Bottom line
Carney’s message is clear. Canada will not be hostage to Trump’s temper. His plan is to build resilience at home, expand markets abroad, and wait for the storm to pass. For now, though, the price of political theatre is another 10% at the border.
