Photo by World Economic Forum from Cologny, Switzerland via Creative Commons

Amidst the beginnings of a global trade war, former central banker Mark Carney was sworn in as the 24^th Prime Minister of Canada on 14 March 2024. Succeeding Justin Trudeau as the Liberal Party leader, Carney faces a stark reality: in order to preserve the strength of the Canadian economy, he must negotiate on harsh tariffs recently imposed by US President Donald Trump.

Who is Mark Carney?

Hailing from Fort Smith, Canada, Carney is a citizen of Canada, Ireland, and more recently, the United Kingdom. Despite never having held political office, the Liberal leader possesses a wealth of unique experience in financial affairs. He studied economics at both Harvard University and Oxford university before beginning his career in the private sector at Goldman Sachs, where he eventually became the Managing Director of Investment Banking. In 2003, he was appointed deputy governor of the Bank of Canada (BOC) but was shortly transferred to the Department of Finance in 2004.

Carney returned to the nation’s central bank, and was appointed governor in February 2008, immediately reducing interest rates due to the Great Recession. Carney later served as the first non-Briton governor of the Bank of England (BoE), where he is ‘credited with modernising the Bank, appearing much more frequently in the media than his predecessor.’ Carney completed his term at the BoE in 2020.

With Carney replacing Trudeau, the new PM’s time in office will be short-lived: according to theCanada Elections Act, the next official election must be held by 20 October 2025. On 20 March, the prime minister announced plans to hold the election on 28 April. Carney will be required to put himself forward for a seat in the House of Commons, as he is the first prime minister to have never served as a member of Parliament. According to national polling data published by the Canadian Broadcasting Corporation (CBC), Conservatives have an overall narrow lead over the Liberals, though recent polls published suggest the Liberals are in the lead nationally. The outcome of the election is likely to depend on how Carney handles the intensifying global trade war, particularly as it relates to the US tariffs.

US tariffs on Canadian imports

Trump‘s tariffs on Canada (among other nations) have been described as “constantly shifting.” On 1 February 2025, Trump ordered a 25 per cent tariff on almost all Canadian goods. Three days later, he agreed to pause the tariff for a month, while simultaneously threatening the EU with new tariffs. The tariff on Canada resumed and went into effect on 4 March, and the day prior to this, Trudeau imposed retaliatory measures, imposing tariffs of 25 per cent on $155 billion of American goods.  

During his first term, Trump introduced similar tariffs on Canadian goods and many of his second term tariffs have either been postponed or suspended entirely. Despite the economic downturn that occurred after the tariffs went into effect, Trump stated that his tariff reversals were unrelated to the market.  On 5 March, Trump put a one-month pause on Canadian automobile tariffs; on 12 March, he imposed an additional 25 per cent tariff on Canadian steel and aluminium imports. He has even threatened to raise these tariffs an additional 25 per cent.

Doug Ford, Ontario’s premier, introduced (and shortly reversed) a retaliatory surcharge of 25 per cent on electricity transmitted to the US. The surcharge would have largely impacted Canada’s closest American neighbours: New York, Michigan, and Minnesota. In conversation with the press, Ford explained the following: “If the United States escalates, I will not hesitate to shut the electricity off completely…It’s one person who’s responsible. That’s President Trump.”

Carney’s Response & Plan

Carney’s response to Trump’s tariffs is like that of Ford’s – he has no intention to back down anytime soon. As Canada and the US enjoy the world’s most comprehensive trading relationship, it is crucial for the sake of both nations’ economies to preserve these relations. Two days before he was sworn in, Carney stated that he is “ready to sit down with President Trump at the appropriate time, under a position where there’s respect for Canadian sovereignty and we are working for a common approach, a much more comprehensive approach for trade.”

The prime minister’s emphasis on Canadian sovereignty comes after Trump’s threats to annex Canada, noting that the country will become the “cherished Fifty First State.” In his first speech after being sworn in as prime minister, Carney told reporters that “We will never ever, in any way shape or form, be part of the United States. America is not Canada… we are very fundamentally a different country.”

Carney has yet to announce additional retaliatory measures against the US, and he only plans to do so if Trump fails to express respect for Canadian sovereignty. Rather, Carney has chosen to prioritise Canada’s relationship with the EU and other Commonwealth nations, particularly the UK and France – two colonial powers that were deeply rooted in Canada’s early existence. During his first week as prime minister, Carney visited London and Paris, and met with King Charles III, British prime minister Keir Starmer, and French president Emmanuel Macron. Dubbing Canada as “the most European of non-European countries”, Carney has expressed the significance of strengthening relations with “reliable allies.” King Charles, Starmer, and Macron indicated their support for Canada amid the nation’s ongoing trade war with the US.