The News
Canada’s new Prime Minister Mark Carney met US President Donald Trump Tuesday at the White House, marking the Canadian leader’s first foreign visit since his electoral victory based around a campaign promise to stand up to Trump.
Carney has said he hopes to forge a new bilateral economic and security relationship with Washington, and this first in-person meeting with Trump represents an early test of that ambition.
Canada is “not for sale,” Carney told Trump Tuesday, even as the US president repeated his taunt that Canada should become the 51st state.
“Canadians expect that [Carney] will not be subservient,” one expert told Time Magazine: “If Trump gets out of line ... it’s Carney’s job to shake his head and say, ‘Well, no, I don’t agree.’”
SIGNALS
Canada looks beyond Washington for trade partners
Donald Trump’s frequent attacks on Canada have led many Canadians to call for the country to reduce its reliance on the US and deepen relationships with other Western nations. Three former Canadian trade ministers told The Globe and Mail that Carney’s government could do more to engage with markets in Europe and Southeast Asia, regions where Canada has made recent trade agreements but where import-export flows remain limited, in part because the infrastructure to do business as seamlessly as with the US is lacking. Canada’s foreign minister has said Ottawa needs to “diversify, not only the trade side, but also on the security front”: Ottawa has been weighing the purchase of fighter jets and other military equipment from Europe rather than the US.
Trump’s tariffs on Canada are hurting American companies
Donald Trump’s tariffs have huge repercussions on North American economies, costing US firms billions. According to one model, if Canada and Mexico responded with 25% duties on the US, it would lower GDP and increase inflation across the continent. And Canadian firms are growing increasingly reluctant to make investments in the US: “If you are a smart … business person, you are not going to jump right back into another arrangement where you are totally reliant on a US partner,” a Canadian export consultant said. One Canadian analyst told CBC it would be smart to wait: “Trump feels like he has all the cards. If we settle … it wouldn’t be a good deal for Canada.”