SerpApi.Org
TORONTO—Prime Minister Mark Carney swept to power promising an “elbows out” stance against President Trump’s tariff threats and rhetoric, vowing he would never accept a bad trade deal.
Sixteen months later, Carney says he has avoided making a bad deal but critics say it has come at a cost: A series of trade concessions to the U.S. that are beginning to add up.
Carney has scrapped a digital-services tax affecting U.S. tech companies, rolled back retaliatory levies and halted streaming regulations opposed by American companies.
Most recently, Carney agreed to hand over half of Canada’s net revenue from the new Gordie Howe International Bridge to a U.S.-controlled fund for the first 15 years and to give the U.S. a say over some toll rate changes. An earlier deal said Canada, which paid for the bridge, would split the revenue with Michigan only after it had recouped the costs.
Yet the retreats have done little to appease Washington. On Monday, Trump threatened a 50% tariff on roughly $20 billion in Canadian goods, representing about 5% of Canada’s U.S.-bound exports, using a Depression-era law over alleged unfair trade practices.
“President Trump is wrong to target Canadian workers and must reverse these tariffs immediately,” Shuvaloy Majumdar, a Conservative lawmaker, said in a statement. “And Mark Carney was wrong to surrender Canada’s leverage for over a year and a half, without actually working to secure the deal he promised.”
As the leader of an export-dependent economy, Carney is trying to walk a tightrope, yielding ground to secure tariff relief while attempting to retain enough leverage to protect Canadian sovereignty. The gamble is clear: More concessions pose political risks at home, but standing firm could mean economic warfare with a partner Canada can’t afford to lose.
Carney’s experience mirrors that of leaders from Brussels to Mexico City, where pre-emptive compromises have failed to buy immunity from Washington’s trade wrath. His dilemma is worsening.
Elevated uncertainty over cross-border commerce is dragging on Canada’s economy, yet there is little domestic patience for surrender without U.S. concessions in return. Polling by Abacus Data shows nearly 70% of Canadians want Ottawa to hold firm in negotiations, even if it prolongs economic pain. Only one in five favors further concessions to get a quick deal.
“The mindset of most Canadians right now is one where there is little appetite for anything perceived as giving in,” said David Coletto, chief executive of Abacus.
Carney said Tuesday that he and Trump had agreed to “intensify” trade talks ahead of Aug. 19, when the new tariffs are scheduled to go into effect.
Most of Canada’s concessions haven’t required that Carney spend much political capital. His approval ratings remain high and a majority of Canadians still see him as the person best placed to navigate trade turbulence.
But Carney has few good options going forward, according to trade experts.
“Will more concessions from Canada get the U.S. to ease off? I’m not totally sure that it will,” said Brian Clow, a former senior adviser to Prime Minister Justin Trudeau. “Canada has more than put water in its wine, but the Trump administration seems totally unsatisfied.”
Janice Charette, Canada’s chief trade negotiator to the U.S., has said that the Trump administration has been pocketing “significant” concessions from Canada and that it would be important to see “mutuality” moving forward.
But U.S. officials maintain that Ottawa’s pullbacks don’t warrant relief. “They really don’t get credit for doing something bad and then undoing it,” U.S. Trade Representative Jamieson Greer said last week at the Aspen Security Forum. “It’s just good practice on their part.”
Canada began making concessions to Trump even before he was sworn in for his second term as president. When shortly after the 2024 election Trump threatened tariffs over unsubstantiated claims of an “invasion” of fentanyl and irregular migrants from Canada to the U.S., Canadian officials announced a $900 million plan to strengthen the border. That didn’t stave off a first round of tariffs.
After Trump increased levies on Canadian steel and aluminum, Carney didn’t adjust Canada’s retaliatory duties. He rolled back many of the counter-tariffs imposed by his predecessor Justin Trudeau and apologized to Trump for an ad paid for by the province of Ontario that featured Ronald Reagan criticizing tariffs.
Ottawa halted measures that would have increased payments that U.S. streaming companies such as Netflix would have had to make to finance Canadian content. It cast the decision as part of an effort to address affordability issues, but U.S. officials had threatened retaliation over the regulations, and Canada’s film industry accused the government of selling it out to the U.S.
Carney has charted a distinctive course in international affairs and trade, traveling the world in search of new business partners that can help Canada lessen its dependence on the U.S. He has called for the world’s so-called middle powers to band together to avoid subordination to bigger powers such as the U.S. and China.
At the same time, Carney has sought to pitch a long-term vision of “Fortress North America”—deeper economic integration in some sectors between the U.S. and Canada. While Washington has praised the concept in theory, formal trade talks remain stalled, leaving Canada exposed to fresh economic shocks.
“The set of choices in front of the government are frankly very tough,” Clow said.
Many of the trade practices to which Trump is pointing to justify the latest tariffs are retaliatory measures that Canada took in response to his levies. Among them is a ban on U.S. alcohol imposed by the provinces, not the federal government. Analysts said Washington may be seeking to push Ottawa to force provincial leaders to drop the bans and foment divisions between the two levels of government.
But Carney has said it is up to the provinces to decide whether to reverse course and that, in his view, such a move should only be part of a broader, bilateral deal. Several provincial premiers argue the alcohol bans hit U.S. producers hard and give Canada rare leverage.
In May, Pete Hoekstra, the U.S. ambassador to Canada, said in a television interview that the bans were “unfair.” But ending them, he said, wouldn’t lead to an easing of U.S. tariffs.
Write to Amanda Coletta at [email protected]