Now is the time to 'talk, not hit back': How Mark Carney's trade focus with the U.S. has shifted

Prime Minister Mark Carney has clearly shifted away from the assertive U.S. trade stance seen on the campaign trail seven months ago to a more cautious, conciliatory approach.

As trade tensions continue, Carney has declined to impose retaliatory tariffs in response to Trump’s protectionist measures. Instead, he and his government have pursued low-key ongoing negotiations, focused primarily on key Canadian sectors such as aluminium, steel and autos.

Editorials and commentators have leapt on this shift, arguing that Carney has softened and is now more “elbows down” than “elbows up.”

This month, Carney announced that Canada is “not considering hitting American goods with more retaliatory tariffs ,” despite the U.S. maintaining heavy tariffs on Canadian steel, aluminum, automobiles and lumber. He stated that with high-level negotiations with Washington ongoing, retaliatory measures could jeopardize any progress .

Meanwhile, Ontario Premier Doug Ford and several labor organizations have urged Carney to retaliate, arguing that job losses and slowing investment demand a firmer response to Trump. But Carney has expressed in his public comments that there is a time to hit back and a time to talk, and “now is a time to talk.”

It may pay off. According to a report by Bloomberg News on Thursday, the Trump administration is poised to ease auto tariffs. The report states the Department of Commerce is set to announce a five-year extension of an arrangement that allows American automakers to reduce what they pay in tariffs on imported car parts. Carmakers have engaged in months of lobbying for relief from Trump’s tariffs.

Removal or easing of auto tariffs would reduce the cost of cross-border vehicle trade and help Canadian automakers maintain their manufacturing footprint. It could safeguard thousands of jobs and enhance Canada’s position as an essential supplier within the auto supply chain.

This week, Bloomberg published an interview Carney did with Mishal Husain, editor at large for Bloomberg Weekend.

He acknowledged Trump’s actions and the intensifying trade war made his federal election candidacy as prime minister “more relevant.” Then he went on to underline the demands he and key ministers will face when the Canada-U.S.-Mexico free trade agreement takes over trade discussion in the coming months: “There will be a renegotiation of some elements … because the president has signalled that desire.”

In response to his shifting stance on the U.S., Carney was quick to point out that Canada was the only country, other than China, to initially impose retaliatory tariffs.

Regarding backing off on the digital service tax, he shared what he thought was the positive result: “Within weeks, the president confirmed, in an executive order, tariff-free status for the vast majority of our trade.”

When asked whether he has learned anything from his dealings with President Trump, he responded: “I’ve learned lots of things from President Trump.”

And added: “I don’t fully subscribe to this, but I see the effectiveness, the value of ‘flooding the zone,’ of doing multiple things at the same time. I think that he has a very effective way, in his own almost unique manner, of framing issues and of dominating the agenda.”

Early evidence of Carney’s shift came in September, when Ottawa lifted previously imposed counter tariffs on most U.S. imports . Canada’s counter tariffs on steel, aluminum and automobiles have remained as intensive negotiations continue, due to the U.S. maintaining tariffs on these sectors. The intention behind that turnaround was to encourage progress in trade talks.

During his late- September visit to New York for the UN General Assembly and the Council on Foreign Relations, Carney pitched Canada as a dependable trading ally and defended Canada’s global trade independence, saying Canadians “will not wake up checking U.S. policy feeds to know where we stand” and instead must “be masters in our own house.”

Recent polls show mixed views of Carney’s leadership.

An Angus Reid Institute survey from mid-October, showed a drop in Carney’s personal approval for the first time since taking office, while support for Carney’s Liberals was shown to be deadlocked with the Conservatives. 

An Ipsos poll from early October found a pproval of the Liberal government under Carney sitting at 58 per cent, 10 points higher than the government’s approval rating in April, prior to Carney’s election. If another federal election was to be held at that moment, the Liberal Party would hold a four-point lead in the decided vote over the Conservatives, a result close to the popular vote during the election.

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