How does Mark Carney's position influence Canada's trade policy and deal-making?
Executive summary
Mark Carney as prime minister is actively reshaping Canada’s trade policy: his government has imposed protective measures for steel, aluminum, lumber and autos, set a target to double non‑U.S. exports over the next decade, and is pursuing diversification and new trade partnerships with the EU, CPTPP members and other markets [1] [2] [3]. He combines protective industrial policy (tariffs, quotas, Buy Canadian) with diplomatic outreach aimed at deepening ties beyond the United States [1] [3] [4].
1. A politician turned deal‑maker: From central banker rhetoric to industrial policy
Mark Carney’s trade posture blends active market interventions with diplomatic deal‑making. His government has announced curbs on steel imports, new tariffs and freight supports for steel and lumber, and a Buy Canadian policy for large federal contracts to prioritize domestic materials [1] [5]. At the same time, Carney is pursuing statecraft at summits and bilateral meetings — advancing a plan to link CPTPP economies with the EU and to expand investment ties — indicating a two‑track approach: shield and then pivot [3].
2. Protection first: concrete measures to blunt U.S. tariffs and protect jobs
Carney has explicitly positioned the federal government to protect workers and industries hit by U.S. tariff actions. Announcements include quotas and surtaxes on certain steel imports, a global tariff on steel derivative products, and funding to support workers through work‑sharing and training; the government framed these as necessary responses to U.S. actions and “non‑market practices abroad” [5] [1]. Officials say such measures will protect jobs, invest in industrial competitiveness, and encourage domestic sourcing [6] [1].
3. Diversify or double down: the non‑U.S. export strategy
Carney has set an explicit ambition to double Canada’s non‑U.S. exports within a decade, pitching diversification away from a historically U.S.‑centric export mix as a strategic imperative after recent U.S. tariff moves [2]. The government is pursuing energy pipelines to reach Asian markets and signing MOUs to reroute oil and gas flows — concrete moves to shift trade patterns away from sole dependence on the U.S. market [7].
4. Diplomatic outreach: trading with friends, courting blocs
Beyond unilateral industry supports, Carney is actively courting large trading partners and blocs. At the G20 he discussed bringing together the Asia‑centred CPTPP and the EU to strengthen supply chains and expand trade; official communications highlight bilateral talks with EU leadership and CPTPP chair candidates as part of a strategy to “catalyse investment” and build new trade pathways [3]. Opinion and reporting note Carney’s success in normalizing ties with other major markets and securing new investment and defence links [8].
5. Tactical concessions to limit economic damage
Carney has also shown tactical flexibility: he lifted retaliatory tariffs on many U.S. goods covered by CUSMA while retaining measures on autos, steel and aluminum — a move analysts framed as a pragmatic effort to minimize broader economic harm while keeping leverage where Canadian industries remain exposed [9]. His government frames selective tariff removal as consistent with treaty commitments and economic damage control [9].
6. Political constraints and domestic signalling
Domestic politics shape Carney’s trade calculus. He faces pressure from industry groups and opposition politicians over urgency and effectiveness of talks with the U.S.; Conservative critics have publicly faulted his handling of negotiations [4]. At home, measures such as Buy Canadian and targeted supports (over $100 million for work‑sharing and training) are explicit signals to voters and affected provinces that the federal government will prioritize domestic jobs and industrial capacity [1].
7. Risks, tradeoffs and unanswered questions
Carney’s dual strategy—protection for vulnerable sectors plus aggressive diversification—carries tradeoffs. Protective measures raise costs for manufacturers who rely on imported inputs and could spur retaliation or supply disruptions; government notes that over 60% of steel used by Canadian manufacturers in 2024 was imported [5]. Available sources do not mention the detailed economic modelling behind the “double non‑U.S. exports” target or full contingency plans if U.S. tariffs escalate further; those specifics are not found in current reporting (not found in current reporting).
8. Bottom line: reshaping dependence into leverage
Carney is reframing Canada’s trade policy from reliance on a single ally to a blended strategy of shielding key sectors while actively wiring Canada into new markets and blocs. He is using tariffs, quotas and procurement rules to protect and rebuild domestic capacity even as he pursues diplomatic and commercial linkages with the EU, CPTPP members and Asian markets to diversify exports and investment [1] [3] [2]. That combination aims to convert short‑term protection into longer‑term leverage for Canada on the global stage.