May 2, 2025 | Mark Carney Faces His Biggest Challenge

Prime Minister Mark Carney will meet President Donald Trump soon to try to convince him to amend or remove the punishing tariffs that he has imposed on Canada.

Will Mark Carney succeed in building a mutually beneficial relationship between these two close allies?

Carney has a long history of leadership with Goldman Sachs, the Bank of Canada, the Bank of England, Brookfield and Bloomberg where he was dealing with difficult personalities at the highest levels of business and government. And now he faces the biggest challenge of his career with the stakes higher than they’ve ever been.

It’s likely that he’s never dealt with a personality more mercurial and impulsive than Trump.

As George Osborne, Chancellor of the U.K. when Carney was governor of the Bank of England, said of Carney:

There is “no one you would want more to send into the West Wing of the White House …  into the bear pit”.

Financial Times April 13, 2025, Ilya Gridneff

Stephen Harper, former Prime Minister of Canada, endorsed the Conservative leader, Pierre Poilievre, during the election but Harper should perhaps be thanking Carney for helping insulate Canada from the worst of the 2006-2009 financial crisis that devastated the U.S. banking industry. Canadians and their banks survived relatively unscathed. Carney was governor of the Bank of Canada from 2008 to 2013.

Stephen Harper, Jim Flaherty (Finance Minister) and Mark Carney 2009 First Ministers’ meeting in Ottawa. Source: Canadian Broadcasting Corporation

In any case, Canada now faces a much bigger crisis in the form of a trade war with the Trump administration. Canada is much more vulnerable than other countries since trade with the U.S. is more than 30 percent of Canada’s GDP or 76% of exports.

Source: Statistics Canada

For comparison, China’s trade with the U.S. is just 3 percent of its GDP, while Vietnam-US trade is more than 20 percent.

So, Canada must find a way to deal with U.S. hostility on trade and the punitive tariffs imposed by Trump.

The day after the election Trump and Carney spoke on the telephone, making a date to meet “within a week”, according to Trump.

Carney’s position during the campaign was that it will be necessary to forge a new economic and security relationship between the two countries. The terms of the existing United States-Mexico-Canada Agreement, which was supposed to guarantee a mostly tariff-free zone, has been violated by the U.S.

According to the Globe and Mail on April 30, Carney described the current state of the relationship during the campaign. He said (the U.S.) “had betrayed Canada with its protectionist tariffs and talk of annexation.”

So far, Trump is shrugging off those comments saying that Carney was “running for office”, and that Carney “couldn’t have been nicer” and predicted that “we’re going to have a great relationship”.

When thinking about Donald Trump’s relationships with other leaders, one must wonder how long Trump will play nice.

This “negotiation” will be fascinating.

Hilliard MacBeth

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Hilliard MacBeth May 2nd, 2025

Posted In: Hilliard's Weekend Notebook

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