New Canadian leader’s balancing act: Negotiate with and fight Trump

OTTAWA, Ontario – Mr Mark Carney, Canada’s soon to be prime minister, weathered two era-defining implosions in his career as a central banker: the 2008 global financial crisis and Brexit.

He has dealt with political chaos, societal upheaval and economic meltdown.

Now he faces what is arguably the challenge of a lifetime: Mr Donald Trump.

Can Mr Carney negotiate with the US President over tariffs and other combustible issues and find room for compromise, while trying to win a federal election on a full-throated anti-Trump platform?

Mr Carney was elected on March 9 as leader of the Liberal Party and, in line with Canada’s parliamentary political system, will be sworn in as prime minister, marking the end of the Justin Trudeau era.

His acceptance speech was barely celebratory. Instead, it was more of a war cry.

“America is not Canada, and Canada never, ever, will be part of America in any way, shape or form,” he told party faithful on the night of March 9 in Ottawa, referring to Mr Trump’s threats to make Canada the 51st state.

“We didn’t ask for this fight, but Canadians are always ready when someone else drops the gloves.”

A bigger battle looms

Mr Carney’s fighting words ignited the audience and tapped into deeply felt anger across the country towards Mr Trump, his decision to impose tariffs on Canadian goods and the danger he is seen to represent to Canada and its prosperity.

The 59-year-old former governor of the Bank of Canada and Bank of England is presenting himself as the man Canada needs right now.

Mr Carney’s pitch to Canadians is that his background in finance and his experience dealing with enormous global challenges and working with powerful figures have prepared him to be an expert, steady and seasoned steward of the country as it navigates a crisis in its relationship with the US.

“Everything in my life has prepared me for this moment,” he said on March 9.

His party clearly believes that. In the leadership race on March 9, members rallied behind him, handing him a resounding victory. He won 85 per cent of the votes.

It is a rapid rise to the helm of the country for a man who spent much of his career in high-profile but unelected public sector roles, mostly outside his home nation.

His next battle will come quickly, and it will be bigger and tougher than the electoral campaign he just won.

Mr Carney is likely to call federal elections soon because he does not hold a seat in Parliament and his party has only a minority number of seats in the House of Commons.

Between now and election day, which could be just weeks away, according to three people familiar with Mr Carney’s thinking, he will try to perform a tough balancing act to try to win the federal election.

The people did not want to be identified speaking publicly about Mr Carney’s plans.

He will put taking on Mr Trump at the heart of his campaign while negotiating with the American President over tariffs and other demands, such as access to protected markets like dairy and the lowering of taxes on US goods sold in Canada.

And he will try to convince Canadians watching closely that he can do both.

Stunning upset

Mr Trudeau’s decision to step down and Mr Trump’s aggressive rhetoric and policies have given Mr Carney an unexpected opening.

In January, the Conservative Party, led by Mr Pierre Poilievre, solidified a lead of more than 20 percentage points over the Liberals in polls, with many voters frustrated with Mr Trudeau’s stewardship.

But that gap is rapidly closing. Mr Carney’s ascent seems to have been turbocharged by the fact that many Canadians are seeking an expert in the economy rather than a politician.

Mr Poilievre has understood the political potency of Mr Trump’s threats for Canadians and has started promoting himself as anti-Trump, even though many Trump supporters also like Mr Poilievre and the two men have some ideological affiliations.

“Pierre Poilievre’s plan will leave us divided and ready to be conquered,” Mr Carney said on March 9. “Because a person who worships at the altar of Donald Trump will kneel before him, not stand up to him.”

Last week, several polls showed that the Liberals under Mr Carney could tie with or even narrowly defeat Mr Poilievre’s Conservatives.

Dr Darrell Bricker, a seasoned pollster, researcher and chief executive of Ipsos Global – Public Affairs, an opinion research and consultancy firm, said he had never seen such a stark and swift political shift anywhere in the world.

The election is very much up for grabs, Dr Bricker added, and Mr Carney’s challenge will be to avoid trying to be something he’s not: a politician.

“Actually, the act of governing is the Carney campaign,” Dr Bricker said. “His proposition is ‘I’m the man who can manage in a crisis. We’re in a crisis, let me show you how I manage it.’”

A reboot with Trump?

Governing will inevitably mean dealing with Mr Trump.

The US has imposed some tariffs on Canadian goods, while others are on a reprieve until early April.

Next up are 25 per cent tariffs on Canadian steel and aluminium exports to the US, scheduled to go into effect on March 12.

Financial markets are in turmoil amid the uncertainty, damaging Canada’s economy.

Mr Trump, in conversations with Mr Trudeau, has made it clear that his list of economic grievances is long and includes industries such as dairy and banking, where the US faces barriers to competing in Canada.

Mr Trump and his advisers have also raised issues that cut to the very heart of Canada’s sovereignty, including revising a border treaty and water-sharing agreements between the two nations.

The collection of threats amounts to a watershed moment for Canada.

“Donald Trump has put unjustified tariffs on what we build, on what we sell, on how we earn a living,” Mr Carney said on March 9. “He’s attacking Canadian workers, families and businesses. We can’t let him succeed.”

Mr Carney has offered a glimpse of what he is planning to do in dealing with Mr Trump, and it includes imposing more retaliatory tariffs on US goods and using the proceeds to support Canadian workers and businesses harmed by the rupture in the relationship.

But he has also said that he wants to start negotiating “free and fair trade” between the two nations.

Mr Trump and Mr Trudeau had a poor relationship during Mr Trump’s first term that only got worse in recent weeks.

Mr Carney’s supporters and advisers hope that he will be able to reboot the dynamic with Mr Trump and establish better chemistry to the benefit of Canada.

While it may not change Mr Trump’s agenda, it could put Canada on a different footing as it tries to protect its economy and sovereignty. NYTIMES