Canada’s new Prime Minister Mark Carney is a financial wizard who sounds like a wartime leader, because now he is, thanks to President Trump’s 25-percent tariff on our northern neighbors.
Canada’s Conservative party, which identified with Trump, was rapidly rising in the polls, while Mr. Carney’s party, the Liberals, were declining. Not anymore.
“I know these are dark days. Dark days brought on by a country we can no longer trust,” Mr. Carney said upon taking leadership following a Liberal Party election to replace Justin Trudeau, the prime minister who resigned rather than face the voters again.
Mr. Carney is an economist who ran Canada’s central bank before taking over leadership of the United Kingdom’s central bank. Because of his demonstrated competence Mr. Carney has been recruited as a political candidate for years. “Why not become a circus clown,” was Mr. Carney’s response. He was the only Liberal leadership candidate without political experience, but the challenge facing Canada now is financial, and no other candidate could match that record.
To quickly strengthen the Canadian economy Mr. Carney immediately canceled a carbon tax on consumers and stopped a hike in the capital gains tax.
Prime Minister Carney correctly characterizes the Trump tariffs as an attempt to weaken Canada. President Trump told his Cabinet on Friday, “the tariffs will make it impossible for them to sell cars into the United States. The tariffs will make it impossible for them to sell lumber or anything else into the United States.”
The trouble with that line of thinking is “them” is Stellantis, Ford, and General Motors, who have an integrated continental supply chain working well under a trade agreement negotiated during the first Trump administration. Furthermore, higher cost Canadian lumber will add expense to housing construction and slow already sluggish sales.
Worst of all, the emergency tariff power assumed by President Trump is based upon the fallacy of a fentanyl crisis that is a nonissue on the northern border. The Wall Street Journal Editorial Board has called for a lawsuit to challenge the President’s authority to impose the Canadian tariff without an act of Congress. It would be politically astute for Great Lakes Democrats to take that case to court.
The U.S. stock market is falling fast on the rising odds of a trade war as investors understand Canada can also inflict serious economic pain.
President Trump has caused severe political pain for Canadian conservatives who were on a glide path to take over national leadership until the country unified behind outrage at U.S. bullying tactics.
Now, Liberal party leader Carney is expected to quickly call a general election while the issue shifts from a decade of economic stagnation to which party is best able to battle Trump.
There is universal agreement in Canada that the Trump tariffs are sure to cause a recession.
It has steeled their national resolve to inflict a recession here as well. With an international finance expert leading the country Canada will hit back with resolve and know how.
Just three weeks ago U.S. market indices touched record highs as investors calculated President Trump was too investment-oriented to risk tanking stocks with a trade war against a close ally like Canada.
A big reason for the falling market is a reassessment of the risk caused by President Trump’s willingness to wage economic war on longtime friends and America’s largest trading partner, and in the unwillingness of the political system to challenge his unilateral authority to take this action.
First Published March 12, 2025, 4:00 a.m.
