Mark Carney Goes to Washington
Carney says there will “not necessarily” be new tariffs, calls conversation “the end of the beginning” of Canada redefining its relationship with the U.S.
Prime Minister Mark Carney made his first trip to the United States since taking office for the start of extensive discussions between Canada and the U.S.. The Tuesday meetings were held to discuss a wide variety of issues affecting the two countries, especially trade. The U.S. has hit Canada with a range of tariffs targeting most of the country’s economy, especially the auto sector. Trump has also famously discussed annexing Canada and making it the 51st state. Former Prime Minister Justin Trudeau stated that he believed the U.S. trade war was intended to destroy the Canadian economy in order to achieve this annexation.
Carney limited expectations for his trip, saying he did not expect “white smoke” to come from the meeting, a reference to the smoke that comes from the Sistine Chapel when the Vatican conclave selects a new pope. Coincidentally, white smoke was seen rising from the Vatican just before publication which signalled the election of a new pope, the first-ever American to hold the position.
Nothing concrete came from the meetings in terms of a new trade deal or the removal of tariffs. However, the public conversation between the two leaders was cordial and respectful, and there appeared to be a general agreement about the need to make the relationship between the two countries work.
An Improvement in Relations, at least Rhetorically
“I have a lot of respect for this man,” Trump said in a joint Oval Office press conference in between closed-door meetings. Trump referred to Carney as the Prime Minister while he had called Trudeau “the governor”. He also stated that he “love[s] Canada” and spoke positively of his Canadian relatives and time in the country. Ever since the disastrous Oval Office meeting with Ukrainian president Volodymyr Zelenskyy, there is always concern that another of these Oval Office press conferences could descend into a similar shouting match.
“Thank you for your leadership, you’re a transformational president,” Carney said to Trump in one of his extremely careful statements. Carney found ways to address and even flatter Trump without ceding any concrete ground while pushing the Canadian position. He credited Trump for “revitalizing NATO” and praised him for working to secure the U.S. border.
Notably, Trump seemed to like the idea that he was responsible for Carney’s win, despite Carney’s win coming as a direct rebuke of Trump and cost the president the opportunity to have a more ideologically-aligned prime minister in Conservative leader Pierre Poilievre. It is possible that Trump believes Carney owes him for making him prime minister.
“It was probably one of the greatest comebacks in the history of politics, maybe even greater than mine,” Trump said, calling himself the “greatest thing” to happen to Carney.
Carney was also able to navigate the 51st state issue in what may have been the best display of his ability to handle Trump. In what was likely the most-shared moment of the press conference, the Prime Minister used a real estate metaphor to explain the Canadian position.
“As you know from real estate, there are some places that are never for sale,” Carney said. “We’re sitting in one right now [the White House]. Buckingham Palace, which you visited, is another one. Having met with the owners of Canada over the course of the campaign in the last several months, it’s not for sale. Won’t be for sale, ever.”
Trump nodded along to this and appeared to appreciate the analogy. However, he refused to concede completely, stating “never say never” about annexing Canada and pitching the idea that it would be better for the Canadian people to fully join the U.S.
While the meeting clearly signalled an improvement in relations between the two countries, it only marks the start of long and wide-ranging negotiations, especially on trade. Both leaders acknowledged that there would have to be major changes to the Canada-U.S.-Mexico Agreement (CUSMA), the free trade agreement that replaced the North American Free Trade Agreement (NAFTA) during Trump’s first term. CUSMA is called the United States-Mexico-Canada Agreement (USMCA) in the U.S., with each member naming the agreement with their country first. Carney pushed a negotiation among equals, stating that the agreement would need to be improved to benefit Canada as well.
“[CUSMA] is a basis for broader negotiation,” Carney said. “Some things about it are going to change. And part of the way you’ve [President Trump] conducted these tariffs has taken advantage of existing aspects of USMCA. So it’s going to have to change.”
When asked by a reporter what the top concession he wanted from Canada is, Trump replied with “friendship”. However, he continued to falsely claim that the U.S. subsidizes Canada to the tune of $200 billion per year and said he did not want Canadian cars to be sold in the U.S.
The two leaders held closed-door meetings in addition to the press conference. In his own press conference after the meeting, Carney said that he discussed Canada’s role in combatting fentanyl smuggling and other border security issues with Trump, and pitched these as reasons why the U.S. should remove tariffs from Canada. When asked during the Oval Office meeting what Carney could say to get Trump to remove tariffs immediately, Trump replied simply: “nothing”.
Carney continued to tamp down expectations after the meetings. He stated that he did not believe any new tariffs were coming for now, and said that he believes the U.S. and Canada are generally in a good place.
“We also discussed a number of issues globally, geostrategically… where we have common interests, common concerns, and that is of course a sign of… a healthy relationship,” said Carney.
While there is more work to be done, the meetings represent the most productive contact between Canada and the U.S. since Trump took office in January. Carney described the meeting as “the end of the beginning” of the two countries redefining their relationship. The markets responded positively to the meeting, with the Canadian dollar closing at a seven-month high of $1 CAD to $0.726 USD, indicating that businesses and investors like what they saw.
Military Spending May Be at the Heart of Negotiations
CBC reported that Trump and Carney discussed international issues during a working lunch after the press conference. The meeting was closed to reporters, but anonymous sources told CBC that the two leaders discussed ending the Ukraine War, challenges with China, and the Israel-Palestine war. The two also discussed Iran’s nuclear program, which Trump is heading to the Middle East next week to discuss. At the beginning of the press conference, Trump announced that the U.S. had struck a deal with the Houthis in Yemen to end U.S. bombing runs against the group in exchange for an end to Houthi attacks on American ships. Trump also teased a “a very, very big announcement… as big as it gets” coming next week in relation to conflicts in the Middle East, to which Carney told Trump that he is “on the edge of my seat”.
That the discussion focussed so much on foreign policy may give an indication into both Carney’s objectives as Prime Minister and how Canada and the U.S. will work together on issues outside the trade dispute. Carney has promised to increase the defence budget in order to hit NATO’s objective of spending at least two per cent of GDP on the military. Canada’s defence budget was around 1.37 per cent of its GDP in 2024, making it one of eight NATO countries not hitting the target. The federal government moved up its goal of hitting the two per cent mark to 2027 in January of this year.
“Our military has been both underfunded and overly reliant on the United States,” said Carney in Montreal during the election campaign, pitching defence spending as a way to protect Canadian sovereignty. During the campaign he promised to invest in Canadian equipment rather than buying American weapons and supplies. However, the discussions with Trump indicate that Canada could become more involved with American foreign policy objectives, potentially as a way to alleviate trade issues.
How Carney navigates military spending will give a larger indication into how Canada’s relationship with the U.S. is evolving. One of the most pressing issues for the military is upgrading the air force’s fleet of fighters, which is currently made up of CF18s and FA-18s which were acquired in the 1980s. Canada signed a $19-billion deal in 2023 to purchase 88 F-35s from the U.S. F-35s are the latest generation of fighters, though its development has been plagued by issues for decades.
That agreement has drawn recent scrutiny due to the plane being American, which would make Canada reliant on the U.S. to supply the jets and any spare parts for maintenance. The F-35 also allegedly contains a “kill switch” which would allow the U.S. to halt its operation if they see fit. Many commentators have recommended Canada source new jets from countries which have not been hostile the way the U.S. has been recently.
One of the leading alternatives to the F-35 is the Swedish plane Gripen, which was the runner-up to the F-35 when the air force held a competition to determine what plane they would purchase. However, the Gripen engine is still made in the U.S., meaning the Americans would still control access to spare parts. The country could also put an export control on the engines in retaliation for Canada abandoning the F-35 deal. Other fighter options like the Dassault Rafale and the Eurofighter Typhoon contain American equipment as well.
It is not clear whether Trump and Carney discussed the fighter jets or other equipment specifically, but given that the leaders are discussing both trade and defence issues it is likely to feature in conversations between the countries. If Canada chooses to stick with the F-35s this could indicate that Carney is seeking more cooperation with the U.S., despite his rhetoric. If Canada abandons the deal for European jets, which could strain relations with the U.S., it could indicate that Canada is more interested in independence than cooperation (relatively speaking as the countries will remain allies and defence partners regardless of specific weapon purchases).
“I like him. He's a nice man. We get along very well. We had a great meeting today,” Trump said at a press conference later that day. “I think the relationship's going to be very strong.”