Carney Stands Up to Trump in Trade War Despite the Risks

 

news analysis

Carney Stands Up to Trump in Trade War Despite the Risks

 

Canada’s prime minister walked away from what he thought was a bad trade deal with the United States. Many Canadians are behind him, but it will be costly.

 

Matina Stevis-Gridneff

By Matina Stevis-Gridneff

Reporting from Toronto

https://www.nytimes.com/2026/08/22/world/canada/carney-trump-canada-tariffs.html

Aug. 22, 2026, 5:14 a.m. ET

 

On Friday night, Prime Minister Mark Carney of Canada did something that few other world leaders before him have dared to do.

 

After days of intense trade negotiations with the United States, with less than an hour to go on a midnight deadline for a new round of tariffs from the Trump administration, Mr. Carney instructed his negotiators to walk away.

 

Then, he announced that once 50 percent tariffs came into effect on $20 billion worth of Canadian goods, he would order retaliatory tariffs on the United States “dollar for dollar.”

 

In a statement, Mr. Carney said he had gone into the trade talks in good faith, seeking “the best deal for Canadians” but “never a deal at any price or on any deadline.”

 

By walking away, Mr. Carney chose a road that no major U.S. ally has taken: With his country’s economy on the line, he stood up to President Trump and refused to accept the administration’s offer of a new trade relationship with tariffs permanently baked in. Britain, the European Union and other major U.S. trading partners have agreed to smaller deals that have been volatile and often left them worse off.

 

The collapse of the talks came after Mr. Trump declared on Tuesday that the deal was practically done.

 

Mr. Carney never echoed that. Over the week, as negotiators spent long hours in Washington huddled in the office of the U.S. trade representative, Mr. Carney appeared optimistic but insisted that there was still work to be done.

 

Until there wasn’t.

 

Make no mistake, Mr. Carney has a lot to lose.

 

Canada, which is closely integrated with the United States and relies on it for defense, is heavily dependent on trade with its superpower neighbor. In his statement, Mr. Carney acknowledged the cost of his choice for many Canadians by saying that his government would work to support industries and companies affected by the new tariffs.

 

It will also be costly for U.S. residents, who have been paying for Mr. Trump’s tariff policies through higher prices that have also been driven by the war in Iran and spiraling oil costs.

 

But on Friday, Mr. Carney appeared resolved to shoulder the costs of his decision. And he has risked Mr. Trump’s ire before.

 

In a speech in Davos, Switzerland, in January, he described a new era in which the United States was no longer a guarantor of stability and where middle powers like Canada have to unite to survive. The speech — and its enthusiastic global reception — angered Mr. Trump.

 

Mr. Trump has also been riled by Mr. Carney’s outreach to China, which led to a narrow but significant trade agreement this year; by Canada’s persistence on banning the sale of U.S. liquor; and by the Carney government’s retaliatory measures against the United States for its broad, devastating tariffs on core Canadian industries.

 

 

Since he rose to lead Canada last year, Mr. Carney has put in motion a plan to help his country survive Mr. Trump’s presidency and, in the long run, thrive apart from the United States. One of his favorite lines is that “nostalgia is not a policy,” and he has told everyone who will listen that there is no going back to the old relationship with the United States — a close and familial, if lopsided, bond.

 

Instead, Mr. Carney has been traveling to secure new partnerships in Asia and Europe, a generational shift away from economic dependence on the United States, although that is unlikely to bear fruit fast enough to cushion the blow of the breakdown of the two countries’ relationship.

 

It’s likely that Mr. Trump will not take kindly to Mr. Carney’s trade decision. Just before beginning his second term, Mr. Trump said he was willing to inflict “economic pain” on Canada to get what he wanted. He has repeatedly expressed a desire to make Canada the 51st state, describing it as little more than a vassal that “lives because of the United States.”

 

But Mr. Carney’s vision for Canada, with a surprising assist from Mr. Trump’s needling, has ignited a wave of patriotism. Going into the trade talks, more than half of Canadians — many more than those who voted for Mr. Carney — said they wanted him to give nothing away.

 

Several premiers of different political stripes expressed their support for Mr. Carney after his decision. Doug Ford, a conservative who leads Ontario, cheered him on. David Eby, the progressive premier of British Columbia, said, “We didn’t ask for this, but we’ll keep fighting for as long as it takes.”

 

Not everyone is enthusiastic. Danielle Smith, the conservative premier of Alberta, who has good relations with the MAGA movement, was more circumspect and urged Mr. Carney to return to the negotiating table. Canada’s industry is aghast with the prolonged turbulence and uncertainty that Mr. Trump’s trade war against Canada, and Mr. Carney’s refusal to submit, are causing.

 

But there is little doubt that Mr. Carney will also be cheered, at home and abroad, for doing what he thought was best for his country, and for saying, in his Friday statement, that “we will not allow any nation to determine our future.”

 

Matina Stevis-Gridneff is the Canada bureau chief for The Times, leading coverage of the country.