Canada’s New Leader Is Ready To Take on Trump

Summary

The Journal: Canada’s New Leader Is Ready To Take on Trump

Hosted by Kate Linebaugh, Ryan Knutson, and Annie Minoff | Released April 29, 2025

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Introduction

In this episode of The Journal, hosted by Annie Minoff in Ryan Knutson's absence, listeners are immersed in the pivotal moment of Canada's political landscape. The episode delves into Mark Carney's unexpected rise to Prime Minister amidst escalating tensions with the United States under President Donald Trump. The discussion provides a comprehensive analysis of the implications for U.S.-Canada relations, Canada's economic challenges, and Carney's strategic responses.

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Mark Carney’s Election Victory and Speech

Mark Carney’s triumph in the Canadian federal election was celebrated with enthusiasm at a hockey arena in Ottawa. Despite leading the Liberal Party prior to the election, Carney's acceptance speech took an unexpected turn by addressing broader geopolitical concerns rather than solely focusing on national unity.

Mark Carney (00:41): "America wants our land, our resources, our water, our country."

Annie Minoff highlights that Carney, already a prominent figure, used his platform to signal a shift in Canada’s stance towards the U.S.

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U.S.-Canada Relations Under Trump

The episode underscores the traditionally strong and intertwined relationship between Canada and the United States, both economically and culturally. However, President Trump's administration introduced significant strain by imposing hefty tariffs and making provocative statements about Canada's sovereignty.

Vipal Manga (04:34): "The real shock to Canada's psyche was this idea that Trump floated publicly that Canada should become the 51st state."

These actions by Trump, including a 25% tariff on steel and aluminum and threats of further economic isolation, have threatened to plunge Canada into a recession and disrupt longstanding supply chains.

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Mark Carney’s Background

Mark Carney's ascent to Prime Minister is rooted in his extensive experience in economics and public service. Born in Fort Smith, Northwest Territories, Carney pursued higher education at Harvard and Oxford before a successful tenure at Goldman Sachs. His leadership during the 2008 global financial crisis as head of Canada’s central bank and later as governor of the Bank of England during Brexit positioned him as a crisis manager adept at navigating complex economic landscapes.

Vipal Manga (07:12): "He definitely has a reputation for keeping a cool head under fire and being able to deal with extremely complex issues in a very thoughtful way."

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Canada’s Economic Challenges and Responses

Before Trump's policies, the Canadian economy was already grappling with stagnation, high inflation, and a housing crisis marked by skyrocketing rents and insufficient housing development. The imposition of U.S. tariffs exacerbated these issues, leading to factory closures in Ontario and warnings from the Bank of Canada about a potential GDP downturn.

Vipal Manga (10:26): "The Canadian economy was completely in the doldrums... There were a lot of internal fighting. And in many ways, there had been schisms forming in Canadian society that for now at least, Trump, the common enemy, has papered over."

In response, Carney implemented counter-tariffs and is actively seeking to renegotiate trade agreements with the U.S., while also looking to strengthen ties with Europe and other trading partners to diversify Canada’s economic dependencies.

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Carney’s Strategies in Dealing with Trump

Carney's approach to countering Trump's aggressive trade policies involves a multi-faceted strategy:

1. Renegotiating Trade Deals: He aims to negotiate better access to the U.S. market while reinforcing existing agreements with European countries and participating in the Trans-Pacific Partnership (TPP).

2. Leveraging Natural Resources: Canada’s abundant natural resources, including oil and gas, serve as crucial bargaining chips in maintaining economic leverage over the U.S.

3. Financial Expertise: Carney’s deep understanding of the financial system provides Canada with soft leverage, potentially influencing U.S. economic policies through sophisticated financial strategies.

Mark Carney (06:08): "We are facing the most significant crisis of our lifetimes because of President Trump's unjustified trade actions and his threats to our sovereignty."

Despite these efforts, Vipal Manga notes that replacing the U.S. as Canada’s primary trading partner is not feasible, emphasizing the intertwined nature of their economies.

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Political Dynamics and Future Outlook

With the Liberal Party securing a minority government, Carney must navigate a parliament requiring collaboration with other political factions to implement his agenda. Despite limited majority control, Canada holds significant leverage due to its economic interdependence with the U.S. and its vital natural resources.

Vipal Manga (13:34): "Canada has a lot more leverage than the US realizes... The other thing that Canada has is an abundance of natural resources."

Carney acknowledges the gravity of the situation, describing the current state as a "global tragedy" but remains resolute in adapting to the new geopolitical reality.

Vipal Manga (14:13): "Carney has called all this a tragedy, and I think he really means it. It's a global tragedy. It's a tragedy for Canadians... this is our new reality. We have to deal with it."

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Conclusion

Mark Carney’s leadership marks a transformative period for Canada as it confronts unprecedented challenges from the Trump administration. This episode of The Journal provides an in-depth exploration of the strategic maneuvers Carney employs to safeguard Canada’s sovereignty and economic stability. As Canada seeks to redefine its international alliances and economic partnerships, Carney's expertise and determined stance offer a beacon of resilience in turbulent times.

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Transcript

[Annie Minoff]

Hey, it's Jess. Annie Minoff, one of our senior producers, is going to be stepping in to do some hosting this summer while Ryan is out on leave. Enjoy.

[Mark Carney]

I have a question. Who's ready? Who's ready?

[Annie Minoff]

Last night, Mark Carney celebrated his victory in Canada's election at a hockey arena in Ottawa.

[Mark Carney]

Who's ready to stand up for Canada with.

[Annie Minoff]

Carney, who had already been leading the Liberal Party, will continue to serve as prime minister. But a surprising portion of his acceptance speech wasn't focused on Canada.

[Mark Carney]

America wants our land, our resources, our water, our country.

[Vipal Manga]

America never.

[Annie Minoff]

And what was Carney's speech like?

[Vipal Manga]

It was measured.

[Annie Minoff]

Our colleague Vipal Manga was there.

[Vipal Manga]

And a lot of it was focused at the US in some ways firing warning shots at Trump, letting him know that Canada realizes that his threats to annex Canada, his tariff war, are a betrayal.

[Mark Carney]

We are over the shock of the American betrayal, but we should never forget the lessons.

[Annie Minoff]

What could this moment and Carney's election mean for U. S. Canada relations?

[Vipal Manga]

I think Carney represents sort of a turning of the page for Canada. U.S. relationships longer term, what this means is breaking, in many ways of one of the strongest global partnerships in the world.

[Annie Minoff]

Welcome to the Journal, our show about money, business and power. I'm Annie Minoff. It's Tuesday, April 29th. Coming up on the show, how Canada's prime minister won by standing up to President Trump.

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[Annie Minoff]

Historically, the relationship between Canada and the US has been pretty cozy.

[Vipal Manga]

The countries are really wedded together. You know, there's many families that have relatives on both sides of the border. Canadians love to travel to the US and vice versa. I think Canada is the only country that has teams in the National Hockey League, NBA, and Major League Baseball.

[Annie Minoff]

The two countries economic ties also run deep. 80% of Canada's exports go to the.

[Vipal Manga]

U.S. canada is the largest foreign exporter of oil and gas and hydropower to the United States. It sends a lot of cars to the US A lot of the Detroit manufacturers build cars here, about a million cars a year, and auto parts to the US as well. Canada sends a lot of lumber, a lot of natural resources. Broadly, the two countries share a supply chain. So it's really hard to overstate just how close the countries are and to what extent. The border between the two countries, at least from a business standpoint, is a bit of a fiction.

[Annie Minoff]

That's how it used to be. But recently, the US Canada relationship has taken a big hit. Soon after coming into office, President Trump started imposing tariffs on America's trading partners, including Canada.

[Vipal Manga]

He's levied 25% tariffs on steel and aluminum, which really impacts major sectors of Canada's manufacturing economy. He's leveled tariffs on automobiles and auto parts and continues to threaten tariffs and reduce access for Canadians to the U.S. market. That threatens to send Canada into a deep recession. The bank of Canada has warned that a trade war with the US could reduce Canadian standards of living. It's that serious.

[Annie Minoff]

But it wasn't just economic. Trump also threatened Canada in a way that was much more existential.

[Vipal Manga]

The real shock to Canada's psyche was this idea that Trump floated publicly that Canada should become the 51st state.

[Annie Minoff]

What I'd like to see Canada become our 51st state. We give them protection, military protection.

[Vipal Manga]

That was deeply offensive to many Canadians and frankly, very frightening. And I think the sort of stark reality of that, the geopolitical reality of that was real shock to the system.

[Annie Minoff]

And so how have Canadians been feeling about their Southern neighbor, the U.S. well, they're quite angry.

[Vipal Manga]

I mean, you know, there's this whole idea of elbows up that, you know, Canada's gonna fight back against the U.S. and I do think the country has become unified in a real fundamental way. Canada is a huge country with very disparate regions, and there's a lot of internal fighting. And in many ways, there had been schisms forming in Canadian society that for now at least, Trump, the common enemy, has papered over.

[Annie Minoff]

Some Canadians have started wearing blue Canada is not for sale hats. Others are boycotting American whiskey. And instead of selling Americanos, some coffee shops are selling Canadianos. That was the backdrop to Canada's election. And as a candidate, Mark Carney was able to tap into Canadians anger.

[Vipal Manga]

What resonated with Canadians emotionally was this sense of, we're not going to back down. We're really strong, but we're tough, and we're going to definitely hit back.

[Mark Carney]

We are facing the most significant crisis of our lifetimes because of President Trump's unjustified trade actions and his threats to our sovereignty.

[Vipal Manga]

He also tapped into this idea. I don't think he sugarcoated it. And Canadians appreciated that sending up to the US and changing this relationship is going to be very painful for Canadians. But he also reminded Canadians that the country would stick together and help each other. And I think Canadians really like that.

[Annie Minoff]

And so let's talk a bit about Carney. What's his background?

[Vipal Manga]

He was born to two school teachers in Fort Smith, Northwest Territories, which is in the subarctic. I mean, it's not even considered far north, but it's far. And he grew up wanting to play hockey, but he ended up going to Harvard and Oxford to study economics. From there he became a globetrotting investment banker for Goldman Sachs and worked there for 13 years and then decided, you know, I'm going to go into public service.

[Annie Minoff]

Carney would go on to run Canada's central bank. This was at a crucial moment during the 2008 global financial crisis.

[Vipal Manga]

And then by 2012, he had become such a rock star in central banking.

[Annie Minoff]

If you can imagine such a thing.

[Vipal Manga]

That he was recruited by the UK government to become the bank of England's governor.

[Annie Minoff]

Carney would run that bank during another.

[Vipal Manga]

Crisis, Brexit, and became the face of the UK trying to deal with this massive change in their own.

[Annie Minoff]

So he's a guy who's dealt with crises before, specifically economic crises.

[Vipal Manga]

He has. So he definitely has a reputation for keeping a cool head under fire and being able to deal with extremely complex issues in a very thoughtful way.

[Annie Minoff]

Then Carney got a chance to lead on his home turf. Justin Trudeau has announced he's stepping down.

[Vipal Manga]

As the Prime Minister of Canada and.

[Mark Carney]

As the leader of his party.

[Annie Minoff]

After Trudeau's resignation earlier this year, Carney stepped in to replace him and he soon called for an election.

[Vipal Manga]

The new Prime Minister, Mark Carney, has called a snap federal election for the 28th of April. That'll be just a five week campaign.

[Annie Minoff]

In only five weeks, Carney gained enough support to win. Was Carney's rise surprising to you?

[Vipal Manga]

I think it was. You have to remember that in January, right before Justin Trudeau quit, the Liberal Party had been power for about nine years and they were about 20 points beneath the Conservatives in the polls, dead in the water. And then Carney came along and I was skeptical that he'd actually be able to turn it around. And I'm not sure if Trump hadn't continually mentioned the 51st state that he would have turned it around. It's a remarkable comeback. I don't think anything like this has ever been seen in Canadian elections.

[Annie Minoff]

So how is Carney planning to take on Trump? That's next.

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The Warby Parker store nearest you, head over to warbyparker.com that's warbyparker.com Carney went on the message that he would stand up for Canada and its economy, but that economy was shaky even before Trump took office.

[Vipal Manga]

The Canadian economy was completely in the doldrums. We were looking at a potential recession. There was a stagnant productivity, inflation was high, and the biggest problem facing Canadians was lack of housing. There weren't enough houses being built. Rents were skyrocketing. It was a real problem. And those problems continue to persist.

[Annie Minoff]

And tariffs, I would imagine, have made that worse.

[Vipal Manga]

Yes, we've already seen signs of a slowdown. The data is still a little bit mixed, but the bank of Canada has definitely warned that you could see a big hit to GDP going forward. We've already seen some auto plants start to close in Ontario, which is the industrial heartland and the country's most populous province. So the tariffs are already starting to have a big impact.

[Annie Minoff]

Carney has already taken some action against Trump's tariffs. He imposed counterterroriffs against the US earlier this month, and he's looking to strike a new trade deal with Trump.

[Vipal Manga]

He does want to renegotiate a deal for access to the US Market and he wants double down on trading relationships that Canada already has with Europe. And they're also part of the TPP deal that includes a lot of Asian countries.

[Annie Minoff]

So as the trade relationship with the US Becomes shakier and something that Canada can't rely on, Carney's looking to deepen that relationship with other countries, very much so.

[Vipal Manga]

And you know, we've got some indications that he might push for deeper integration with the European Union in terms of being a member of the European Economic Area like Norway Or Iceland. It's not clear that Europe would necessarily be open to that. But I think that's where his head is at. He wants to find other allies.

[Annie Minoff]

But could any of these potential deals with other countries or blocs like Europe.

[Vipal Manga]

Actually replace the U.S. nothing can replace the U.S. again. Canada is so close to the U.S. in that they're bonded so closely together that I don't think there's any expectation that the loss of access to the US Market is easily replaceable.

[Annie Minoff]

So he's looking to diversify the trade relationships. But that only goes so far.

[Vipal Manga]

It only goes so far.

[Annie Minoff]

What about this idea that Trump has floated repeatedly of making Canada the 51st state? What can you expect to see from Carney about that?

[Vipal Manga]

Carney has said that he demands respect from Trump, that Canada is only going to deal with Trump as a sovereign nation.

[Mark Carney]

President Trump is trying to break us so that America can own us. That will never. That will never, ever happen.

[Vipal Manga]

Trump has already kind of tempered his tone a little bit. His antipathy for Justin Trudeau ran so deep that he stopped calling Trudeau Prime Minister, called him Governor Trudeau. He's been calling Carney Prime Minister so far. So there's something of an improvement there.

[Annie Minoff]

Carney's Liberal Party fell short of a majority in the Parliament. That means that Carney will have to work with rival politicians to get things done. How much can Carney really do when it comes to standing up to Trump? How much leverage does he have? How much power does he have?

[Vipal Manga]

I think Canada has a lot more leverage than the US Realizes. Again, the supply chains are really tightly enmeshed. Breaking those apart will also hurt the United States economy. I'm not sure if the US Policymakers realize just how deeply wedded those two economies are. The other thing that Canada has is an abundance of natural resources. They have lots of oil and gas, and Canada can use that as a card. The other thing that maybe more than any other leader in the world understands how the financial system works. He's an expert in the plumbing, right?

[Annie Minoff]

This is his superpower.

[Vipal Manga]

That is his superpower. And I do think that having that knowledge gives Canada a lot more soft leverage, if you will, over the US Than the US Might realize. I do think that this is a big wake up call for Canada, that, you know, the sort of the easy days of them just being able to send supplies, natural resources and goods to the US Are over and that they're going to have to find other ways to grow. Carney has called all this a tragedy, and I think he really means it. It's a global tragedy. It's a tragedy for Canadians. In some ways, it's tragedy for the U.S. in the way that this global order that the U.S. itself created is now being broken by the U.S. but he's also very pointedly said, this is our new reality. We have to deal with it.

[Annie Minoff]

Before we go. Our series Trump 2.0 is wrapping this week. If you have any questions about the Trump administration and how its first 100 days in power went, email us and let us know. Please send a voice Note to the journalsj.com that's thejournalsj.com that's all for today. Tuesday, April 29th. The journal is a co production of Spotify and the Wall Street Journal. If you like our show, follow us on Spotify or wherever you get your podcasts. We're out every weekday afternoon. Thanks for listening. See you tomorrow.