Carney pitches new Canada-U.S. relationship as trade pact review looms

Mark Carney used a New York City stop before business leaders at the Economic Club of New York to argue that Canada needs a different kind of relationship with the United States, one built less on assumption and more on leverage. With the Canada-U.S.-Mexico Agreement facing a review that could end in renewal for 16 years, withdrawal, or a decade of annual checks, Carney is pitching Ottawa’s economic reset as a hedge against a far shakier North American order.

The timing mattered. CBC News reported that Mexican and American officials were meeting this week on CUSMA negotiations while U.S. Trade Representative Jamieson Greer said there were significant trade issues with Canada and signaled that tariffs would remain on Canada and Mexico even if the pact survives. That leaves Ottawa trying to defend access to the U.S. market while preparing for the possibility that access gets narrower, more conditional, or both.

Carney has already spelled out the argument in plainer language. In an April 19 video address, he said Canada’s close economic ties with the United States had become a weakness that must be corrected, warning that the world had become more dangerous and divided and that Washington had pushed tariffs back to levels last seen during the Great Depression. The message in New York was less confrontational, but the strategy was the same: reduce dependence on one dominant buyer, one dominant security partner and one dominant source of economic gravity.

The government’s April 28 Spring Economic Update turned that logic into policy. It centered on building a stronger, more independent and more resilient economy, diversifying trade partners abroad and reducing reliance on the United States. It also created the Canada Strong Fund, billed as Canada’s first national sovereign wealth fund, and launched Team Canada Strong, a nationwide effort to recruit, train and hire 80,000 to 100,000 new skilled trade workers by 2030-31. That combination points to where the shift would be felt most directly: in export markets, in domestic industrial capacity, in labor shortages tied to energy and infrastructure projects, and in the supply chains that feed them.

The political risks are not limited to trade. The Globe and Mail reported in mid-May that the United States suspended a joint Canada-U.S. defense advisory board over Canada’s slow progress on military spending, underscoring how Carney’s push for strategic decoupling is colliding with immediate pressure to prove Canada can still carry its share of the alliance. Carney’s January speech in Davos, where he warned about economic coercion by great powers, already drew a rebuke from Donald Trump, who said, “Canada lives because of the United States.” Carney’s challenge now is to show that Canada can keep the relationship, while making itself harder to pressure.