Canada is taking a firm stance in its relations with US President Donald Trump, committing to deal with him on its own terms and prioritizing respect for sovereignty. As the economic relationship between the two countries becomes increasingly complex, Prime Minister Mark Carney emphasizes the need for a more balanced trade partnership.
Canadian Prime Minister Mark Carney has made it clear that his country will deal with US President Donald Trump ‘on our terms,’ not on the other side. This stance is a direct response to Trump’s repeated claims of making Canada the 51st state of America, which Carney has described as ‘never, ever going to happen.‘
Canada and the United States share the world's longest international border, spanning over 8,893 kilometers.
The two countries have a long-standing relationship, with historical ties dating back to the 18th century.
The US-Canada border was established in 1783 through the Treaty of Paris, which ended the 'American Revolutionary War'.
Over time, the two nations have developed strong economic and cultural ties, including trade agreements like NAFTA and USMCA.
A Partnership Based on Respect and Sovereignty
Carney emphasized that Canada deserves respect from the US and will only engage in trade and security talks with President Trump when there is a ‘serious discussion to be had’ that respects Canada’s sovereignty. This approach is a significant departure from the past, where Canada has often been seen as a willing partner in US-led initiatives.
The Economic Context
The economic relationship between Canada and the US is complex, with roughly 75% of Canada’s exports heading south to the US market. However, this also means that Canada accounts for only 17% of US exports, highlighting the need for a more balanced trade relationship.
A Global Trade War and Its Implications
The introduction of tariffs by Trump has sparked a global trade war, with Canada being one of the first countries targeted. The blanket 25% tariff on Canadian goods, as well as 25% import taxes on aluminium and steel imports, has led to significant retaliatory measures from Canada worth C$60 billion.
A global trade war occurs when countries impose tariffs on each other's goods, leading to a decrease in international trade.
This can cause economic instability and higher prices for consumers.
According to the World Trade Organization (WTO), global trade fell by 3% in 2019 due to trade tensions between the 'US' and 'China'.
The 'WTO' also reported that trade restrictions increased by 46% in 2020 compared to the previous year.
A Path Forward
Carney’s commitment to sovereignty and respect is a key aspect of his approach to US-Canada relations. He emphasizes the need for an economic and security partnership that is different from those in the past. The upcoming G7 summit hosted by Canada in June will be crucial in determining the future path of the global trade war.
Mark Carney is a Canadian economist and banker who served as the Governor of the Bank of England from 2013 to 2020.
He previously held positions at Goldman Sachs and the Bank of Canada.
Carney played a key role in shaping global economic policies, including the Basel III banking regulations.
He also chaired the Financial Stability Board (FSB) during the COVID-19 pandemic.
Carney has been recognized for his expertise on monetary policy and climate change.
A Diversification of Trade
Carney also highlighted the importance of diversifying trade relationships, particularly with the UK and other European countries. He noted that about 95% of trade between Canada and the UK is already tariff-free, and there is significant potential for further expansion.
Conclusion
As Canada embarks on a new era in US-Canada relations, Prime Minister Mark Carney‘s commitment to sovereignty and respect is a welcome change. By prioritizing an economic and security partnership that respects Canada’s interests, Carney is setting the stage for a more balanced and mutually beneficial relationship with the US.
