Carney's wartime stance in US trade war

Prime Minister Mark Carney announced the collapse of trade talks with the United States last Saturday. He stated that America is trying to 'break us so that they can own us,' but promised that would never happen.

For years, the former central bank governor worked to calm markets. Now, he asks Canadians to accept uncertainty and confrontation. When asked if he was going to war, Carney paused. 'We were attacked. You're at war when you get attacked,' he said. 'We got attacked.'

After negotiations broke down, both sides imposed new tariffs. In a recent act, former US President Donald Trump signed an order to rename Lake Ontario as 'Lake America'. Carney walked away from the proposed deal. 'We cannot accept what they have offered, and we will not give what they have asked,' he stated.

A determined leader

For those who have worked with him, Carney's refusal to accept a bad deal is no surprise. A former colleague from his time as UN climate envoy in 2021 said he was 'pretty doggedly determined.' Carney could be diplomatic when needed to influence people. This determination explains his stance against Trump, the colleague suggested.

Carney's career path, from Canada's prairies to powerful institutions, shows a man unwilling to accept others' terms. His traits from Goldman Sachs continue today. He is an early riser, a dedicated runner, and demands ministers know their files thoroughly. Staff are expected to wear formal business attire and use British spelling in documents.

His tenure at the Bank of England, which began in 2013, showed his willingness to become political. He introduced a 'forward guidance' communications strategy. Labour MP Pat McFadden accused the Bank under Carney of baffling people with mixed messages on interest rates.

Before the 2016 Brexit referendum, Carney gave a speech at Oxford University. He underlined the economic benefits of EU membership. Brexit campaigners saw this as an unwarranted intervention. When Carney suggested Brexit might cause a UK recession, Conservative MP Bernard Jenkin told him to butt out.

Carney's reply displayed a relish for a fight. His letter accused Jenkin of 'a fundamental misunderstanding of central bank independence.' There was no Brexit recession, which many economists partly credited to the Bank's response.

Charles Randell, who worked with Carney at the Bank of England, called him 'one of the most impressive people I've ever worked with.' He said Carney was serious, analytical, and driven. Randell highlighted Carney's calm address to markets after the Brexit vote as a 'masterpiece in strategic messaging.'

The cost of confrontation

University of Toronto economics professor Joseph Steinberg noted Carney is now leaning on sovereignty in the trade war, not economics. Steinberg said retaliating will hurt Canada more than the US. Canadians are currently intolerant of making concessions to the US, even if it's in their economic interest, he observed.

Carney is now fully beholden to a wary public. This pits the technocrat who understands economics against the politician facing the costs of compromise.

In a speech at Davos in January, Carney warned that 'compliance will not buy safety' in a world of hegemonic powers. The speech was seen as a veiled critique of Trump. Carney advised forging ties with 'middle powers' and reducing reliance on former allies.

Pollster David Coletto said Canada has moved at 'wartime-footing' speed to follow this advice. He described a government organised around an external threat, centralising power and measuring outcomes over values.

Carney has abandoned many policies of his predecessor, Justin Trudeau. He fast-tracked large projects like an oil pipeline and invested tens of billions more in defence. The public has hardly blinked, Coletto said, with Carney's approval rating holding steady. Coletto admitted being surprised by Carney's nuanced read of the country and his ability to hold support together during a trying time.