The Current - Why Prime Minister Carney needs a win with President Trump

Episode Date: October 7, 2025

Mark Carney heads to the Oval Office to meet the U.S. president today. Almost six months after he was elected to fix Canada's Trump problem, there's still no relief on tariffs. Former Conservative leader Erin O'Toole says Canada can get a deal with the Americans by finding a way to give the president a win on defence or energy.

Did you know that it was once illegal to shop on Sundays? That's true for when I was born. I remember this, and I'm not that old. I'm not, okay? Leave me alone. Anyway, I'm Phelan Johnson, and I host See You in Court, a new podcast about the cases that changed Canada and the ordinary people who drove that change. From the drugstore owner who defied the Lord's Day, to the migma man who defended his treaty right to fish, to the gay teacher who got fired and fought back. Find and follow, see you in court, wherever you get your. Podcasts. This is a CBC podcast. Hello, I'm Matt Galloway, and this is the current podcast.

A week after Mark Carney was elected, he made a trip down to Washington. Tariffs were in place, threats were continuous, talk of 50 first statehood was hot, but overall things seemed to go well, and the tone was even friendly. His party was losing by a lot, and he ended up winning, so I really want to congratulate him. It was probably one of the greatest comebacks in the history of politics may be even greater than mine. And the Prime Minister returned to the flattery. Thank you for your hospitality and above all for your leadership.

You're a transformational president. Well, now, five months later, the Prime Minister returns to the Oval Office today. But with the trade war still on and yet more tariffs piling up, Canadians have been feeling the economic pain and want relief. Opposition leader Pierre Pahliav issued a letter to the Prime Minister saying, no more losing. It's time for you to deliver the promised wins. And the Premier of Ontario, Doug Ford, had this to say at a union rally. A message to the Prime Minister, you're going down there Tuesday. You better fight like hell. Don't roll over and keep fighting. Aaron O'Toole

is a distinguished fellow specializing in international trade at the Hudson Institute. He is also the former leader of the Conservative Party of Canada. He's with me in studio. Good morning. Good morning. Nice to see you. Good to see you. Canada is the only G7 country yet to reach a trade deal with Donald Trump. What has to happen at today's meeting for it to count as a win for this country? Well, I think there needs to be the start of a process to get some sort of deal. I think it's good. We haven't rushed a deal, Matt, because we're fortunate, unlike other countries in the G7, to have the KSMA, USMCA agreement. That means that the vast majority of our products are not tariffed. They're treated fairly under that, under that trade deal. But,

But for the ones that are facing tariffs, steel, aluminum, some furniture, a range of other, those sectors are in real, real trouble. So I think the prime minister now has to maybe get some temporary wins with this trip, maybe a reduction in tariffs, maybe the start of talks to collaborate to bring steel and aluminum down, bring our supply chains together again. There really needs to be some proof in the pudding here that he's going to transform, this relationship. He reset the tone, which I was very positive on his first foray into the U.S. That was good. It's more professional. But these sectors are expecting progress. And I think

you heard Premier Ford's comments. Like he wants something that shows the relationship is turning around. And so a lot of pressure on the prime minister with this trip. What do you make of his approach? You wrote on Substack that in some ways he's learned from the last trade war. Yeah, the last trade war, we made big mistakes. And I was there as critic. And any time I was slightly, you know, critical of Minister Freeland or the Prime Minister, it became this team Canada. And you were capitulating to the Americans or what have you. But we now understand what the U.S. is doing vis-a-vis China. They have seen China disrupt steel, aluminum, shipbuilding, all these sectors that the U.S. feels they're now inadequate in. They're not ready. for the modern security world. So this, now that we understand that, and last year we aligned our tariffs on Chinese EVs, Chinese steel, now we get what the U.S. is doing.

We could actually collaborate with them to make up that shortfall they have in shipbuilding. I'll use an example, Matt. In one year, a few years ago, one shipyard in China built more ships than the United States has built since World War II. They're like, they're not just slightly behind. They're massively behind.

So I think if President Trump and Congress really want to catch up, and this is a bipartisan issue, Canada's supply chain, our aluminum, our specialized steel products, if we go back to that sort of North American approach to supply chains, we can actually help them accelerate. So I hope the prime minister uses collaboration on defense technologies, but also on energy to restart the relationship. What happens if the prime minister comes out of the meeting and it's just goodwill and a plan to continue continuing? well that's where I think people will be disappointed and and rightly so I think do you think Canadians have patience for that I mean I get that it's a process but do you think Canadians have patience for a process I think they understand we're dealing with a very challenging administration they've seen this this movie before at Trump's second term is even more challenging there there there's not the traditional sort of cabinet he had last time that

was sort of tempering his his enthusiasm this time they're going for bro And I think Canadians realize that's difficult. But the prime minister himself did set expectations in the sort of elbows up era that he was going to make a strong case for Canada. Everyone wants him to win. I do as the former conservative leader. Do you think he's lowered his elbows? I think he's made some smart moves, actually, that were difficult for him. He walked away from the retaliatory tariffs, Matt.

That was something that Mr. Trudeau and Ms. Freeland did last. time. This is something he inherited a number of retaliatory tariffs. And you say it was smart to drop those retaliatory tariffs because they were hurting us more than they were hurting the U.S. And I think doing that, dropping the digital services tax, these were things that at least showed, hey, I'm ready to talk Turkey here with the U.S. administration. And if you're hurting your own economy by the retaliatory tariffs, it's a imprudent move because you're allowing a motion to dictate. your tactics. Your successor in the leadership of the conservative party would strongly disagree with

that. He says no more losing that the prime minister has not shown any success at all. Talked a good game during the election. And again, caved in his words on the dollar for dollar counterteriffs, the digital service tax him more while winning nothing in return for Canada. What do you make of Pierre Pollyov's criticism? Well, look, there's always a lot of politics here, Matt. Do you think it's fair? I do now. You know, the interesting thing is I think the D.S. digital services tax and the removal retaliatory was smart. But that's now been, you know, weeks, if not a few months in the case of the digital services tax. Where do we see a reprochement or some sort of progress on the U.S. side? So right now, it's all been giving in to the United States.

We haven't seen anything in return. That's why the pressure is on the prime minister. And I think Pierre is highlighting it very, very well. But so is Doug Ford. You know, he's, He doesn't want just another tone meeting. But Doug Ford has also said that he's very much supportive of what the prime minister is doing. I just wonder, is now the moment for, there's this whole idea, you mentioned Team Canada. There's a whole push for a national unified approach to dealing with Donald Trump. Is now the time for partisan politics? Does that get in the way of Team Canada?

Now you have to be strategic. Canada is still a democracy and the conservatives still need to push for a better outcome. But I do think we also need to understand. that these are unprecedented times, and this is a very difficult administration. This isn't the old softwood lumber dispute or some of the irritants that we've had for generations. This is a president who's throwing the rules-based trade order out the window and rewriting it. The good thing is, I do think the prime minister's moves on defense, his trips to the Arctic, your coverage of the Arctic. I think Canadians now know we weren't fulfilling our mandate as a,

a security partner, we weren't doing things in the way that we needed to be serious. I think that's been reset. Now there has to be an ability for us to let the Americans know we're moving in certain directions. You have to provide us that partnership or at least lower the tariffs. If he could even get steel and aluminum down from 50% at some heights to a 10% or 15% rate, that would be progress. So let's hope that he brings home a couple of wins. You wrote a on substack that any deal that's achieved will have some level of tariffs. There was perhaps maybe it was naive, but the belief that these negotiations and whatever we were getting into could end with a tariff-free relationship. That's not possible. I've never said we're going to

get tariff-free because I saw in the first term how the president viewed tariffs two ways. He likes to raise money from them and they've brought in over $300 billion so far from global tariffs. Now, it's causing inflation on his own citizens slowly, so they're not prudent. But the other thing the president likes about tariffs is he looks at it as a zero sum, winning and losing. I'm making you do this. So can we get tariffs down to a level on the goods that they're on that we can live with? Like if our dollar fluctuates, Matt, sometimes that's more uncertainty for business than a fixed tariff. So if you could get a tariff down to 8 to 10 percent, a lot of businesses, I've talked to could live with that. Not all. And then if we get it down to that, then the government

could provide some assistance to sectors that are being unfairly targeted to sort of show that we have their back as we're going through this global trade disruption. Mark Carney is not the only one who's looking for a win. Donald Trump is looking for a win as well. You mentioned defense. People call it the Golden Dome, this idea of a ballistic missile defense system. Could signing on to something like that be seen as a win for Donald Trump? Yes. He'll be able to say that Canada is going to pay their fair share and you put in $20 billion, name a big number for Golden Dome. The other big thing we could do would be energy related, you know, a pipeline or guaranteeing them our critical mineral access first, things like that.

Do you think that something, I mean, Keystone Exile or something like that? Is that a pipeline? And there's an idea that should be brought back from the dead? I believe so. You know, we sell our oil of gas to the U.S. at a discount because we don't have as many customers. So if you lock in a long-term agreement with the U.S. and maybe even say, hey, we'll pay for most of the pipeline, the president would be able to say he's getting a, you know, $30 billion discount from the Canadians. You know, just hearing that sounds like him, right?

you know, that he wants to see a trade deal, but a win on top of that. So with Japan, Japan committed to buying LNG from Alaska, the European Union committed to buying military and energy products. So he wants a win. Can we get a win that's also in our interest? And I think, Matt, the Arctic is somewhere that if we don't show we're willing to be a partner, the Americans may just start acting independently. What does that mean?

Well, they walked away in the first term from the balance that Mulroney and Ronald Reagan struck in terms of the Northwest Passage. The Americans have never viewed the Northwest Passage as Canadian waters, but Mulroney was able to negotiate a courtesy agreement where they would give us an advisory if they were ever going to transit it. They could just start operating in that area. And what would we do about it? We don't have much capacity up there. and it would be a very difficult diplomatic confrontation. So why don't we propose joint management or joint security missions, much like we jointly manage the St. Lawrence Seaway, for example,

almost all of our Arctic infrastructure mat, including our most northerly settlement alert, the military base, they were all built in partnership with the United States. In an era where we got along a little bit better, but let's promote that partnership and I do think ballistic missile defense whether you call it Golden Dome or not allows us to be an equal at a table

talking about our own sovereignty so I think the Prime Minister gets this his first trip in Canada as Prime Minister was to Nunavut and I thought that was very strategic I have to let you go but you wrote that in some ways we're in the final stages of negotiating with the United States do you think Donald Trump actually wants a deal

he was saying yesterday that tariffs work because there are companies from Canada that are coming to the United States Does he actually want a deal? He's going to need a deal. People forget there is pressure on him as well. Inflation is building. The auto sector is losing billions, Matt.

Their supply chains are not built for this uncertainty. And you can't suddenly build up your own domestic capacity. And all of these jobs he wants to bring back. There aren't workers in the United States for a lot of these jobs. So the president's in a bit of a race against time as well. the inflationary pressures, and he's got midterms. If the auto industry and other sectors are in real trouble, if there's a recession, he will lose control over the House of Representatives.

So there's pressure on the U.S. as well, just not as great. So I wish the prime minister well, but let's turn that good tone into some wins. Aaron O'Toole, thank you very much. Thank you. Aaron O'Toole, former leader of the Conservative Party of Canada, now a distinguished fellow specializing in international trade at the Hudson Institute. He was with me in our Toronto studio. All right, it is October.

It is officially spooky season, which is great timing because there is a new Canadian thriller series out. It's called Wayward, and I think we should be talking about it. My name is Alameen Abdu Mahmood, and I love pop culture. And this week on my podcast promotion, I called up some of my favorite critics to get into the show about a school for troubled teens, and then things start to go wrong.

It is just wonderful. And it's bringing something new and interesting to the thriller genre. For that episode and a whole lot more, You can find and follow Commotion with Alameen Abdu Mahmoud on YouTube or wherever you get your podcasts. It is not just Canadians hoping for some resolution coming out of today's meeting. I hope the president of the United States has re-evaluated his tough guy approach to Canada and remembered our shared history over the last two centuries. And instead of coming in and trying to bully the president. Prime Minister, actually sit down and work to hammer out a deal that lifts everyone up.

That's the governor of Pennsylvania, Josh Shapiro, speaking on Sunday at the Great Lakes Summit in Quebec. He and other American leaders express their support for Canadian sovereignty and their hope that a deal is negotiated that will benefit both countries. Jacques Shore is a regulatory trade and government affairs partner at Gowling WLG law firm. He's in Ottawa. Jacques, good morning to you. Good morning, Matt. What are you expecting to see coming out of this meeting? Is it deal that could lift everyone up or a commitment to keep talking? Well, I hope so. I think that the fact that this meeting is taking place when it is important, the dialogue, the communication between our prime minister and the president, I think, is key

at the end of the day to making sure that the relationship is a strong one. This is, in my sort of respect, I would say this is a relationship-building effort. I mean, what we need to look at this is almost, while it's, you know, the second meeting in Washington essentially for the prime minister, it's getting to know you and getting to know all about you. And part of that is listening to what it is that the president is saying, listening to what Americans are saying and doing the very best we can to address those issues so that at the end of the day we achieve all that we need to. Do you think Canadians have patience for relationship building or do they, to Aaron O'Toole's point, want something concrete coming out of this? I think, look, I heard Aaron and I think his comments are excellent. I think that Canadians do appreciate the complexities here with an administration like this. We do know what the goals of this president is and it's sometimes very difficult to predict. But at the same time, I think that if we can get a sense that there is a good relationship that comes out of the meeting today and there is a opportunity for us to better understand, Canadians will provide our. prime minister and our government with a bit more time to walk through these issues. How much time are we talking about here, do you think? Well, how long of a game are we playing?

Well, you know, there are, first of all, we have some good friends in Congress when I think about people like Senator Tim Kane, Senator Klobuchar, Rand Paul, a Republican. I think that they are also working along with others in Congress to actually make the points that are important for us. I think that there is, you know, first of all, let's remember that we are probably We are in the best position we possibly could be when we look at Kuzma and we look at the fact that under the current trade arrangement that we have with the United States, we have essentially 93% of our trade is there and there is a zero tariff on that. So we're in an exceptionally good position there. However, steel, aluminum, lumber. I mean, these are all very, very, they're tough areas and they're very difficult with the kind of, I would say, you know, the penalties that really ascribe to those. to those tariffs. But when we look at the supply chain, much of that has not yet been affected, but some of it has been deeply affected. So it's being able to share some of the messaging, make it very clear that Americans are actually really feeling the pinch of something like this,

because there's no question this is not really sustainable. And I go back to a comment of years ago. It's about the economy, stupid. And at the end of the day, as we get towards the midterms as well, there has to be an appreciation that these things have to be clear. But we also have to. I think I appreciated the comment with regard to how we can demonstrate to the Americans that we can be partners. We are their best friends. They are our best friends. And we have to remember that for the same time, try to make sure we bring this up to a point where there is a level of respect. So in a sense, today I look at today essentially as being a session that is high impact in terms of the strength, for the relationship. But I

do want Canadians, I think others that are watching this very closely, to have low expectations for the moment, but ultimately looking at what the goal is, what we need to achieve. And I really do believe that we will get there, if we're smart about the way that we do it.

And not react, not react in a negative way. I think Canadians should understand Americans are our best friends. And while we diversify, by the way, I want to emphasize that, we obviously have to diversify our trade relationships as well. We just have a minute left. I just, I mean, this is the question that I asked Aaron O'Toole, which is what gives you the sense that Donald Trump is at all

interested in a deal? He announced yesterday upcoming tariffs, what, 25% on medium and heavy duty trucks. You can talk about the economy, but he doesn't seem to be backing off this approach. Yeah, for sure. And disappointing, you know, indeed. But I do think that with the smart folks that we have that are addressing these issues right now, we will achieve. what we need to. I think we need to remain positive. Look, I, you know, I know that something like F-35s, we're talking about procurement.

F-35s are important to the United States. We have to basically close that deal. I think that makes sense. It's the right, it's the right, you know, the right airplanes we're going to require. Let's maybe look, I'm a little bit different also. Maybe what we should do is put bourbon back on the, you know, on our shelves and

California wine. We are nice. Americans view us as nice. There's nothing wrong with that. Does nice work in a moment like this? Well, you know, I think nice can work with regard to all of the other friends that are out there that are standing up for us. How many times have I found myself in the United

States over these last few months? And they say, I am sorry you're going through that. And I think that's resonating because it's also going to resonate because their economy will suffer as a result of the inability of us to rely on supply chains and have the uncertainty that continues. Jacques, good to speak with you

about this. Thank you very much. A pleasure. Thank you so much. Shock Shore is a regulatory trade and government affairs partner at Gowling WLG law firm. He was in Ottawa. You've been listening to the current podcast. My name is Matt Galloway. Thanks for listening. I'll talk to you soon.

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