The Decibel - Carney’s tricky trade balancing act

Episode Date: August 20, 2026

Canadians braced for new tariffs on Wednesday. Instead, U.S. President Donald Trump said he would hold off on 50 per cent tariffs for three more days because a “good” trade deal was in the works. The details of the tentative trade deal remain murky. But Prime Minister Mark Carney is insisting that progress is being made and met with his cabinet and Canada’s premiers on Wednesday afternoon.  Whatever the deal entails, the Prime Minister faces a difficult balancing act politically. The Globe’s senior political reporter, Marieke Walsh, explains all the different groups Carney must answer to in this fraught moment and what impact this could have on his political career. Questions? Comments? Ideas? Email us at [e-mail] Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Canada has been staring down another tariff deadline for weeks now. Wednesday was supposed to be the day that the U.S. would slap a new punishing round of tariffs on the Canadian economy. More than $28 billion worth of Canadian goods would have been hit by a 50% tariff. But here's what happened instead. On Tuesday night, just hours before the tariffs were set to take effect, U.S. President Donald Trump pressed pause, saying he's excited. extending the deadline for three days. He also said that Canada and the U.S. had reached a deal. In his words, a very good deal.

Then on Wednesday, Prime Minister Mark Carney posted on X, applauding the, quote, significant progress in the Canada-United States trade negotiations. Canada-U.S. Trade Minister, Dominique LeBlanc, later said the two sides are in the process of finalizing the text of a tentative deal. There's still a lot we don't know about this deal or tentative deal, depending on who you ask, but we expect to find out more in the coming days.

What we do know is that this is a delicate moment for the prime minister. He billed himself as the man that could stand up to President Trump and get the best deal possible for Canada. But achieving that means balancing a lot of different sides, the desires of the Canadian public, Canadian businesses, the provincial premiers, and on top of all of that, his relationship with the U.S. president. So today, we've got Marika Walsh on the show. She's the Globe's senior political reporter. She's been covering the ongoing negotiations, and she's here to tell us about this fraught political

moment for Mark Carney. I'm Cheryl Sutherland, and this is The Decibel from The Globe and Mail. Hi, Marika, thanks so much for joining me today. Thanks so much for having me. And I know this has been a long busy day for you, so I appreciate you making the time. And of course, the news on this apparent trade deal between Canada and the U.S. has been moving quickly. So just note, we are talking at 7 p.m. on Wednesday evening, and we still don't know everything. Okay, got that out of the way. Let's start by setting the stage.

What is at stake for Prime Minister Mark Carney in this moment? I think it is a real test of his leadership and his ability to bring Canadians and businesses along in his mission. and what he's trying to achieve for the country. And the reason why it is such a profound test for him is because this is exactly what he was elected to deal with. And so how voters assess his ability to actually handle Donald Trump navigate a trade deal is really going exactly back to why they chose him in the first place

and why they have stuck with him up until now and shown such high popularity and high approval. for him. But this is a test of whether he can hold that popularity and whether he can continue to bring them along. Okay, so lots at stake for the prime minister. And one of the frustrating elements of reporting on the story is that Canadian officials on the prime minister's office haven't been sharing much publicly about the trade negotiations with the U.S. Can you give us some examples of how secretive they've been? It kind of depends on the day. And I think there is some understanding that, of course, lots of stuff won't be shared at this time.

But to give you a sense of just how sensitive and walking on eggshells it feels sometimes, there was a moment a few weeks ago where Dominic LeBlanc's office wouldn't even confirm that he was at a public event where journalists were invited to. So that just highlights to you just how fraught this moment has been for Canada. and I think also it underscores or it suggests sort of the trauma maybe of the last year for these federal officials who have had to deal with this deal, no deal, deal, no deal situation with Donald Trump for so long. If you remember, the prime minister has several times in the last year said a deal was in hand or a deal was close only for the president to blow it up or say it doesn't exist. And so they have just handled this very carefully and been very careful in what they were willing to say for fear of it backfiring on them. Is this way of dealing with negotiations at this level of secrecy? Is this an unusual approach?

I think it's certainly unusual from the experience in the first Trump administration's renegotiation of the trade deal back then. I was speaking with someone today who used to be part of those negotiations in which industry and key sectors and businesses that were affected by the negotiations were constantly briefed and brought into the circle on what was going on. That hasn't been happening. In fact, I would say, you know, from Tuesday morning until Wednesday evening, it was almost a complete vacuum of information. The silence was deafening for these industries. and people were desperate to get any intel on what they would be trying to live with, what they were going to be trying to, what environment they would be operating in once this deal came into effect.

We started to get some hints late on Wednesday, especially from premiers after their briefing with the prime minister. But the key details remain completely outstanding. And that's because negotiations actually continue, even though both the prime minister and the president have either said there's a deal or suggested one was essentially in hand. So you mentioned Carney briefed his cabinet and then after that on Wednesday he talked to the premiers about the negotiations. And some of the premiers are already talking. What have they said? The premiers have given us the most concrete information so far about what we know for sure

Canada will make as concessions. And that is that the prime minister asked the premieres to put the American alcohol back on the shelves in the stores where, it had been banned in places like the East Coast, Ontario, Quebec, and B.C. And also that the prime minister asked the premiers to end their provincial procurement policies that explicitly targeted or banned American companies from participating in those procurement deals. So those are two concrete examples of what the U.S. has asked for in return from Canada. And what's interesting here is that depending on how you look at this deal, Canada could be making concessions and more concessions because you could look at the concessions the United States

is making in two ways. Yes, we are hearing that the U.S. will lower the tariffs that imposed last year on those key sectors, metals, autos, and lumber. That we don't know by to what extent and if it will be on all of those sectors. But at the same time, Canada is conceding as well by accepting a certain level of tariff. And that is a completely different dynamic than you would have ever expected before two years ago. If somebody had told you two years ago or earlier that we would be ever in an environment where Canada was agreeing to 10 or 15 percent tariffs on key exports, people would have laughed at you. It would have just seemed so crazy and so out of step. And it certainly would not be positioned as something that it was a good deal for Canada.

But on Wednesday night, that's exactly what we heard from the premiers. In comparison to the alternative, they believe that Canada has negotiated what they called a good deal and a deal that in comparison to the status quo would make Canada still an enviable destination for business. So what you're saying here is that the goalposts have changed, and I think that might not be super surprising given who is in the Oval Office right now, but the goalposts have changed. Yeah, it is this big question, right? The Prime Minister, I don't believe, at least from the recollection of all the press conferences that I've watched from him, I don't believe he's ever told Canadians explicitly, we will be in a world where we are accepting some level of tariffs from the United States. His top Canadian negotiator, Janice Charette, did signal that to a business crowd in April, but that message has not been widely shared with the Canadian voter.

And when you look at Canadian voters, the public opinion polls show that they are not interested in more concessions. They are angry. That sort of anti-Trump wave that brought Carney to power last year against all odds is still very much there in many ways. and the public does not have the appetite or mood for more concessions. And so how this is all framed, how this deal is sold to Canadians is what will be such a big test for the prime minister's government, for his premiership, and for his legacy in terms of how he is viewed in the history books. On the premiers, to go back to the premiers for a moment here, you said that some of them are talking.

Who is talking right now? Yeah, I think that's such an important point, Cheryl, because sometimes, silence is louder or a bigger indication of something than somebody talking. We heard almost immediately after the call between the prime minister and the premiers from Tim Houston from Nova Scotia and Scott Moe from Saskatchewan. And of course those premiers are important. Their voice is important. They shared actually very concrete information that was helpful for journalists who are just trying to get the news out to Canadians who are trying to understand what's happening. But those premieres have not been the most vocal in terms of pushing back against the Trump tariffs and have not been the

most vocal in terms of trying to set red lines for what it would take for them to agree to concessions like putting the alcohol back on the shelves. So as of the beginning of our recording, we had not yet heard from Ontario Premier Doug Ford. And he is somebody who has made very clear that he wants to see clear help for the auto sector if something like booze was going to go back on the shelves. And we don't yet know where those tariffs on the auto sectors are. And we haven't yet heard from Premier Doug Ford. Another Premier that's really important to be thinking about right now and where they will end up landing is David Eby, because the tariffs have also hit the lumber sector, which is a huge part of the BC provincial economy. And all of our reporting up until, you know,

Tuesday, Wednesday, was that the U.S. did not have any interest in reducing the tariffs on lumber. We do not know where that ended up landing or where that will land when the deal is finally confirmed, but it will be very challenging for David Eby to put alcohol back on the shelves if there's nothing done for lumber families because he talks about forestry families. That's how he refers to them and he talks about the need to protect them. And so how he, for example, navigates this will be very important to watch, not just for what it means about the quality of the deal, but also for his own domestic politics. So it's just important to note who we're hearing from because they're not all equally affected by the tariffs that are in place right now. I don't think that necessarily means that the premiers will be divisive or go against Marc Carney.

In fact, when I'm hearing from that call is that premiers do not want to be appealed. to be the people who spoil this deal. They want to be appearing to support the prime minister in this really difficult and consequential moment. But certainly some premiers are navigating a much more difficult economic and political climate than others. When it comes to other premiers, like you mentioned, Mo and Houston, is it helpful for the premiers to comment publicly at this time? My understanding is actually that the prime minister's office, the federal government, are looking for people outside of Ottawa to be laying the groundwork for this deal, to be encouraging the notion or laying the groundwork that this is a good deal on relative terms, setting the stage,

setting the bar by which to measure the deal when we finally see the details. Essentially, in a way, Tim Houston and Scott Moe are doing the prepositioning for Mark Carney before he has his press conference. From the federal side, the prime minister's office released a brief statement, a sort of readout on the prime minister's meeting with the premiers, in which it said that Mr. Carney underscored the importance of a strong team Canada approach in this moment. And he reiterated that the government is aiming to get the best deal for Canadians. Though Cheryl, he did not say what that deal would be.

We'll be right back. Okay, let's talk about the business interests. in this. So specific sectors have been hit hard by tariff so far, like the auto industry in Ontario, the lumber industry in BC, and of course steel and aluminum. So we still don't know what the new tariff level is. But how important is it for Carney to sell this deal to corporate Canada? My suspicion is that it might be easier to sell to the business community than it is to the average voter. Interesting. And the reason why I say that is because businesses have been hungry for a deal. Businesses have been hungry for more stability. And we know this both from the advocacy

that the organizations that represent them in Ottawa have done, but also from other comments. For example, we saw, I believe, the Japanese ambassador telling CTV that Canada's access to the United States is a key selling point for the international community when Canada is trying to attract more business investment here. And so, of course, with the caveat that we don't yet know what's in this deal, but my guess is that the prime minister thinks he can sell this to the broader business community in a way that will be seen as amenable and better than the uncertainty of this constant cycle of tariff threats and not knowing where things are going.

The other thing to keep in mind is that the prime minister is juggling many different files. and he has a major investment summit coming up in Toronto in September, where he is trying to attract huge foreign sovereign wealth funds to the country. And so having a better, more stable trading relationship with the United States in advance of that is really important to be able to be seen as a reliable partner that when you come to Canada, you know what your playing field is, you know what the rules of engagement will be with Donald Trump, however that means. Some people are saying, can you really trust any deal?

I think that is a big question mark. But the hope from the prime minister's office is that this brings stability and ends the, I think, sort of never-ending fight on trade to move on to other issues. I want to pick up on that point about stability and this hope that this will bring stability because we do know that Trump likes to ignore or. rip up his deals, right? So how stable could this be? How is it the business community will feel this stability based on what we know from the past? I think that's an open question, but I think something that is missed in Canada a little bit is how much the U.S. business community also

wanted this addressed. How much the U.S. business community also wanted some stability and a clear line of sight on what the rules of engagement would be with Canada in order to confirm their supply chains and make investment decisions. And so, of course, Donald Trump is going to Donald Trump. I think everybody accepts that at this point, but they're trying to work around it and trying to, within those confines, still get to something better than this sort of giant question mark or limbo that we had been in. Let's talk about the Canadian public because you mentioned that this is going to be a tough sell to Canadians. There was an Angus Reid poll released this week that found less than a quarter of Canadians are in favor of Canada offering concessions to the U.S.

So they don't want capitulation. But we do know Canada will concede on alcohol and provincial procurement. In other words, policies that exclude the U.S. firms from government contracts at the provincial levels. How does Carney sell that story to Canadians if there are concessions? It's a big question mark. In part, we can't answer that yet because we don't know the details. But we do know that there was a lot of fear and worry, for example, around the auto industry, that the tariff rate that Canada would agree to would be so high.

It would essentially spell the beginning of the end of the auto industry in Canada. with the companies doing more and more investment and new manufacturing in the United States instead of Canada. So that's a big question mark. That's political and economic because it is a very important industry in Ontario that hires a lot of people. It's a lot of jobs. And how that gets managed, what supports are given if there are higher tariffs, will be a major thing to watch for. because I think that could be maybe the thornyest thing for Mark Carney. But going broader to what you said about the public mood,

it's not just Angus Reed polls showing that. So many polls this summer have shown very low levels of any appetite for concessions. And we need to remember that Mark Carney was very clear when he won power last year. The language he used was about fighting back against Donald Trump. not letting Canada be pushed around. Elbows up was that famous tagline that he did in the ad with Mike Myers. On top of that, just in October, he said that he would get an even better deal for Canada. And so the question really is, do Canadians look at those past comments and then look at this deal and say, well, that doesn't add up, or do they look at this deal and say, this prime minister did the best he could

in the face of an unreliable, unpredictable president? That is something that we will only know in retrospect. We won't know this week how Canadians judge that, but it's possible that they decide that the person who's unreliable, the person who's not to be trusted is Donald Trump and not Mark. Carney. Yeah, I mean, what you're talking about here is a real shift in tone, right, Marika? And of course, people might remember that Carney often said, no deal is better than a bad deal, but we're kind of not in that world anymore. That's right. And again, we don't know how to characterize this deal yet for Canadians. We don't know what the details, the nitty, gritty numbers, not the headline numbers, but all the carve-outs and everything else

and exemptions that they negotiate will end up meaning for the industries. What we do know is that it will not be nearly as good as the economic climate or the economic trading relationship or the rules of the game between Canada and the U.S. that we had two years ago. We know it will be worse than that

because we know tariffs will be baked into this deal. The question is how steep will. they be and what will they cover? Okay, so we've talked about all these things that Carney has to balance, but we haven't talked about how Carney has to manage his relationship with Trump. So let's talk about that now. How does he try to convince the Canadian public that this is the best possible deal for Canada without antagonizing the U.S. administration? That's a great point. We know, for example, that Donald Trump and his administration were not happy in the first term about how much Justin Trudeau and Christia Freeland

crowed about what they thought was a win for Canada in the renegotiation of the NAFTA deal that led to the Canada-United States-Mexco deal. And so I think part of the reason why we're seeing the prime minister be so cautious and part of the reason why, for example, on Tuesday night, Donald Trump is the one that made the announcement and then Mark Carney made a statement later

is to try and let Donald Trump, Donald Trump sort of lead the public comms and not be offside of those. So on Wednesday, the president spoke at least twice to cameras about the deal. And meantime, Canadians have yet to see Prime Minister Mark Carney on camera. I think it speaks to how carefully they are walking this line. And I think it also explains why, for example, there was this message and tone shift earlier this year. You have to remember that in January, the prime minister warned the world at this now viral Davo speech about the rupture brought on by Donald Trump. He never said his name, but everybody knew what he was talking about.

And then in April, he said Canada's reliance on the U.S. had become a weakness. But then in May, at a speech in New York, the Prime Minister championed the economic integration of the two countries and essentially made a case for a fortress North America economic deal. And went so far as to say a strengthened Canada would make America great again. And a year ago in the election campaign, you would have been completely shocked to ever imagine that. Mark Carney would be championing Donald Trump's MAGA slogan. But that's where we were in May. And I think that that was part of the unfreezing of the relationship and the laying of the groundwork in order to get to the deal that we might be seeing this week. Yeah. To end here, Marika, you know, there's a lot of sides here that Carney has to balance. And, you know, he's enjoyed

significant popularity since he was elected. But this feels like he's stuck between a rock and a hard place and perhaps stuck maybe pleasing one side and not pleasing the other. So I don't know, is this the end of the honeymoon phase for Carney? The honest answer is that we don't know yet. But we do know that he is still incredibly popular. And because he's incredibly popular, he has a lot of political capital and therefore a lot of room to maneuver. So the political fortunes, the political momentum is still on this side, but this is absolutely an inflection point in his premiership. And what I mean by that is that it's possible, depending on what we see in this deal, that he has set the new ground rules for trade with the United States and

therefore for the Canadian economy. That could have huge impact on not just the next two years of Donald Trump, but on what the trading relationship is with the United States for many decades and administrations to come. And we just don't know yet whether it's an inflection point in the continued political capital and approval ratings that he has or whether it's what starts to chip away at that. Okay, Marika, we will leave it there. Thank you so much for coming on the show. My pleasure. Thanks for having me. That was Marika Walsh, the Globe's senior political reporter. That's all for today.

I'm Cheryl Sutherland. Tiff Lamb edited and mixed this episode. Our producers are Madeline White, Rachel Levy McLaughlin, and Mikhail Stein. Our editor is David Crosby. Adrian Chung is our senior producer,

and Angela Pichenza is our executive editor. Thanks so much for listening.