The Journal. - Canada’s New Leader Is Ready To Take on Trump

Episode Date: April 29, 2025

Mark Carney, a former banker, won Canada’s national election on Monday. Carney ran on an anti-Trump platform, and he's promised to try to decouple his country’s economy from its biggest trading partner and, lately, its biggest threat. WSJ’s Vipal Monga explains how Trump’s trade war and threats to annex Canada have upended the election. Annie Minoff hosts.  Further Listening: - Why Justin Trudeau Stepped Down  - Guns and Death Threats in Canada's Baby-Eel Fisheries  Sign up for WSJ’s free What’s News newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey, it's Jess. Annie Menoff, one of our senior producers, is going to be stepping in to do some hosting this summer while Ryan is out on leave. Enjoy. I have a question. Who's ready? Who's ready? Last night, Mark Carney celebrated his victory in Canada's election at a hockey arena in

Ottawa. Who's ready to stand up for Canada with me? —Carny, who had already been leading the Liberal Party, will continue to serve as prime minister. But a surprising portion of his acceptance speech wasn't focused on Canada. — America wants our land, our resources, our water, our country. — Never! Never. — And what was Carney's speech like?

— It was measured. — Our colleague Vipal Manga was there. — And a lot of it was focused at the U.S. In some ways, firing warning shots at Trump, letting him know that Canada realizes that his threats to annex Canada, his terror of war are a betrayal. We are over the shock of the American betrayal,

but we should never forget the lessons. What could this moment in Carney's election mean for U.S.-Canada relations? I think Carney represents sort of a turning of the page for Canada-U.S. relations. Longer term, what this means is breaking, in many ways, of one of the strongest global partnerships in the world. Welcome to The Journal, our show about money, business, and power. I'm Annie Minow.

It's Tuesday, April 29th. Coming up on the show, how Canada's Prime Minister won by standing up to President Trump. From early morning workouts that need a boost to late night drives that need vibes, a good playlist can help you make the most out of your everyday. And when it comes to everyday spending,

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Conditions apply to all benefits. Visit pcfinancial.ca for details. Conditions apply to all benefits. Visit pcfinancial.ca for details. Historically, the relationship between Canada and the U.S. has been pretty cozy. The countries are really wedded together. There's many families that have relatives on both sides of the border. Canadians love to travel to the U.S. and vice versa. I think Canada is the only country that has teams in the National Hockey League, NBA, and Major League Baseball. The two countries' economic ties also run deep. 80% of Canada's exports go to the U.S.

Canada is the largest foreign exporter of oil and gas and hydropower to the United States. It sends a lot of cars to the U.S. A lot of the Detroit manufacturers build cars here, about a million cars a year, and auto parts to the U.S. as well. Canada sends a lot of lumber, a lot of natural resources broadly. The two countries share a supply chain, so it's really hard to overstate just how close the countries are and to what extent the border between the two countries, at least from a business standpoint, is a bit of a fiction.

That's how it used to be. But recently, the U.S.-Canada relationship has taken a big hit. Soon after coming into office, President Trump started imposing tariffs on America's trading partners, including Canada. He's levied 25% tariffs on steel and aluminum, which really impacts major sectors of Canada's manufacturing economy. He's leveled tariffs on automobiles and auto parts and continues to threaten tariffs and reduce access for Canadians to the U.S. market.

That threatens to send Canada into a deep recession. The Bank of Canada has warned that a trade war with the U.S. could reduce Canadian standards of living. It's that serious. But it wasn't just economic. Trump also threatened Canada in a way that was much more existential. The real shock to Canada's psyche was this idea that Trump floated publicly that Canada should become the 51st state.

What I'd like to see Canada become our 51st state, we give them protection, military protection. That was deeply offensive to many Canadians and frankly very frightening. And I think the sort of stark reality of that, the geopolitical reality of that was a real shock to the system. And so how have Canadians been feeling about their southern neighbor, the U.S.? Well, they're quite angry. I mean, you know, there's this whole idea of elbows up that, you know, Canada's going to fight back against the U.S. that Canada's going to fight back against the US. And I do think the country has become unified in a real fundamental way. Canada is a huge country with very disparate regions

and there's a lot of internal fighting. And in many ways there had been schisms forming in Canadian society that for now, at least Trump, the common enemy, has papered over. Some Canadians have started wearing blue Canada is not for sale hats. Others are boycotting American whiskey. And instead of selling Americanos,

some coffee shops are selling Canadianos. That was the backdrop to Canada's election. And as a candidate, Mark Carney was able to tap into Canadians' anger. What resonated with Canadians emotionally was this sense of we're not going to back down, we're really strong, but we're tough and we're going to definitely hit back. We're facing the most significant crisis of our lifetimes because of President Trump's unjustified trade actions and his threats to our sovereignty.

He also tapped into this idea. I don't think he sugarcoated it, and Canadians appreciated that, that sending up to the U.S. and changing this relationship is going to be very painful for Canadians. But he also reminded Canadians that, you know, the country would stick together and help each other, and I think Canadians really like that.

And so let's talk a bit about Carney. What's his background? together and help each other and I think Canadians really like that. And so let's talk a bit about Carney. What's his background? He was born to two school teachers in Fort Smith, Northwest Territories, which is in the sub-Arctic. I mean, it's not even considered far north, but it's far. And he grew up wanting to play hockey, but he ended up going to Harvard in Oxford to study economics. From there he became a globe-trotting investment banker for Goldman Sachs and worked there for 13 years and then decided, you know, I'm going to go into public service. Carney would go on to run Canada's central bank. This was at a crucial moment during the 2008 global financial crisis. And then by 2012, he had become such a rock star in central banking, if you can imagine

that. Imagine such a thing. That he was recruited by the UK government to become the Bank of England's governor. Carney would run that bank during another crisis, Brexit. And became the face of the UK trying to deal with this massive change in their own society. So he's the guy who's dealt with crises before, specifically economic crises. He has, so he definitely has a reputation for keeping a cool head under fire and being able to deal with extremely complex issues in a very thoughtful way.

Then Carney got a chance to lead on his home turf. Justin Trudeau has announced he's stepping down as the Prime Minister of Canada and as the leader of his party. — After Trudeau's resignation earlier this year, Carney stepped in to replace him, and he soon called for an election. — The new Prime Minister, Mark Carney, has called a snap federal election for the 28th of April. That'll be just a five-week campaign.

In only five weeks, Carney gained enough support to win. Was Carney's rise surprising to you? I think it was. You have to remember that in January, right before Justin Trudeau quit, the Liberal Party had been in power for about nine years, and they were about 20 points beneath the conservatives in the polls, dead in the water. And then Carney came along, and I was skeptical that he'd actually be able to turn it around. And I'm not sure if Trump hadn't continually mentioned the 51st state that he would have

turned it around. It's a remarkable comeback. I don't think anything like this has ever been seen in Canadian elections. So how is Carney planning to take on Trump? That's next. The all-new, all-electric Can-Am Pulse motorcycle is your cheat code for the city. Light, agile, and stylish for all you smart commuters. Find your pulse today.

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—— —— —— —— —— —— —— —— —— There was a stagnant productivity, inflation was high, and the biggest problem facing Canadians was lack of housing. There weren't enough houses being built, rents were skyrocketing. It was a real problem, and those problems continue to persist.

And tariffs, I would imagine, have made that worse. Yes. We've already seen signs of a slowdown. The data is still a little bit mixed, but the Bank of Canada has definitely warned that you could see a big hit to GDP going forward. We've already seen some auto plants start to close in Ontario, which is the industrial heartland in the country's most populous province.

So the tariffs are already starting to have a big impact. — Carney has already taken some action against Trump's tariffs. He imposed counter-tariffs against the U.S. earlier this month. And he's looking to strike a new trade deal with Trump. — He does want to renegotiate a deal for access to the U.S. market. And he's once doubled down on trading relationships that Canada already has with Europe. And they're also part of the TPP deal that includes a lot of Asian countries.

So as the trade relationship with the US becomes shakier and something that Canada can't rely on, Carney's looking to deepen that relationship with other countries. Very much so. And, you know, we've got some indications that he might push for deeper integration with the European Union in terms of being a member of the European economic area like Norway or Iceland. It's not clear that Europe would necessarily be open to that but I think that's where his head is at. He wants to find other allies. But could any of these potential deals with other countries or blocs like Europe actually replace the US? Nothing can replace the US. Again, Canada's so close to the US.S. and they're bonded so

closely together that I don't think there's any expectation that the loss of access to the U.S. market is easily replaceable. So he's looking to diversify the trade relationships, but that only goes so far. It only goes so far. What about this idea that Trump has floated repeatedly of making Canada the 51st state? What can you expect to see from Carney about that? Carney has said that he demands respect from Trump, that Canada is only going to deal with Trump as a sovereign nation.

President Trump is trying to break us so that America can own us. That will never, that will never ever happen. Trump has already kind of tempered his tone a little bit. His antipathy for Justin Trudeau ran so deep that he stopped calling Trudeau Prime Minister, called him Governor Trudeau. He's been calling Carney Prime Minister so far, so there's something of an improvement there. Carney's Liberal Party fell short of a majority in the parliament.

That means that Carney will have to work with rival politicians to get things done. How much can Carney really do when it comes to standing up to Trump? How much leverage does he have? How much power does he have? I think Canada has a lot more leverage than the US realizes. Again, the supply chains are really tightly in mesh, so breaking those apart will also hurt the United States economy. And I'm not sure if the US policymakers realize just how deeply wedded those two economies are. The other

thing that Canada has is an abundance of natural resources. They have lots of oil and gas and Canada can use that sort of as a card. The other thing that Carney, maybe more than any other leader in the world, understands how the financial system works. He's an expert in the plumbing. Right. This is his superpower. That is his superpower. And I do think that having that knowledge gives Canada a lot more soft leverage, if you will, over the U.S. than the U.S. might realize. I do think that this is a big wake-up call for Canada, that, you know, the sort of the easy days of them just being able to send you know supplies, natural resources and goods to the US are over and that they're gonna have to find other ways to

grow. Carney has called all this a tragedy and I think he really means it's a global tragedy. It's a tragedy for Canadians, in some ways it's a tragedy for the US and in the way that this global order that the US itself created is now being broken by the US but he's also very pointedly said this is our new reality, we have to deal with it. Before we go, our series Trump 2.0 is wrapping this week. If you have any questions about the Trump administration and how its first 100 days in power went,

email us and let us know. Please send a voice note to thejournal at wsj.com. That's thejournal at wsj.com. That's all for today, Tuesday, April 29th. The Journal is a co-production of Spotify and The Wall Street Journal. If you like our show, follow us on Spotify or wherever you get your podcasts. The Journal is a co-production of Spotify and The Wall Street Journal. If you like our show, follow us on Spotify or wherever you get your podcasts.

We're out every weekday afternoon. Thanks for listening. See you tomorrow.