PM Mark Carney is back in Ottawa to deal with Trump’s trade war fallout

Prime Minister Mark Carney is pausing his federal election campaign for a third time to tackle U.S. President Donald Trump’s escalating global trade war.

Yiannis Damellos

Carney, who is running as the leader of the Liberal Party while still holding caretaker powers as the current Prime Minister during the federal election, is in Ottawa to lead a meeting of the cabinet committee focused on Canada-U.S. relations and national security officials.

Following Trump's announcement to pause his controversial “reciprocal” tariffs for 90 days on various countries with higher tariffs than his baseline of 10%, Canada has been notably excluded from this list. However, Canada is currently subject to three other types of tariffs introduced over the past six weeks: a 25% general tariff on U.S. exports of non-CUSMA compliant goods, a 25% tariff on steel and aluminum exports to the U.S., and a 25% tariff on the auto sector.

Trump stated that this suspension, which came shortly after his global tariff policy took effect at midnight on Wednesday, will reduce the tariff rate to 10% for all countries affected by “reciprocal” tariffs, exempting China, which now faces an alarming 125% tax on all goods exported to the U.S. due to its aggressive responses during the ongoing trade war.

Both Canada and Mexico will remain exempt from the baseline 10% “reciprocal” tariffs. However, the White House has previously indicated that these two nations would incur a 12% “reciprocal” tariff should the levies related to fentanyl be lifted.

Carney remarked that Trump's decision provides "a welcome reprieve for the global economy," while also noting that the existing tariffs and the potential for future ones are already having significant impacts around the world, including in Canada. "The stakes have never been higher for our economy," Carney stated during a campaign appearance in Brampton, Ontario, on Thursday.

This marked Carney's first conversation with Trump since taking office as Prime Minister late last month. He also expressed his willingness to initiate negotiations with Trump "immediately following the election" if his party successfully forms the government.