Canada 'will stand up to a bully', says PM contender Carney over Trump tariffs

Canadian leadership contender Mark Carney has stated that Canada will “stand up to bullying” after US President Donald Trump announced a 25% tariff on Canadian goods. In an exclusive interview with BBC Newsnight, Carney said Canada would “match the US tariffs dollar for dollar in retaliation.”

In addition to the 25% tariffs imposed on Canadian imports on Saturday, the White House also announced a 25% tariff on Mexican goods and a 10% tariff on Chinese goods. Carney, who announced his bid to lead Canada's ruling Liberal Party in January, previously served as the governor of both the Bank of Canada and the Bank of England.

Currently, Carney is one of five candidates vying to replace Prime Minister Justin Trudeau and has secured the most support among Liberal Party members of parliament. The leadership race will conclude on March 9th. The winner will succeed Trudeau, who announced his resignation in January, ending his nine-year tenure as prime minister and also stepping down as party leader.

Canada must then hold a federal election on or before October 20th to elect a new government. Currently, the Liberal Party is trailing its Conservative rivals in the polls. In response to the tariff announcement, Carney told Newsnight, “President Trump probably thought that Canada would cave.”

“But we will stand up to bullying, we will not back down,” he said. “We are united, and we will retaliate.” The former Bank of England governor stated that the tariffs “will damage the US reputation around the world.” He also said, “They will hit economic growth, increase inflation, and raise interest rates.” He added that this was “effectively the second time in less than a decade” that the US had “ripped up a trade agreement with its closest trading partners.”

The US-Mexico-Canada Agreement (USMCA), which effectively updated the North American Free Trade Agreement (NAFTA), a trilateral agreement in place since the 1990s, came into effect in 2020, near the end of Donald Trump’s first term. Economists believe that the newly implemented tariffs could have a devastating direct impact on the Canadian economy, and also potentially lead to price increases in the US.

Tariffs are a core part of Trump's economic vision. He sees them as a way to boost US economic growth, protect jobs, and increase tax revenue. Outgoing Prime Minister Trudeau has said that Canada will respond to the new tariffs with a "strong" and "immediate" response. Trump said on Friday that Canadian oil will be subject to a lower 10% tariff, which will go into effect on February 18th. The president also stated that he plans to impose tariffs on the EU in the future, saying that they treat the US poorly.