A Canadian Technocrat’s New Mission: A Radical Breakup With Trump’s U.S.
Wall Street Journal
By Vipal Monga
April 29, 2025 7:48 am ET
After his promises to protect Canadian voters from U.S. President Trump, Prime Minister Mark Carney must make quick work of a radical plan: decoupling Canada’s economy from its biggest trading partner and, lately, its biggest threat.
Carney, a technocrat who ran the Bank of Canada during the financial crisis and the Bank of England during Brexit, won Canada’s national election on Monday on the strength of his assertion that he is the right leader to take on Trump. Success means unwinding a Canadian foreign policy that since World War II has centered on building a closer union with the U.S.
Still, he appeared short of a majority in parliament on Tuesday morning, which could force him to seek help from rival politicians to push through his economic agenda.
Speaking to supporters after his victory early on Tuesday morning, Carney said Canada was entering into a new, uncertain era. “Our old relationship with the United States, a relationship based on steadily increasing integration, is over,” he said.
Carney said he plans to negotiate a new trade and security deal with Trump—who has threatened to make Canada the 51st state and hobble its export-reliant economy with tariffs—while at the same time supercharging Canada’s trade with Europe and Asia.
“The system of open global trade anchored by the United States, a system that Canada has relied on since the Second World War, a system that while not perfect, has helped deliver prosperity for our country for decades, is over,” he said. “These are tragedies, but it’s also our new reality.”
Carney, 60, has vowed to make Canadian manufacturing and energy production less reliant on the U.S. and lower trade barriers between provinces. Canada depends on U.S. trade for a fifth of its gross domestic product, and more than three-quarters of its exports go to the U.S.
Carney also plans to pursue closer integration with the European Union, a Canadian official said, perhaps with a deal similar to those Norway and Iceland have as members of the European Economic Area.
He will have a high-profile opportunity to position Canada as a standard-bearer for the global order Trump is forsaking when Canada hosts leaders from G-7 countries in Kananaskis, Alberta, in June.
“Canada is ready to take a leadership role in building a coalition of like-minded countries who share our values,” said Carney earlier this month. “If the United States no longer wants to lead, Canada will.”
Carney has told voters he would use his experience as an investment banker and central banker, and his relationships with global leaders, to make Canada less reliant on the U.S. But electoral politics required some new skills for a longtime public official with a professorial speaking style.
Aides and his wife, economist Diana Fox Carney, helped him tweak his delivery during speeches and hone his head movements to make reading between two teleprompters seem more natural, people familiar with the preparation said.
His pitch worked, turning what had been a 20-point deficit in the polls for the Liberals into a lead Carney never relinquished. “People were looking for an expert,” said David Coletto, chief executive officer of polling company Abacus Data.
Carney’s predecessor, Justin Trudeau, resigned in January after alienating voters by failing to address cost-of-living concerns. The Conservative Party, led by Pierre Poilievre, who embraced a Trump-like populism, seemed set to win the next election.
Trump’s repeated references to Canada becoming the 51st U.S. state stoked patriotism that superseded the cost of living or regional priorities for many voters. Carney, sensing his moment, entered the fray. He won the Liberal Party leadership and was sworn in as prime minister.
Even before he called a snap election, Carney flew to France to meet President Emmanuel Macron and to the U.K. to meet Prime Minister Keir Starmer.
“It is part of our history of being close to England and France. We have trade agreements with these countries but we will want to go even further, including a security partnership” Canadian Foreign Minister Melanie Joly said in an interview. “We won’t fall into the trap of being overreliant on the U.S.”
Trump’s tariffs on Canadian steel, automobiles and other goods, have slowed Canada’s economy. The Bank of Canada has warned the trade war could depress living standards for years.
“This is easily the most challenging time to be prime minister that we have seen in our lifetimes,” said Gerald Butts, who helped run Carney’s campaign and served as chief of staff to Trudeau. “Everybody has to deal with the change in the United States, but nobody else has a 9,000-kilometer border with the United States.”
The son of schoolteachers from the town of Fort Smith in Canada’s subarctic, Carney grew up hoping to play professional hockey. Instead, he studied economics at Harvard and Oxford, and worked in London, Tokyo, New York and Toronto as an investment banker for Goldman Sachs.
He became governor of the Bank of Canada in 2008. When the global financial crisis shook global credit markets, he helped negotiate a settlement among some of the world’s largest banks, including Deutsche Bank, the Canadian government and the holders of billions of asset-backed commercial paper.
“He represented the government’s interest well,” said Colin Kilgour, who advised holders of the debt in the negotiations.
George Osborne, U.K. chancellor of the exchequer under former Prime Minister David Cameron, recruited Carney in 2012 to run the Bank of England. Osborne wanted a splashy hire to demonstrate he was serious about strengthening Britain’s financial system, said a person close to the hiring process.
Carney wouldn’t take the job until Osborne shortened the governor’s term from eight years to five. David Cameron, the U.K.’s prime minister at the time, said in a statement to The Wall Street Journal that Carney helped recharge the U.K.’s economy after the financial crisis.
The U.K.’s 2016 vote on whether to leave the EU presented a bigger challenge. Supporters of the Brexit campaign criticized Carney for warning that leaving the bloc would lead the U.K. into recession. But when the U.K. voted to leave, he helped stabilize the economy and calm markets.
His preparedness impressed Davide Serra, CEO of Algebris Investments, a global financial-services investor. “He had a plan, and he was ready,” Serra said. “He’s a guy with a backbone.”
After leaving the Bank of England in 2020, Carney worked as the United Nations’ special envoy on climate action and finance. He convinced the world’s largest financial institutions to join a coalition in 2021 that pledged through their investment and lending businesses to help drive a shift to reduce global carbon emissions.
The coalition fell apart this year. As caretaker prime minister since March, Carney, too, has pulled back from climate initiatives including an unpopular consumer carbon tax that Trudeau championed to reduce greenhouse gas emissions. Carney has promised to speed up permitting for natural-resource projects and infrastructure, possibly including new pipelines to carry Canadian oil.
He also signed a deal in March with Australia to buy radar systems to bolster Canada’s defense capabilities in the Arctic, and instructed Canada’s defense department to review a deal to buy fighter jets from the U.S.
Flavio Volpe, a member of a group of business and labor leaders advising Carney on Canada-U.S. relations, said Carney takes a no-nonsense approach to policy. In meetings with the group, the Canadian leader has demonstrated a grasp of the practical difficulties of dealing with Trump’s tariffs. But, Volpe said, voters might need more than policy prescriptions to withstand the consequences of Trump’s trade war.
“Sometimes you need to inspire people to convince them to walk over glass with you,” Volpe said.
By Vipal Monga
April 29, 2025 7:48 am ET
After his promises to protect Canadian voters from U.S. President Trump, Prime Minister Mark Carney must make quick work of a radical plan: decoupling Canada’s economy from its biggest trading partner and, lately, its biggest threat.
Carney, a technocrat who ran the Bank of Canada during the financial crisis and the Bank of England during Brexit, won Canada’s national election on Monday on the strength of his assertion that he is the right leader to take on Trump. Success means unwinding a Canadian foreign policy that since World War II has centered on building a closer union with the U.S.
Still, he appeared short of a majority in parliament on Tuesday morning, which could force him to seek help from rival politicians to push through his economic agenda.
Speaking to supporters after his victory early on Tuesday morning, Carney said Canada was entering into a new, uncertain era. “Our old relationship with the United States, a relationship based on steadily increasing integration, is over,” he said.
Carney said he plans to negotiate a new trade and security deal with Trump—who has threatened to make Canada the 51st state and hobble its export-reliant economy with tariffs—while at the same time supercharging Canada’s trade with Europe and Asia.
“The system of open global trade anchored by the United States, a system that Canada has relied on since the Second World War, a system that while not perfect, has helped deliver prosperity for our country for decades, is over,” he said. “These are tragedies, but it’s also our new reality.”
Carney, 60, has vowed to make Canadian manufacturing and energy production less reliant on the U.S. and lower trade barriers between provinces. Canada depends on U.S. trade for a fifth of its gross domestic product, and more than three-quarters of its exports go to the U.S.
Carney also plans to pursue closer integration with the European Union, a Canadian official said, perhaps with a deal similar to those Norway and Iceland have as members of the European Economic Area.
He will have a high-profile opportunity to position Canada as a standard-bearer for the global order Trump is forsaking when Canada hosts leaders from G-7 countries in Kananaskis, Alberta, in June.
“Canada is ready to take a leadership role in building a coalition of like-minded countries who share our values,” said Carney earlier this month. “If the United States no longer wants to lead, Canada will.”
Carney has told voters he would use his experience as an investment banker and central banker, and his relationships with global leaders, to make Canada less reliant on the U.S. But electoral politics required some new skills for a longtime public official with a professorial speaking style.
Aides and his wife, economist Diana Fox Carney, helped him tweak his delivery during speeches and hone his head movements to make reading between two teleprompters seem more natural, people familiar with the preparation said.
His pitch worked, turning what had been a 20-point deficit in the polls for the Liberals into a lead Carney never relinquished. “People were looking for an expert,” said David Coletto, chief executive officer of polling company Abacus Data.
Carney’s predecessor, Justin Trudeau, resigned in January after alienating voters by failing to address cost-of-living concerns. The Conservative Party, led by Pierre Poilievre, who embraced a Trump-like populism, seemed set to win the next election.
Trump’s repeated references to Canada becoming the 51st U.S. state stoked patriotism that superseded the cost of living or regional priorities for many voters. Carney, sensing his moment, entered the fray. He won the Liberal Party leadership and was sworn in as prime minister.
Even before he called a snap election, Carney flew to France to meet President Emmanuel Macron and to the U.K. to meet Prime Minister Keir Starmer.
“It is part of our history of being close to England and France. We have trade agreements with these countries but we will want to go even further, including a security partnership” Canadian Foreign Minister Melanie Joly said in an interview. “We won’t fall into the trap of being overreliant on the U.S.”
Trump’s tariffs on Canadian steel, automobiles and other goods, have slowed Canada’s economy. The Bank of Canada has warned the trade war could depress living standards for years.
“This is easily the most challenging time to be prime minister that we have seen in our lifetimes,” said Gerald Butts, who helped run Carney’s campaign and served as chief of staff to Trudeau. “Everybody has to deal with the change in the United States, but nobody else has a 9,000-kilometer border with the United States.”
The son of schoolteachers from the town of Fort Smith in Canada’s subarctic, Carney grew up hoping to play professional hockey. Instead, he studied economics at Harvard and Oxford, and worked in London, Tokyo, New York and Toronto as an investment banker for Goldman Sachs.
He became governor of the Bank of Canada in 2008. When the global financial crisis shook global credit markets, he helped negotiate a settlement among some of the world’s largest banks, including Deutsche Bank, the Canadian government and the holders of billions of asset-backed commercial paper.
“He represented the government’s interest well,” said Colin Kilgour, who advised holders of the debt in the negotiations.
George Osborne, U.K. chancellor of the exchequer under former Prime Minister David Cameron, recruited Carney in 2012 to run the Bank of England. Osborne wanted a splashy hire to demonstrate he was serious about strengthening Britain’s financial system, said a person close to the hiring process.
Carney wouldn’t take the job until Osborne shortened the governor’s term from eight years to five. David Cameron, the U.K.’s prime minister at the time, said in a statement to The Wall Street Journal that Carney helped recharge the U.K.’s economy after the financial crisis.
The U.K.’s 2016 vote on whether to leave the EU presented a bigger challenge. Supporters of the Brexit campaign criticized Carney for warning that leaving the bloc would lead the U.K. into recession. But when the U.K. voted to leave, he helped stabilize the economy and calm markets.
His preparedness impressed Davide Serra, CEO of Algebris Investments, a global financial-services investor. “He had a plan, and he was ready,” Serra said. “He’s a guy with a backbone.”
After leaving the Bank of England in 2020, Carney worked as the United Nations’ special envoy on climate action and finance. He convinced the world’s largest financial institutions to join a coalition in 2021 that pledged through their investment and lending businesses to help drive a shift to reduce global carbon emissions.
The coalition fell apart this year. As caretaker prime minister since March, Carney, too, has pulled back from climate initiatives including an unpopular consumer carbon tax that Trudeau championed to reduce greenhouse gas emissions. Carney has promised to speed up permitting for natural-resource projects and infrastructure, possibly including new pipelines to carry Canadian oil.
He also signed a deal in March with Australia to buy radar systems to bolster Canada’s defense capabilities in the Arctic, and instructed Canada’s defense department to review a deal to buy fighter jets from the U.S.
Flavio Volpe, a member of a group of business and labor leaders advising Carney on Canada-U.S. relations, said Carney takes a no-nonsense approach to policy. In meetings with the group, the Canadian leader has demonstrated a grasp of the practical difficulties of dealing with Trump’s tariffs. But, Volpe said, voters might need more than policy prescriptions to withstand the consequences of Trump’s trade war.
“Sometimes you need to inspire people to convince them to walk over glass with you,” Volpe said.
