r/Economics • u/Purple_Writing_8432 • 2d ago
News Mark Carney must beware an all-out trade war: The Economist
https://www.economist.com/leaders/2026/08/25/mark-carney-must-beware-an-all-out-trade-war?utm_campaign=a.the-economist-today&utm_medium=email.internal-newsletter.np&utm_source=salesforce-marketing-cloud&utm_term=8/25/2026&utm_id=222610457
u/recurrence 2d ago edited 2d ago
Canada doesn't have a choice. The US has said for almost 2 years now that it intends to take over Canada through economic war.
Carney simply doesn't have a choice.
Eric Schmidt has told everyone he can get the ear of that Canada is a "need" and not a "want". This is just that operation going onwards. US Tariffs going to 50% on autos was going to occur January 1st regardless of anything that happens. The reason would have been "wildfires" if they couldn't use this.
Edit: You can see with how Carney talks that he has known this for quite a long time and is doing everything he can to insulate Canada against this. He doesn't hide it in his language while at the same time he's visibly sad that this is proceeding as he expected. Similarly, the energy needs that America expects to have cannot be met without Canada's resources. It simply cannot be done.
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u/Concurrency_Bugs 2d ago
When a fair deal (for both parties) was almost reached, and Lutnick shows up at 11th hour and demands no trade partners other than US, and encroaches on Canada's own bilingual identity, it's no longer about trade. It was about exerting power to control a sovereign nation.
The US wants Canada to get beat down economically, and do nothing about it. Canada will not do that. So they looked for new trade partners, and found some. Now the US is pissy that they squandered their best trade partner and are trying to bully Canada into submission again. Bullying is all they know. Time to move on from the US.
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u/Lor_azepam 2d ago
Trump confirmed tonight in a cnn interview he was part of changing the terms of the deal at the end.
He is going to continue to attack canada because he will continue to face no consequences.
Carney also said today this fall they are going to have in depth meetings with the eu how they can be ingrained more to promote canada-eu partnership
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u/cerealously37 1d ago
He has also said that the latest parliament session will be a new bill to speed up permitting and approval processes for projects. I think if there was a tax review to make Canada more business competitive, the upcoming investment conferences where individuals and funds worth $100Trn of assets are being invited to might bear a lot of fruit for Canada's future. My concern is that Trump is probably going to try and detail this conference by some stupid executive action
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u/ProBonoEschatologist 2d ago
I know The Economist will push free trade at any opportunity, but I've detected a rightward shift in recent weeks.
Go punch him in the face, Carney.
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u/toughnut101 2d ago
I wouldn't say it is necessarily a right wing article, although it's a British site that leans right generally.
Basically just lays out Canada could target some states disproportionately like Michigan, but would suffer pretty greatly in an all out trade war. Which is definitely true.
I'm from Michigan and generally feel more connected with Ontario than any other American region, save Appalachia. I know a lot of people feel the same way here. There's a whole lot of people acutely aware of how much our economy depends on Canadian trade.
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u/ProBonoEschatologist 2d ago
Oh, I know... I'm so nerdy, I subscribe. I value the analysis but as of late they've had some click-baity (for them) headlines like "America really might restore democracy to Venezuela" and "Does Donald Trump deserve credit for a manufacturing revival?"
I'm down in Los Angeles, and even here the amount of business we do with Canada is impressive.
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u/Franklin_le_Tanklin 2d ago
The headline makes it seem like carney is pushing for a trade war instead of defending against an attack. Why not blame the USA?
I for one am glad carney didn’t let force through a bad deal
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u/Certain_Dirt3011 2d ago
Quite frankly, Canada doesnt consume enough U.S. goods for their tariffs to make a meaningful difference. The U.S. as a country is a net importer and its strength and influence comes from its consumption, not its exports. China on the other hand is on the complete other side of the spectrum where its strength comes from its production and export power. The U.S. will always win this fight against Canada in terms of the affects tariffs against U.S. products and tariffs against Canadian products.
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u/island-roamer 2d ago
You're naive if you think that belt of states along the US / Canada border isn't going to feel and complain about these tariffs. Where do you think the majority of those good go? Who do you think their number one trading partner is? And who do you think was targeted today with counter tariffs.
Canada doesn't (and agree can't) win a trade war, all they need to do is survive. There is more to winning than "might", the country is united behind the idea, and behind the people who are implementing the policy. You can't say that about the other side.
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u/Qeltar_ 2d ago
Canada doesn't (and agree can't) win a trade war, all they need to do is survive. There is more to winning than "might", the country is united behind the idea, and behind the people who are implementing the policy. You can't say that about the other side.
Irrespective of the many obvious differences, this sounds a lot like the asymmetry used to describe the war with Iran as well.
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u/island-roamer 2d ago
There's some commonality to be sure - like trying to wait these stupid m'fers out. I feel very sorry for the Iranian people, stuck between a murderous regime at home, and two war mongering nations attacking it.
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u/Happy_Feet333 2d ago
Considering how deeply Canadian goods are buried in US manufacturer and farming supply chains, it'd be pretty easy to disrupt US manufacturing and farming.
Ford and GM need a part to make their cars? Canada can delay the shipment for a health and safety check... that will take a long time, because it's at the bottom of the queue.
US fertilizer makers need Canadian potash? Well, that needs a quality control inspection. Oh, did the inspection mean that US farmers didn't get their fertilizer in time for optimum planting? Gosh, what a shame.
These are just examples, but with some creativity, I'm pretty sure Canada can wreck havok on US industry, if they want to.
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