Canadian Prime Minister Mark Carney has rocketed to global celebrity status with his striking responses to Donald Trump’s chaotic actions in trade policy and geopolitics. On the home front, Carney has been just as frenetic.
Wed 30 Sep 2026 08.40 AEST
Photo: AAP Image/Lukas Coch
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Canadian Prime Minister Mark Carney has rocketed to global celebrity status with his striking responses to Donald Trump’s chaotic actions in trade policy and geopolitics.
His ascension in Canadian politics, and his bold interventions in a global policy world rocked by Trump’s insanity, have heightened his profile and influence exponentially. His now-famous January speech to global business elites at the annual conference of the World Economic Forum in Davos, Switzerland continues to resonate. There he spoke frankly of the collapse of the rules-based world order – an order which, he noted, was never all it was cracked up to be – and called on middle powers to cooperate in building countervailing power in the face of increasingly erratic hegemons (including the U.S.).
Most recently, in a speech to the European Parliament, he further developed his thesis about the need for cooperative pushback from democratic countries against Trump’s unilateralism saw European Commission President Ursula von der Leyen giddily responded by offering Canada ‘associate membership’ in the EU, a thing that doesn’t (yet) exist.
Days later, Carney helped launch a new alliance, called Partners for Multilateralism, with the EU, Brazil, India, and others.
On the home front, Carney has been just as frenetic. His Liberal government’s ‘Build Canada Strong’ agenda has moved quickly to accelerate regulatory approvals for major investment projects, reduce purported ‘barriers’ to trade between Canadian provinces, and launch industrial policies to support value-added manufacturing in various sectors – including autos, steel, railway equipment, defense, and digital technology.
Meanwhile, the bilateral relationship with the Trump administration has gone from bad to worse. This has likely been accentuated by Trump’s anger at being upstaged on the world stage by a credible and influential voice who is willing to challenge his nonsense. Trump initially imposed major tariffs on numerous Canadian products in 2025, part of his broader global trade war.
This violated a binding North American trade agreement with Canada and Mexico that Trump himself negotiated during his first term, in 2019! Like so many of Trump’s deals, this one wasn’t worth the paper it was printed on.
He has threatened more explicit aggression against both Mexico (threatening to send in U.S. troops) and Canada (pledging to use economic force to compel Canada to become the 51st state). Astoundingly, the Canadian government has begun making contingency plans for responding to a U.S. military attack, even though the two countries are still military allies through NATO and the North American Air Defense Command (NORAD).
Canada is one of only two countries (the other being China) that have levied retaliatory counter-tariffs against the U.S. In economic theory, a main reason why countries should not impose unilateral tariffs is the likelihood that other countries will respond in kind, leaving no side better off. But the obsequiousness of most world leaders (including Australia’s) in the face of Trump’s bellicose actions has largely negated that argument.
But despite this widespread global acquiescence, for American workers Trump’s tariffs are not working anyway: U.S. manufacturing investment and employment have both declined notably under his tariffs. This is mostly because the cost of imported inputs for U.S. industry (including essentials like oil, potash, and aluminium for which the U.S. depends on Canada for most imports) have become more expensive.
Canada’s counter-tariffs (originally imposed by Trudeau, but partly retained by Carney) have infuriated Trump. They chip away at the image of dominance he carefully cultivates and could inspire others (both globally and within the U.S.) to call out that this emperor has no clothes.
Most recently, Trump created an artificial deadline to push Canada into one of his unreliable trade ‘deals,’ threatening new 50% tariffs on a modest additional group of imports from Canada in August unless Canada conceded to various U.S. demands. Carney refused, Trump tariffed, and Canada counter-tariffed once again. Daring to retaliate against his unilateral actions elicited a torrent of abuse from Trump – ranging from more economic warfare (still more tariffs) to ridiculous acts (officially ‘renaming’ Lake Ontario, one of the Great Lakes, to Lake America).
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In military affairs, Carney is also moving to create countervailing power against Trump’s annexationist threats. The government is looking at redirecting previous commitments to purchase U.S.-made F35 fighters, to be potentially replaced by Swedish-designed (but Canadian-made) Gripen jets. He has signed several defense-related agreements with the U.K. and the EU, and even restarted defense cooperation talks with China.
Carney’s political standing at home gets stronger the more he stands up to Trump. Recent polls indicate more than 80% support for both rejecting Trump’s trade ‘deal’, and for building stronger ties with Europe. Meanwhile, the Trump-aping Conservative leader’s star has fallen dramatically; almost certainly he will be forced to resign before the next election. But fractures are emerging in his vision of how Canada can survive Trump, and thrive after he’s gone.
In his rush to accelerate private investment of any kind (petroleum extraction and pipelines), Carney has thrown aside Canada’s already-shaky commitment to climate policy. His ‘build fast’ strategy might accelerate private investment spending and economic growth (despite the disruptions from America), but at the expense of environmental reviews and constitutionally required consultation with Indigenous communities. That could soon backfire: past projects proceeding without proper constitution have been delayed for years by court challenges.
He is also alienating trade unions, who until now have supported the ‘elbows up’ nation-building strategy, by proposing new restrictions on the right to strike in key transportation sectors. All these measures are justified, in classic ‘shock doctrine’ fashion, by the supposed emergency of standing up to Trump.
Corporate Canada couldn’t be happier. They have a trusted investment banker in charge of the country, implementing core demands they advanced long before Trump was elected: to double down on fossil fuel extractivism, cut business taxes, and at least partially roll back Canada’s generally progressive labour laws.
So, while Carney accepts plaudits internationally for showing that even a smaller country can resist Trump’s dictates, a struggle is erupting at home over exactly what kind of country Canadians are fighting to protect. That struggle will become more intense in the months ahead. Canadians are strongly united in favour of resisting Trump’s threats. But there will be a historic debate among Canadians about the nature of the country that will come out the other end.
For Australia, another middle country, the lessons are clear. The Australian government should learn from the example of Canada – which is 25 times more economically exposed to Trump’s disruption (measured by the share of GDP dependent on exports to the U.S.), yet which has called out the illegitimacy of his actions and moved forcefully to buttress domestic industries in the face of these disruptions. Australia’s continued willingness to cede defense sovereignty to an erratic authoritarian President through the AUKUS treaty seems especially foolish.
But at the same time, Australians need to debate and define the kind of country they want to live in, as the geopolitical world fractures around them. There will be strong calls from the powers-that-be to double down on what Australia ‘does best’ (namely, extract and export resources, especially fossil fuels) as a response to new global uncertainty. Canada’s experience is a warning in this regard.
That would only lock Australia into longer-run dependence on foreign hegemons – whether that be the U.S., China, or someone else – with all the attendant economic, geopolitical, and environmental risks. The real imperative in this moment is to accept that the old rules of globalization are defunct. Countries must take their economic destinies fully into their own hands, including the capability to use all their resources (human and social, not just mineral) to build an economy that is self-reliant, sovereign, inclusive, and sustainable.
In this light, Mark Carney’s record offers a complex set of lessons. It is possible for middle powers to defend their sovereignty. But they need to be clear on what they want to do with it.
Jim Stanford is Economist and Director of the Centre for Future Work.
