The way this specific diplomatic standoff has been developing has an almost theatrical quality. On the one hand, there is a former governor of the Bank of England who speaks in deliberate compound sentences, alternates between French and English during press conferences, and once made a quiet political joke out of a broken teleprompter. Conversely, a president who, in a speech in Las Vegas, referred to the entire nation as “nasty” seemed to be making a policy statement. The stakes are very real, and the contrast is striking.
Last Wednesday, Trump declared, “Canada’s nasty,” in front of a crowd in Las Vegas. Yes, they are. They are unpleasant. Although I adore the people, they are rude. It landed with the casual force of a casual insult: “Nasty leadership.” However, it was not overlooked in Ottawa. When asked about it the following morning, Carney laughed heartily before doing something intriguing: he essentially agreed with the word choice. “The adjective can be altered. “You can say ‘nasty,'” he said to reporters, fusing French and English in his well-honed manner. However, this is a Canadian employment issue. The future of Canadian companies is at stake.
When you think about it, that is actually a subtle move. Carney absorbed the framing and redirected the energy instead of resisting it. Perhaps as a result of years of managing central bank politics and financial crises, where the wrong word in the wrong tone affects markets, this type of response feels inherently diplomatic. He’s not acting outraged. He’s handling a circumstance.
The context of all of this is truly significant. Last month, Trump signed an order imposing 50% tariffs on a variety of Canadian goods, valued at about $20 billion. The full implementation of the tariffs is due on August 19. Canada’s own countermeasures against previous U.S. tariffs on Canadian steel, aluminum, and automobiles were partially responsible for the order. One could argue that this is a tariff spiral, with each side using the other’s most recent action to support their own.
The fact that formal trade negotiations between the United States and Canada have not been scheduled in the same manner as those with Mexico adds to the complexity of the situation. However, U.S. Trade Representative Jamieson Greer met with Dominic LeBlanc, Canada’s minister in charge of U.S. trade, and chief trade negotiator Janice Charette on Thursday in Washington; according to Carney’s office, the meeting lasted an hour longer than planned. Afterward, LeBlanc called it “constructive and detailed,” which is the diplomatic equivalent of stating that both parties are still present.
One thing Carney has consistently stated is that Canada is not interested in a limited, issue-specific agreement. He desires something all-encompassing. Carney himself admitted that it is genuinely unclear if that can be accomplished before August 19, stating “we’ll see” when pressed for time. It’s an uncommon instance of apparent uncertainty from a leader who usually exudes measured confidence, and it likely reflects the complexity of the situation.
Tensions predate the speech in Las Vegas. Carney indirectly criticized what many perceived as American economic pressure on smaller countries at Davos in January. “Canada lives because of the United States,” Trump retorted bluntly. Mark, keep that in mind. That exchange, in which both men established the register in which they would operate, seems to be the true beginning of this conflict.
It’s difficult to ignore a certain irony as you watch this unfold. As a central banker, Carney spent years attempting to completely avoid discussing his personal opinions in public. His cautious, dry, and unflappable personality now proves to be one of his more effective tools in one of the most prominent trade disputes Canada has seen in decades.
