Canada's New Prime Minister and the United States
Mark Carney has taken office as the new prime minister of Canada amid a higher level of economic and geopolitical uncertainty in that country than at any time in recent history. Whether his time in office is extremely brief or longer-than-expected will be determined by Canadian voters in the coming months. What is certain is that he will be faced with the challenge of managing an increasingly-fraught relationship with the United States, and that the decisions he makes in the coming weeks will go a long way towards defining Canada’s future.
What is Happening
Mark Carney officially became the new prime minister of Canada following the resignation of Justin Trudeau, who had held that position since 2015. This followed his overwhelming victory in the recent election for a new leader of Canada’s ruling Liberal Party which were called amid extremely low poll numbers for the Liberals.
During his inauguration speech, Prime Minister Carney vowed that Canada would never become a part of the United States after US President Donald Trump repeatedly claimed that Canada should become the US’ 51st state.
There is widespread speculation that the new prime minister will call for early federal elections in Canada in the near-future. This is due to the fact that the Liberals, who had been trailing the opposition Conservatives by a massive amount in polls taken earlier this year, have dramatically closed the gap with the Conservatives in recent weeks.
Implications
- Prime Minister Carney must balance maintaining relations with the Trump Administration in the United States with the need to maintain favorable access to the United States market, which accounts for more than 75% of Canadian exports.Given the importance of personal relationships to President Trump,
- Prime Minister Carney is going to have to find a way to work with the US president, if this is even possible. Look for the prime minister, as well as Canadian political and business leaders, to attempt to mollify President Trump in order to ease trade tensions between the US and Canada.
- At the same time, Prime Minister Carney knows that Canada is dependent upon the US market for economic growth and the US armed forces for Canada’s security. This could lead to the prime minister seeking to expand Canada’s trade ties in other parts of the world, particularly in Asia. Also, look for a serious debate on defense spending in Canada, as that country spends far less as a share of its GDP on defense than most other NATO member states.
Summary
Canada had grown comfortable with its preferential access to the vast United States market and its ability to avoid hard questions on security and geopolitics thanks to the protection it was afforded by being a neighbor of the US. This may no longer be the case, as President Trump’s actions and words towards Canada have shaken that country to its core. As such, Prime Minister Carney has taken office at a critical time in his country’s history, and the decisions that he makes in the coming weeks could go a long way towards defining Canada’s future.