Mark Carney’s Canada: A Strategy for the U.S.–Canada Trade War and the Coming CUSMA Test

Mark Carney’s Canada: A Strategy for the U.S.–Canada Trade War and the Coming CUSMA Test by Maj (ret’d) CORNELIU, CHISU, CD, PMSC FEC, CET, P.Eng. Former Member of Parliament Pickering-Scarborough East The renewed trade and tax confrontation between the United States and Canada has stripped away a comfortable illusion: that North American economic integration is permanently insulated from politics. Tariffs, industrial subsidies, and fiscal threats are no longer exceptional tools. They are becoming routine instruments of domestic politics in Washington. For Canada, this is not a passing squall but a new climate. In that context, the vision articulated by Prime Minister Mark Carney offers a sober and increasingly relevant guide—not just for managing the current trade war, but for navigating the high-stakes review and renegotiation of CUSMA now approaching. Carney’s core insight is disarmingly simple: economic stability can no longer be assumed. For much of the post-Cold War era, Canada built prosperity on a rules-based trading system anchored by the United States. That system still exists on paper, but in practice it is being distorted by security claims, domestic political cycles, and a revival of industrial policy. Carney does not romanticize the old order, nor does he propose retreat. Instead, he argues that Canada must adapt to a world where trade friction is structural, not episodic. This matters profoundly for CUSMA. The agreement was designed to provide predictability, yet predictability is precisely what has eroded. Tariffs imposed outside the spirit—if not always the letter—of the agreement, threats of tax retaliation, and the use of national security exemptions have all demonstrated the limits of legal texts when political incentives shift. Carney’s response is not to abandon free trade, but to make it credible again by grounding it in enforcement, resilience, and domestic legitimacy. One pillar of that approach is realism about power. The United States will always have greater leverage in bilateral disputes. Canada’s mistake, historically, has been to oscillate between moral suasion and symbolic retaliation. Carney’s vision rejects both. He insists that Canada’s leverage lies in being indispensable, not indignant. In practice, this means investing at home so that Canadian supply chains, energy systems, and industrial inputs are deeply embedded in North American production. The more disruption hurts the United States as well as Canada, the more restraint returns to policy. This logic should shape Canada’s posture in the coming CUSMA negotiations. Rather than framing talks defensively—as an effort to preserve what already exists—Canada should approach them as a durability exercise. Which parts of the agreement are most vulnerable to political weaponization? Where can clearer standards, stronger compliance mechanisms, and faster dispute resolution reduce the temptation to bypass the rules? Carney’s institutional mindset points toward tightening the agreement where ambiguity invites abuse, even if that requires uncomfortable adjustments at home. A second pillar of Carney’s vision is the integration of economic security into trade policy. Washington has been explicit that trade is now inseparable from security, whether the subject is critical minerals, advanced manufacturing, or energy systems. Canada has often resisted this framing, preferring to defend the purity of free trade. Carney would argue that this is a strategic error. Refusing the language of security does not prevent its use; it simply excludes Canada from shaping how it is applied. In the CUSMA context, this suggests a reframing of Canada’s negotiating stance. Rather than contesting every U.S. security-based measure as illegitimate, Canada should demonstrate where its own capabilities directly advance American security objectives. Reliable electricity grids, trusted mineral supply chains, nuclear expertise, and low-carbon manufacturing capacity are not peripheral assets; they are central to North American resilience. A Canada that can credibly present itself as a security partner is harder to target with blunt trade instruments. Nowhere is Carney’s thinking more distinctive than on environmental and industrial policy. He has long argued that the climate transition is not a cost centre but a competitive strategy. In the context of a U.S.–Canada trade war, this is not an abstract argument. As Washington deploys subsidies and border measures to favour domestic production, Canada faces a choice: treat climate policy as a moral position to be defended, or as an industrial advantage to be leveraged. Carney’s answer is clear. Climate alignment should be woven directly into trade negotiations. Canada should press for North American standards that reward low-carbon production, recognize clean electricity advantages, and integrate energy systems across borders. Done properly, this turns climate policy from a vulnerability into leverage. It also aligns with American industrial priorities, reducing the political appetite for punitive measures against Canadian exports. Another central element of Carney’s vision is credibility. Markets, allies, and even adversaries respond to predictability. Countries that maintain disciplined fiscal policy, independent institutions, and stable regulatory frameworks borrow more cheaply, attract investment more reliably, and negotiate from a position of confidence. In a trade war environment, this matters as much as tariffs or counter-tariffs. For CUSMA, credibility is Canada’s strongest card. A reputation for enforcing rules consistently—whether they favour or constrain domestic interests—strengthens Canada’s hand in disputes. It signals that retaliation, if necessary, will be lawful, proportionate, and sustained. Carney’s approach favours patience over theatre, and law over spectacle. That may be less satisfying politically, but it is more effective strategically. Critically, Carney does not promise an end to trade conflict. His vision assumes volatility will persist. The objective is not to eliminate friction, but to manage it without undermining long-term prosperity. This is a middle-power strategy for a harsher North America: absorb pressure without panic, invest domestically to reduce exposure, and negotiate agreements that are resilient enough to survive political swings. As the CUSMA review approaches, Canada faces a defining choice. It can cling to a nostalgic view of continental trade, hoping that appeals to partnership will override domestic pressures in Washington. Or it can adopt a more disciplined, strategic posture—one that accepts power realities while quietly increasing Canada’s leverage. Mark Carney’s vision points firmly toward the latter. In an age of trade wars and tax threats, a serious, professional approach is itself a form of power. Canada’s task is not to outmuscle the United States, but to make itself too valuable, too reliable, and too embedded to sideline easily. That is not a dramatic strategy. It is, however, the one most likely to endure.