Former Bank of England boss, Mark Carney, has certainly never lacked ambition, though the new task he’s set himself is quite the feat: leading Canada to victory in a trade war against Trump’s America.
“Americans should make no mistake… In trade, as in hockey, Canada will win,” vowed the incoming Canadian Prime Minister, as he warned that “Trump wants to destroy our way of life”.
After the results of the leadership contest to replace Justin Trudeau were announced last night, the 59-year-old promised to keep retaliatory tariffs against the US in place until “America shows us respect” and insisted he would also face down Trump’s threats to turn Canada into a 51st US state.
Characterising tensions with the country’s southern neighbour and largest trading partner as “dark days brought on by a country we can no longer trust”, Carney insisted: “Canada never, ever, will be part of America in any way, shape or form”.
The incoming PM has made it clear that Canada must stand up to a bully. But is he really the man to take on Donald Trump?
Carney’s victory in the race to succeed Trudeau as leader of the Liberal Party makes him by default the next Canadian Prime Minister, at least until national elections due by October. His rather glaring weakness is his lack of political experience, certainly in the traditional sense: he has been propelled to the highest office in the land without even being elected as an MP, let alone serving in cabinet.
That said, when it comes to Canada’s current woes, his past credentials are by all means of relevance.
During his time as Governor of the Bank of Canada and, later, Governor of the Bank of England, Carney handled a number of acute political-economic crises, such as the global financial crash, the eurozone crisis, sterling’s sharp slide after Brexit, and the very start of the pandemic.
Experience is one thing. Whether or not he handled these crises effectively is another. Anthony Peters is unconvinced. While Carney is widely praised for helping Canada to avoid the worst of the GFC, in Reaction today, Anthony argues that much of that credit belongs to Carney’s predecessor at the BoC, David Dodge.
When it comes to his ambitious new pledge to win a trade war against Trump, Carney may feel encouraged by market activity over the past few days. Activity that suggests Trump’s chaotic trade policy is already starting to have a detrimental impact on the US.
The US Dollar Index, which tracks the performance of the US Dollar, against six major currencies, fell 0.35% today to 103.56, hovering around the four-month low reached on Friday.
Last week, the dollar fell more than 3 per cent against major rivals, clocking its weakest weekly performance since November 2022, as investors fled to safe havens such as the Japanese yen and Swiss franc amid fears that Trump’s aggressive trade policies will hurt the US – and global – economy.
At the time of writing before the US markets close, the Nasdaq is down 4% on warnings the US is headed for recession.
Carney may well be right that Trump won’t win the trade war. Though he’s almost certainly wrong to suggest it will be beaten by Canada. His predecessor Trudeau’s assertion is probably more accurate: “There are no winners in a trade war”.
Caitlin Allen
Deputy Editor
Iain Martin
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Anthony Peters
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Zelensky arrives in Jeddah – Ukrainian President Volodymyr Zelensky has arrived in Saudi Arabia for a state visit. While he will not personally attend the talks tomorrow with US officials, a Ukrainian delegation is expected to push for a truce with Russia in the sea and sky. It comes as Russian forces advance further in the Kursk region and are close to encircling thousands of Ukrainian troops.
UK urges Israel to restore Gaza electricity supply – The British Foreign Office warned that Israel, which provides power to the only desalination plant in central Gaza, “risks breaching [its] obligations under International Humanitarian Law” after Eli Cohen, the Israeli energy minister, ordered the country’s electricity company to cut off electricity in Gaza. This is an apparent effort to force Hamas into a new hostage release deal, instead of moving to phase two of the original ceasefire agreement, and comes a week after Israel blocked the delivery of all food, fuel and medicines to the strip.
North Sea collision – Thirty-seven people have been brought ashore after a cargo vessel collided with an oil tanker in the North Sea, off the East Yorkshire coast. One person is in hospital while 36 others across both crews are safe and accounted for.
Potential perks of Planning and Infrastructure Bill – Under powers in the UK government’s upcoming bill, residents living within 500 metres of new or upgraded electricity transmission infrastructure could be given up to £2,500 off their bills over 10 years to reduce opposition to renewable energy infrastructure.
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Inside Russia’s shadow war in the Baltics. An FT visual story.
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The $1m Italian cactus heist that led to a smuggler’s downfall, in BBC Future
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The prospect of peace is reshaping markets, in ways both ominous and promising, writes The Economist
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COMPACT on Gustavo Petro, the ex-Guerrilla in his Labyrinth
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Growing Trump-Putin detente could spell trouble for the Arctic, writes The Conversation