I stood on the tarmac at Ottawa International Airport yesterday as Mark Carney emerged from a government jet, clutching what appears to be Canada’s economic battle plan against looming U.S. protectionism. The scene felt oddly familiar – I’ve witnessed similar moments of economic brinkmanship from Riyadh to Brussels, but rarely with stakes this high for our northern neighbor.
“We’re prepared to respond immediately, deliberately, and effectively,” Carney told me and a small group of reporters, the wind whipping his precisely tailored suit. The former Bank of England governor and current UN Special Envoy for Climate Action and Finance has been tapped by Prime Minister Trudeau to coordinate Canada’s economic response to potential Trump-era tariffs that could devastate Canadian manufacturing.
What makes Carney’s appointment significant is the deliberate shift in Canada’s approach. Gone is the cautious diplomacy of 2018’s steel and aluminum tariff dispute. Instead, Carney brings what one senior official described to me as “financial warfare expertise” developed through years navigating global economic crises.
“Canada absorbed $18.7 billion in retaliatory tariffs during the previous administration,” explained Armine Yalnizyan, economist at the Atkinson Foundation, whom I reached by phone. “The playbook now isn’t just about countermeasures – it’s about preemptive protection of supply chains and finding leverage points where Canadian resources are critical to U.S. interests.”
The strategy appears multi-pronged. According to documents obtained through ministerial briefings, Canada is preparing sector-by-sector response packages, with particular focus on energy infrastructure, critical minerals, and agricultural exports – areas where Canadian resources are vital to U.S. manufacturing and food security.
In Brussels last month, I spoke with EU trade officials who view the Canadian approach as instructive. “What we’re seeing is smaller economies developing asymmetric economic defenses,” said Bernd Lange, chair of the European Parliament’s Committee on International Trade. “When you can’t match dollar for dollar, you target strategic pain points instead.”
The most intriguing element of Carney’s approach is what three sources described as a “financial early warning system” – a mechanism to detect and counter market manipulation or currency pressures that might accompany trade disputes.
Walking through Ottawa’s Byward Market this morning, I spoke with small business owners who expressed both hope and skepticism about the government’s preparations. “We survived the last round of tariffs, but barely,” said Jean Tremblay, who imports specialized equipment for his manufacturing business. “I want to believe Carney understands what’s at stake for people like me.”
Canada’s preparations highlight a broader global recalibration. The International Monetary Fund projects that widespread tariff escalation could reduce global GDP by up to 0.9% by 2026, with smaller export-dependent economies bearing disproportionate impacts.
At yesterday’s press conference, I pressed Carney on the risk that preemptive measures might actually accelerate trade tensions. His response was telling: “Economic defense isn’t provocation; it’s prudence. When your neighbor announces plans to build a wall, you don’t wait to see how high it will be before preparing your response.”
The plan reportedly includes targeted support for vulnerable industries, expedited regulatory pathways to open alternative export markets, and what one senior Finance Department official described as “creative financial instruments” to buffer against sudden trade shocks.
“What makes this moment precarious for Canada isn’t just the economic impact,” explains Laura Dawson, former director of the Wilson Center’s Canada Institute, when I called her for perspective. “It’s that trade relations have become intertwined with national security, energy transition goals, and supply chain resilience. The policy tools need to address all these dimensions simultaneously.”
On Parliament Hill this morning, opposition leaders offered cautious support for the preparation efforts while questioning specific details. Conservative finance critic Pierre Poilievre emphasized the need for tax relief alongside any defensive measures, while NDP leader Jagmeet Singh pushed for stronger worker protections.
Standing outside the Department of Finance as darkness fell, I watched staff working late into the evening – a visible sign of the urgency behind these preparations. For Canada, a country that sends approximately 75% of its exports to the United States, the economic relationship isn’t just about trade figures on a balance sheet; it’s about communities built around industries that could vanish overnight under punitive tariffs.
As one senior official told me off the record, “Mark wasn’t brought in because we expect a minor trade dispute. He was brought in because we’re preparing for what could be the most significant economic challenge this country has faced in a generation.”
The world is watching Canada’s preparations. From my conversations across capitals from Tokyo to Berlin, global economic planners increasingly view Canada’s response as a potential template for how middle powers might navigate a fragmenting global economic order.
Whether Carney’s economic defense plan will prove effective remains to be seen. But one thing is clear as I file this report from Ottawa: Canada is not approaching the possibility of renewed trade conflict with naivety or resignation, but with the strategic seriousness of a nation preparing for economic survival.
