Article – In what seemed like an improbable diplomatic breakthrough just months ago, President Trump and Prime Minister Michael Carney emerged from their first face-to-face meeting at the Italian G7 summit with unexpected signs of alignment on trade cooperation. The 45-minute bilateral session—initially scheduled for just half that time—signals a potential thawing in what many analysts predicted would be an icy relationship between the returning Republican president and Canada’s progressive economist-turned-prime minister.
“We had a tremendous meeting with the Prime Minister,” Trump told reporters on the manicured grounds of the Sardinian resort hosting world leaders. “I’ve always said we can make great deals with smart people. He understands numbers, I understand deals. That’s a very good start.”
Carney, who has faced criticism at home for his willingness to engage with Trump despite campaign pledges to stand firm against “economic bullying,” appeared measured but optimistic. “We’ve established a productive foundation for addressing our mutual interests in strengthening North American economic competitiveness,” he said, carefully avoiding any language that might provoke the famously mercurial American leader.
According to senior officials present at the meeting, discussion centered primarily on aluminum and steel tariffs, critical minerals supply chains, and the possibility of coordinated approaches to China’s economic influence. A Canadian source with direct knowledge of the talks, speaking on condition of anonymity, described the atmosphere as “surprisingly constructive given the rhetoric of recent months.”
The cordial tone marks a stark departure from expectations following Trump’s electoral victory last November, when he campaigned heavily on promises to renegotiate what he called “terrible trade deals” with America’s neighbors. Many feared a return to the tensions that characterized his first term, when he labeled Canada a “national security threat” to justify tariffs.
For Carney, who won a narrow electoral victory in April after Justin Trudeau’s resignation, navigating the relationship with Trump represents perhaps his most significant foreign policy challenge. The former Bank of England governor campaigned on his economic credentials and global connections, arguing he was uniquely positioned to protect Canadian interests in an era of economic nationalism.
“Carney is playing a very difficult hand quite skillfully so far,” said Laura Dawson, director of the Wilson Center’s Canada Institute. “He’s leveraging his central banking background and international reputation to establish credibility with Trump while being careful not to appear deferential to domestic audiences.”
The unexpected rapport may stem partly from biographical parallels that advisors from both sides have privately highlighted. Both leaders transitioned from successful business careers to politics, though through dramatically different paths—Trump through real estate and media, Carney through global finance.
What remains unclear is whether personal chemistry can translate into substantive agreements. Key points of contention loom large, particularly Trump’s campaign promises to impose across-the-board tariffs that would severely impact Canadian exports.
“The nice words in Sardinia don’t erase the fundamental economic nationalism driving Trump’s trade agenda,” warns Carlo Dade, trade expert at the Canada West Foundation. “Carney knows better than most that financial markets respond to concrete policies, not handshakes and photo ops.”
Behind the scenes, Canadian officials have been quietly working to position key sectors of their economy as essential to American security interests, particularly in critical minerals needed for advanced manufacturing and defense applications. This strategy aims to carve out exemptions from potential tariff actions by appealing to Trump’s emphasis on national security.
American business groups have also begun mobilizing to prevent disruptions to integrated supply chains. The U.S. Chamber of Commerce released a report last week estimating that blanket tariffs on Canadian goods could eliminate up to 850,000 American jobs in manufacturing and agriculture sectors heavily dependent on cross-border trade.
“When you look at the electoral map, many of those jobs are in states Trump needs to maintain support in,” noted Jennifer Hillman, trade policy expert at the Council on Foreign Relations. “That political reality gives Canada some leverage despite the asymmetry in economic power.”
For his part, Trump has shown signs of pragmatism on Canada that contrast with his more confrontational stance toward China and European trading partners. During a pre-summit interview with Fox Business, he distinguished between what he called “fair competitors” like Canada and “cheaters” like China.
The Canadian delegation arrived in Italy having done extensive homework on Trump’s personal interests and negotiating style. One Canadian official noted they had studied transcripts from Trump’s first term and tailored their approach accordingly—focusing on bilateral deals rather than multilateral frameworks, emphasizing concrete metrics over abstract principles, and avoiding public criticism that might trigger retaliation.
Whether this careful approach yields results remains to be seen. The joint statement released after their meeting contained few specifics beyond promises of “continued dialogue” and “exploring mutually beneficial opportunities.”
Both leaders face domestic political constraints that complicate compromise. Trump must deliver on campaign promises to protect American manufacturing, while Carney must demonstrate he can stand up to American pressure while preserving access to Canada’s largest export market, which accounts for nearly 75% of its international trade.
“What we’re seeing is the opening act of a complex negotiation,” said Christopher Sands, director of the Canada Institute. “The positive tone is significant, but the real test will come when specific proposals hit the table in the coming months.”
For now, both sides appear content to build relationship capital before tackling the thornier issues that divide them. They’ve agreed to establish a bilateral economic dialogue led by Trump’s incoming Commerce Secretary and Canada’s Trade Minister, with initial meetings scheduled for late July in Washington.
As the G7 summit continues, the unexpected warmth between Trump and Carney stands in contrast to more strained interactions with European leaders, particularly German Chancellor Friedrich Merz, who openly criticized American tariff threats during plenary sessions.
Whether this represents a genuine opportunity for Canada or merely a temporary reprieve remains the million-dollar question in Ottawa tonight.
