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PM Carney navigates escalating U.S. tariff threats with cautious diplomacy

Published July 26, 2026 at 8:32 AM UTC

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Prime Minister Mark Carney has taken the lead in Canada's response to renewed U.S. tariff threats, warning that 'everything is on the table' if Washington imposes a new 50% levy on Canadian goods. The statement came after President Donald Trump signalled plans to escalate trade penalties, reigniting fears of a deeper economic conflict between the two allies. Carney's approach combines a firm public stance with behind-the-scenes negotiations, as he seeks to avoid a full-blown trade war while protecting Canadian industries. The situation has drawn sharp reactions from provincial premiers and business groups, who are divided over the best strategy. Some experts argue Canada holds leverage through its energy exports and critical minerals, but others warn that a prolonged dispute could hurt both economies. The Conservatives have demanded an emergency parliamentary session, accusing Carney of failing to present a clear plan. As talks continue, the prime minister faces mounting pressure to balance deterrence with diplomacy.