Carney Rules Out New Trade Retaliation Before US Midterms, Even As He Mocks Trump and Courts the EU

Since Donald Trump slapped 50% tariffs on C$28 billion (€17.5 billion) of Canadian exports in August, prompting Carney to declare Canada was "at war" with the United States, the fight has cooled into something stranger: public mockery paired with private restraint.

Canadian Press reporting carried by CTV News on September 29 has Carney telling reporters he has "no plans" to apply further trade pressure on the US, saying he'll "take note" of fresh insults from Trump and trade adviser Peter Navarro. Navarro, addressing Canadian lobbyists, told them to "get the hell out of our country." Carney's response was to say he'll "never rule anything out," but that nothing new is coming right now. That timing matters. US midterm elections are weeks away, and holding fire until after Americans vote is a strategic bet, not a ceasefire.

At the same time, Carney is done playing nice in public. CNN reported that at a Liberal Party event in Ottawa, Carney mocked Trump's signature hand gestures while describing a clean energy deal as the "functional equivalent of 18 Hoover Dams," drawing laughter from the room. Fen Hampson of Carleton University's Expert Group on Canada-US Relations told CNN that Carney, a former central banker, is "developing a bit of a taste for the political punchline" and "swapping his central banker caution for increasingly subtle but pointed shots at Trump."

The EU Pivot Has a Ratification Problem

Carney's bigger play is Europe. Speaking to the European Parliament in Strasbourg, he called for Canada and the EU to form an alliance that could serve as "a beacon for other democracies," according to the Irish Times. European Commission President Ursula von der Leyen has floated offering Canada "associate member" status, Breitbart reported.

There's a problem with that pitch that the Irish Times flagged directly. CETA, the EU-Canada trade deal signed a decade ago, still isn't fully ratified. An "associate member" arrangement with a bloc that can't finish ratifying its last trade deal with Canada is, at minimum, aspirational.

There's a second problem the CBC laid out in detail. Carney is framing this alliance around shared democratic values, but Europe's own far right is surging in the two countries Canada needs most. Germany's AfD, classified by German intelligence as extremist, made major gains in regional elections this month while Chancellor Friedrich Merz polls at record lows. An AfD lawmaker actually heckled Carney with a "U.S.A.!" chant during his Strasbourg speech. In France, Marine Le Pen's National Rally quadrupled its seats in the Senate. Achim Hurrelmann of Carleton University's Centre for European Studies told CBC that "Trump is seen positively by not all, but many far-right politicians in Europe," meaning the values Carney says Canada shares with Europe may not hold as firmly in a few years.

The Economics Still Favor Washington

Carney himself has acknowledged Canada's exposure. He's noted that 60% of Canadian-made auto parts and 90% of finished vehicles go to the US, with components crossing the border up to eight times before reaching a showroom, according to the Irish Times. The US takes two-thirds of all Canadian exports. That's the constraint on how hard Carney can actually push back, no matter how many jokes he cracks about Trump's hand gestures.

The tariffs are already landing on workers. CTV News reported Stelco is laying off hundreds of employees at its Hamilton, Ontario plant, with Carney calling the move a "betrayal." An 18-month conciliatory strategy produced tariffs, job losses and a trade war anyway, so a tougher public posture and a search for other partners is a rational response to a deal that isn't working.

Separately, Canada has reopened military talks with China through the Defense Coordination Dialogue channel for the first time since April 2018, the South China Morning Post reported, per Breitbart. That sits awkwardly next to Carney's "beacon for democracy" framing for the EU alliance, though no source suggests the two tracks are formally connected.

Treasury Secretary Scott Bessent told a Breitbart event that Carney "needs to stop campaigning and start governing," arguing Carney rose to power on an anti-Trump platform that hasn't delivered results. Carney's government, for its part, points to its new Defence Industrial Strategy and Arctic sovereignty plans as evidence it's building alternatives to US dependence, according to the Prime Minister's official site.

What happens after the US midterms, and whether Carney actually follows through on the retaliation he says he's not ruling out, remains the open question neither government has answered.