Editorial Board of the Financial Times
Canadian Prime Minister Mark Carney is emerging as a leader of the economic resistance to US President Donald Trump‘s efforts to deglobalize, mostly because few people dare to speak out.
The Canadian Prime Minister has turned to China as a counterweight, and, in a rousing speech to the Davos elite, called on the middle powers to come together, but this is a risky strategy in two respects:
First, Carney exposes Canada to retaliation from the United States, on which his country relies heavily, as the United States accounted for 73% of Canada’s exports during the first ten months of 2025.
According to official data, compared to only 11% in the opposite direction, the proposed trade partnership with China sparks a threat from the White House to impose 100% tariffs on all goods exported to the United States.
Second, there is another risk that Carney, in his desperate pursuit of alternative alliances, may cut deals that do not work. Reduced tariffs on about $4 billion of canola oil should satisfy Saskatchewan farmers.
But cutting duties on 49,000 Chinese electric vehicles is bad news for Ontario auto assemblers, and China has a habit of restricting imports of Canadian canola oil when relations sour.
Facilitating the entry of advanced, high-value industrial products such as electric cars in exchange for selling more seed oil seems like a weak deal. Will Carney’s rejection of the “America First” policy lead to putting “Canada Third”?
Not necessarily. Although Canadian imports are relatively smaller in volume to the United States, they are so important that they cannot be dispensed with, especially for American automakers and oil refineries.
It would not be foolish to show Canada’s options in confronting Trump, before the US-Mexico-Canada Continental Free Trade Agreement is renegotiated later this year.
Also, the “daring” Canadian Prime Minister enjoys support from the markets. In addition to the rise in the value of the Canadian dollar against its American counterpart during Trump’s second term, the Toronto Stock Exchange Composite Index (TSX Composite) recorded a new record high on Monday, and despite the tensions between the two countries, the index rose by 30% within a year, that is, nearly double the performance of the S&P 500 Index.
The main reason for this is that about half of the Canadian stock market is represented by the natural resources sector – where prices reflect global trends.
The United States also needs it in large quantities – and the finance sector, which is not subject to tariffs. These sectors represent only 15% of the US stock market, which is dominated by the technology sector, according to Morning Star data.
The reality of things is that the more Trump gets angry, the better the performance of some Canadian stocks, and more than 15% of the index is controlled by gold mining companies. The yellow metal, whose price rose as investors resorted to risk aversion, accounted for more than a third of the growth of the Toronto Stock Exchange index over the past year, according to data from the London Stock Exchange Group.
The matter is not limited to investors only, as Zijin Gold, a company listed on the Hong Kong Stock Exchange, has offered a 27% premium to Allied Gold, a listed Canadian company that owns gold mines in Africa, but it is necessary to have a careful balance.
China, which a public inquiry concluded tried to interfere in Canadian elections more than once, is a fickle ally, and Trump is also fickle, and perhaps Carney’s hope is that public verbal exchanges and enthusiastic camaraderie will coexist, in reality as well as in fiction.
