Prime Minister Mark Carney speaks at the ASEAN Business and Investment Summit in Kuala Lumpur, Malaysia, on Sunday. The Prime Minister is meeting with Asian leaders at the summit as he aims boost Canada’s trade relationships.Adrian Wyld/The Canadian Press
Prime Minister Mark Carney said he stands ready to resume trade negotiations with the U.S. and tried to reassure Canadians that he is taking steps to shore up the country’s economy after U.S. President Donald Trump threatened to hike tariffs by another 10 per cent.
Mr. Trump said this weekend he’s hiking tariffs on Canadian imports after an Ontario government TV ad critical of his protectionist levies ran during the first game of the World Series.
Mr. Carney, who is in Malaysia meeting with member countries of the Association of Southeast Asian Nations, said his government plans massive investments in Canada’s economy and intends to shift as much trade as possible away from the United States, which has become a more unpredictable and unreliable partner since Mr. Trump took office in January.
“You’ll be seeing within the course of the next two weeks an ambitious budget which makes generational investments in Canada,” Mr. Carney told reporters.
“And we are in the process of diversifying our trade relationships – the focus of our meetings here in Asia,” the Prime Minister said. “We have an intention to more than double our exports away from the United States over the course of the next decade.”
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Mr. Trump, who has imposed a slew of tariffs on Canadian goods since March, had already ratcheted up tensions this past Thursday by breaking off negotiations aimed at resolving the trade war in response to the TV ad.
The 60-second TV spot uses footage from nearly 40 years ago of former U.S. president Ronald Reagan decrying American protectionism, saying such trade barriers hurt every American worker and consumer.
Mr. Trump, who has said the Ontario ad misrepresents Mr. Reagan’s comments, said he was raising tariffs by 10 per cent because Canada did not immediately stop running the ad as he wanted.
“Their Advertisement was to be taken down, IMMEDIATELY, but they let it run last night during the World Series, knowing that it was a FRAUD,” the U.S. President said in a post on his Truth Social platform as he flew to Malaysia on Air Force One.
From left: Malaysia’s Prime Minister Anwar Ibrahim, Indonesian President Prabowo Subianto and Canadian Prime Minister Mark Carney at the opening of the 47th ASEAN summit in Kuala Lumpur.Vincent Thian/The Associated Press
Carney meeting with Asian leaders at summit
Both Mr. Carney and Mr. Trump were in Kuala Lumpur over the weekend to attend the ASEAN summit.
Speaking at the summit on Sunday, Mr. Carney, in an apparent reference to Mr. Trump, talked of the need for dependable allies in turbulent times.
“It makes ASEAN more important than ever. It underscores the importance of reliable partners who honour their commitments, who are there in tough times and when things are not working, work collaboratively to fix them.”
Carney pitches Asia on Canada as energy superpower
He told reporters he’d agreed with Malaysian Prime Minister Anwar Ibrahim, the current chair of ASEAN, as well as next year’s chair, Philippines President Ferdinand R. Marcos Jr., that Canada would conclude a free-trade deal with ASEAN member countries by next year.
Separately, Mr. Carney said he’d agreed with the Philippines to accelerate negotiations on a free-trade deal that would also conclude next year.
“Building at home, diversifying our trade relationships abroad, and being ready to work with the United States government as, and when, the time comes .”
What was the Ontario ad that angered Trump?
After Mr. Trump said he would terminate trade talks, Ontario Premier Doug Ford, whose government paid for the ad campaign, said he would pull the ad after this weekend.
The ad is much shorter than Mr. Reagan’s original address. It is edited, with certain passages presented out of order.
In Mr. Reagan’s original speech, the late president defended imposing duties on Japan during a trade dispute over semiconductors. He alleged Japan was failing to enforce Japanese companies’ violations of a trade agreement with the United States.
Watch the Government of Ontario’s anti-tariff advertisement
But Mr. Reagan explained why tariffs are bad for the U.S. and hurt free trade, which is largely what the Ontario government quoted in its ad.
However, Mr. Reagan also argued that his duties on Japan were justified “to stop unfair practices against American products,” while extolling the virtues of free trade overall.
What tariffs has Trump placed on Canada already?
The United States under Mr. Trump has imposed 35-per-cent tariffs on trade not covered by the United-States-Canada Agreement (USMCA).
He has also imposed a number of sectoral tariffs that affect Canadian industry disproportionately, including a 50-per-cent levy on steel and aluminum and a 25-per-cent levy on automobiles.
Softwood lumber, too, has been hit hard. Canadian producers are facing levies totalling more than 45 per cent after the administration recently announced a new 10-per-cent tariff on lumber shipments into the U.S. on top of existing duties.
Last month, Mr. Trump set a date of Nov. 1 for imposing a 25-per-cent tariff on medium- and heavy-duty trucks, a measure previously announced along with tariffs on pharmaceuticals and furniture.
The Globe and Mail last week reported that Mr. Carney and Mr. Ford spoke to each other Thursday night and on Friday. The Prime Minister expressed his preference that the ad be pulled off the air.
Trump has broken off trade talks before
This is at least the second time Mr. Trump has paused trade talks with Canada.
In June, after Ottawa proceeded to enact a digital sales tax that would hit U.S. tech giants, the U.S. President broke off negotiations. He resumed them after Mr. Carney scrapped the tax.
Analysis: Trump’s bizarre outrage over Ontario’s anti-tariff ad is a symbol of his presidency
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association in Canada, called the new 10-per-cent tariff the “latest in a series of unprovoked and unwarranted escalations in tariff policy with other sovereign nations.”
He said this will mean higher prices for U.S. consumers.
“Lost in the accountability loop here is the President’s threat is really to charge American taxpayers billions of dollars because of a benign World Series ad he doesn’t like.”
Former Alberta premier Jason Kenney, who also served in Stephen Harper’s federal government, called Mr. Trump’s reaction to the TV ad embarrassing.
“The Ontario ad does not misrepresent President Reagan’s anti-tariff radio address in any respect whatsoever. It is a direct replay of his radio address, formatted for a one minute ad,” Mr. Kenney said on X.
Mr. Carney underlined the fact that it’s the Canadian government and nobody else, that conducts negotiations with the United States, an apparent reference to the fact the Ontario government, not Ottawa, produced the ad.
“The Government of Canada stands ready to build on the progress that we had been making in our negotiations, our discussions with our American counterparts, and we have a consistent focus in those discussions on doing the best deal for Canadian workers and their families,” he said.
“It is the sole responsibility of the government of Canada to have those discussions with the United States, and it’s the best way forward.”
Business Council of Canada president Goldy Hyder said Canada can’t have premiers freelancing on the Canada-U.S. relationship.
“To have every sector, every province, every premier kind of weighing in on this. I don’t see that behaviour in the United States,” Mr. Hyder said. “I don’t see governor after governor on television,” he said. “You don’t see that in Mexico.”
He acknowledged the Americans want to end the assembly of cars in Canada for the U.S. market, but said Canada has leverage.
“We have cards to play – as the President likes to say – we have oil, we have gas, we have uranium, we have potash, we have critical minerals, and we need to play to our strengths and leverage those in a negotiation.”
With reports from Laura Stone