LILLEY: What will Carney's elbows do as Trump threatens more tariffs?

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Knowing when to put your elbows up and when to put them down isn’t something you learn in business school. It seems Prime Minister Mark Carney could have used a few more lessons from the streets rather than the case studies at Harvard or Oxford.

Donald Trump is being a bully to Canada once again and Carney doesn’t know if his elbows should be up or down. Based on past performance, where they’ve been up and down like a chicken trying to fruitlessly take off, I’m not feeling confident that he’ll have the right response.

On Thursday evening, Trump released a letter he sent to Carney via his Truth Social platform. In the letter, Trump said that he’s willing to work with Canada even though Canada retaliated against the tariffs he imposed over fentanyl which he says is still flowing across the border.

“Instead of working with the United States, Canada retaliated with its own Tariffs,” Trump said.

Look, having examined the evidence, Canada is the not the major supplier of fentanyl that Mexico is, but our hands aren’t clean. The superlabs and the mailing of fentanyl are real issues as is the money laundering that happens in Canada for the international crime syndicates running these operations.

The truth is somewhere between Trump’s claim that we are a huge problem and the Liberal government’s previous denial that we are even part of the problem. Carney though has said that he understands the issue; he’s committed to working on it and is taking it seriously.

Apparently, that means nothing to Trump.

“Starting August 1, 2025, we will charge Canada a Tariff of 35% on Canadian products sent into the United States, separate from all Sectoral Tariffs,” Trump said in a post that went live shortly after 8 p.m. ET.

“If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment to this letter.”

Well, we have worked with him, and we are only getting more tariffs.

These 35% tariffs are on top of the sectoral tariffs on products like aluminum and steel, and they are separate from the threatened 50% tariffs on copper that Trump announced earlier this week. This is an extension of the chaos that Trump has unleashed since being elected.

He made it clear though that his job, as he sees it, is to fundamentally alter the global trading system in favour of the United States. In his view, the current system favours other countries doing business with the U.S. and that system has harmed American workers and American companies.

“I will immediately begin the overhaul of our trade system to protect American workers and families,” Trump said on inauguration day.

There is no doubt that this process is underway, for better or for worse.

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For all the bravado Canadians are showing we are in a weaker position. Close to 20% of our economy is dependent on trade with the Americans while less than 2% of their much larger economy is dependent on trade with us.

Sure, there are tourist hotspots in Maine, Florida, Nevada, Arizona and California feeling the pinch as Canadians stay home. In the trade of goods and services though, the Americans simply won’t feel the impact of this trade war in the same way we will.

That is unless we take the nuclear option, which few would be willing to do, and cut off all electricity, auto, oil and gas exports. Since that isn’t going to happen and would be seen as a hostile act worthy of deeper retaliation by the Americans, we need a different plan.

A few weeks ago, we seemed close to a high-level deal similar to what the United Kingdom struck with Trump. It’s a short agreement with major details to be worked out later that many have criticized as being insufficient.

But I’ll note that we haven’t seen the same kind of letter sent to British PM Keir Starmer as was just sent to Mark Carney. In fact, Starmer has been invited to visit Trump in Scotland when he travels there in the coming weeks.

Carney’s mistake in scuppering this proposed deal with the Americans was putting Ambassador Kristen Hillman in charge. When you want to secure a deal in business, you send in your best salesperson, your closer, not the accounting team.

We need a political deal with Trump, not a comprehensive deal. We just need him to take his aim and focus off of Canada. What Carney has been doing so far, clearly hasn’t worked.