When Carney meets Trump: Here’s what to expect from Tuesday’s high stakes White House encounter
Prime Minister Mark Carney will meet with U.S. President Donald Trump in Washington Tuesday for the first time since winning the April 28 federal election. Both leaders have indicated that trade and security will be the key issues on the agenda, with Trump declaring that he also intends to raise the potential annexation of Canada, one of his favourite talking points. So how should Carney approach his first big test on the international stage and how should Canadians expect it to play out? The Financial Post’s Barbara Shecter spoke to trade experts and officials who have been in the room with Trump and Carney to get a sense of what might play out.
‘What version of Donald Trump will show up?’
What is it like to be in the room with Donald Trump? That’s something Brian Clow got to see first-hand while working in the PMO under Justin Trudeau from 2017 until March of this year, most recently as deputy chief of staff.
Clow said the Tuesday meeting presents an opportunity to reset the relationship with U.S. president, but a key factor will be “what version of Donald Trump will show up.”
“Often he is relaxed, charming, even funny — which usually means the meeting will go well,” Clow said. “Other times he’ll get very serious and direct, and he won’t hesitate to bluntly reject an assertion. It’s rare, but he can also get quite angry if he feels talked down to or believes the U.S. is being taken advantage of. Some of that is his art-of-the-deal negotiating style but a lot of it is genuine too.”
Clow described meetings with Trump as varyingly intense, wide-ranging and prone to going in unexpected directions.
“One minute you’ll be talking about an actual war and the next he’ll tell a story from the ’80s about Studio 54,” he said.
“You’ve got to be on your toes and go in with a clear plan and a small number of key points. And you’ve got to be prepared to steer the conversation back to the issues you want to be talking about. This President doesn’t just sit there and allow someone to go on at length to build a case or make long arguments — you need to be succinct, clear, and simple. He interjects a lot.”
Clow said Canada’s team will almost certainly come armed with a proposal of some kind, perhaps involving national security and defence issues, critical minerals , or energy — with the intent of securing a quick end to tariffs.
“There can’t be further cooperation with the U.S. on anything if the tariffs aren’t removed. So tariff removal will be a key Canadian demand in the discussions,” he said.
‘Changing the conversation from one of aggression to opportunity’
Gord Nixon, who as Royal Bank of Canada ’s CEO worked directly with Carney to navigate liquidity issues and other shocks during the great financial crisis in 2008, said he expects to see Carney’s steady hand, respectful and pragmatic approach, and knowledge of financial markets and the global economy to come to the fore as he meets with Trump.
“In my view, the prime minister should focus on changing the conversation from one of aggression to opportunity while acknowledging we need to do more in terms of defence and military spending. Establishing a respectful and non-combative relationship will be important in the long run,” Nixon said.
This is necessary for both countries, he said, because the trading relationship between Canada and the U.S. is binary — either a win/win or a lose/lose.
“The United States will pay a heavy price if they sell less to Canada and have diminished access to our resources and critical imports like potash, uranium, aluminum and lumber,” he said.
Nixon said Carney’s approach to managing difficult issues was a key benefit for Canada during the financial crisis and should serve the country well in managing the challenging U.S. relationship and transforming Canada’s economy and trading relationships.
“Notwithstanding our relative strength, we faced a number of existential crises that could have brought our financial markets to their knees and Mark was critical to solving our issues,” Nixon said.
Though former prime minister Stephen Harper credited then finance minister Jim Flaherty for navigating Canada through the 2008 crisis during the campaign, Nixon suggested Carney played a vital role, at least as far as the banks were concerned.
“Jim Flaherty may have owned the bus but Mark was driving it and his understanding of financial markets and the levers that need to be pulled was a significant differentiator for Canada,” Nixon said.
He described sitting in rooms with players with many different perspectives — from bankers and regulators to economic policymakers — “a lot of A type personalities,” as he put it. Carney was chair.
“I never saw him get mad and he was very effective at managing what were at times divergent opinions,” Nixon recalled, adding that Carney was able to listen and move the conversation forward towards decisions he believed were in Canada’s best interest.
On Tuesday, Carney’s challenge will be to manage Trump’s rhetoric despite possessing much greater knowledge base on the U.S.-Canada relationship, Nixon said. And he will have to establish a positive working relationship not just with Trump but with his team.
‘Mutual de-escalation’
Playing your cards tight is key in any negotiation and Canadian officials will not want to be quick to offer up concessions to Trump in the early stages of talks, said William Pellerin, a partner in the international trade group at McMillan LLP.
Rather, Carney and his team are likely to go in with the hope of defusing the trade war through “mutual de-escalation.”
The aim of taking down the temperature would be to get rid of the new wave of tariffs imposed by Trump, including 25 per cent tariffs on steel, aluminum and other products — as well as those still threatened by the United States.
“There would be (a) major downside in offering concessions to resolve the existing steel and aluminum or auto tariffs, only to have new tariffs imposed on lumber, critical minerals or other products right after those concessions are made,” he said.
“Canada could (instead) offer certain concessions as part of a broad-based renegotiation of the CUSMA.”
These could include giving up ground on Canada’s digital services tax or defence and NATO spending.
“Concessions could also be offered in respect of dairy access, though Canada has stated that this would be off the table,” Pellerin said.
‘We don’t have to do a deal in the short term’
Carney himself has provided a number of direct clues as to how he plans to approach the talks with Trump.
At a news conference Friday, his first following the election, he said Tuesday’s conversation was bound to be “difficult,” but that he also expects it to be constructive.
Since March, Carney has made it clear that he would plan to negotiate but also to attempt to reduce its reliance on the United States and has laid out plans to improve Canada’s position by reducing internal trade barriers and pivoting trade relationships to other continents.
His message has been consistent, calling Trump’s tariffs unjust and acknowledging that the old relationship between the two countries based on trust and mutual benefit has been broken.
“We don’t have to do a deal in the short term,” he told reporters on April 24 during a stop in British Columbia. “My government will do the right deal.”
• Email: bshecter@postmedia.com
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