On Tuesday, October 7, 2025, Canadian Prime Minister Mark Carney made his way to the White House for a high-stakes meeting with U.S. President Donald Trump, as relations between the two North American neighbors reached a historic low. The Oval Office encounter, which was Carney’s second since taking office in March, unfolded against a backdrop of trade wars, pipeline politics, and a swirl of cultural tensions that have left the once-sturdy alliance between Canada and the United States looking battered and bruised.
The timing of Carney’s visit was anything but casual. With a critical review of the US-Mexico-Canada Agreement (USMCA) looming in 2026—a pact that underpins more than 77% of Canada’s exports—both sides had much at stake. According to AP, Carney’s top priority was to seek relief from a raft of U.S. tariffs that have hammered Canadian industries, especially the steel and aluminum sectors. Trump, for his part, made no secret of his hardline stance. “I guess he’s going to ask about tariffs, because a lot of companies from Canada are moving into the United States,” the president remarked to reporters after signing an executive order related to Alaska. “He’s losing a lot of companies in Canada.”
The numbers tell a stark story: the U.S. has slapped a 50% tariff on Canadian steel and aluminum, a move that many in Canada see as punitive and economically damaging. As Frank McKenna, former Canadian ambassador to the U.S., told AP, “There is an outright rebellion.” He described how ordinary Canadians are changing vacation plans and business leaders are rerouting executive trips away from the U.S. “Canadians aren't being instructed what to do; they are simply voting with their feet.”
Carney’s approach has been pragmatic, emphasizing that the USMCA remains an advantage for Canada, as over 85% of Canada-U.S. trade continues to be free of tariffs. “The U.S. average tariff rate on Canadian goods is 5.6% and remains the lowest among all its trading partners,” Carney pointed out, according to AP. Still, sector-specific tariffs—known as Section 232 tariffs—are biting, and expectations for immediate relief were low. McKenna speculated that some progress could be made, perhaps reducing steel and aluminum tariffs from 50% to 25% or establishing tariff-free quotas at last year’s levels.
But trade wasn’t the only issue on the table. In a twist that could only happen in the season of Halloween, as Calgary Herald columnist Chris Varcoe quipped, the long-dead Keystone XL pipeline project reemerged as a topic of discussion. More than four years after President Joe Biden revoked its permits, Carney expressed “renewed national interest in the pipeline from the Canadian side,” according to a report from CBC. The topic wasn’t raised as a standalone issue but was linked to broader energy cooperation and, crucially, to progress on tariffs.
The pipeline, first proposed in 2008, would have moved 830,000 barrels of oil per day from Alberta to the U.S. Gulf Coast. Its on-again, off-again history is a saga in itself: rejected by President Obama, revived by Trump, and then quashed by Biden on his first day in office. Alberta’s government lost an estimated $1.3 billion on its ill-fated investment, a bitter pill for many in the province. “Keystone XL has become some weird meta-meme in the place of actual progress in Canada’s oil industry. Never built, but never fully dead, always there when someone needs it,” wrote energy economist Rory Johnston on X.
Despite the political theater, the underlying reality is that the U.S. remains Canada’s largest energy customer—importing more than four million barrels of Canadian crude oil per day in July 2025, and accounting for over 90% of all Canadian oil exports. Even with the opening of the Trans Mountain pipeline to Asia, the U.S. is still Canada’s dominant market. “Canada is still an irreplaceable partner on the oil side,” said Robert Johnston, director of energy and natural resources policy at the University of Calgary’s School of Public Policy.
Yet, the notion that reviving Keystone XL is somehow easier than building a pipeline to Canada’s own West Coast is a damning reflection on Canadian politics. As Heather Exner-Pirot of the Macdonald-Laurier Institute told Calgary Herald, “The truth is, Keystone is now looking like the easier lift. That’s an indictment of Canadian politics, process and purpose.” British Columbia Premier David Eby’s opposition to a new Alberta-to-Prince Rupert pipeline has left Alberta Premier Danielle Smith seeking federal support for pipelines in all directions. “The American president has been quite interested in seeing a reboot on Keystone (XL)... That would be good for us, and it would also be good for the United States,” Smith said.
But the path forward for Keystone XL remains fraught. Ben Cahill, an energy analyst at the University of Texas at Austin, noted that the pipeline has been “turned into a symbol by a lot of people,” making its revival a tall order. “A huge question is: Can you count on long-term U.S. support for a cross-border pipeline?” Cahill asked. For now, the company that operates the existing Keystone line, South Bow, has shown no public interest in resurrecting KXL, though it supports increasing oil transport in general.
Against this backdrop of high-stakes trade and energy negotiations, the meeting took a jarring turn when President Trump veered into culture war territory. According to PinkNews, Trump used the occasion to mock transgender people and tout his administration’s anti-trans policies, stating, “We have no men in women’s sports. We’re not going to take your child away and change the sex of your child.” Carney, a vocal supporter of LGBTQ+ rights, sat in silence as Trump railed against Democrats and “woke cr*p.” Earlier this year, Carney had affirmed, “One of the great strengths of this country is recognising that people can be who they are, they can love who they love, they can live where they are, and it’s fundamentally important that the federal government is the defender of those rights, defender of the Charter of Rights and Freedoms.”
The cultural clash underscored the growing gulf between the two leaders—and, by extension, their countries. Trump’s trade war has included a 25% tariff on all Canadian products since February 2025, with plans to raise it to 35% in August. He’s also imposed sector-specific tariffs—50% on metals and 25% on automobiles—and even floated the idea of making Canada the 51st U.S. state. In a December 2024 dinner, Trump reportedly offered then-Prime Minister Justin Trudeau a job as “governor” if Canada agreed to join the U.S., saying, “Without this massive subsidy, Canada ceases to exist as a viable Country. Harsh but true!”
Despite the bitterness, the economic ties between the two nations remain vast and intricate. About $2.5 billion worth of goods and services cross the border daily, and Canada supplies 60% of U.S. crude oil imports and 85% of its electricity imports. The two countries also cooperate closely on defense, law enforcement, and border security.
As the dust settles on Carney’s visit, the path forward is anything but clear. With the USMCA review on the horizon, the ghost of Keystone XL haunting the energy debate, and cultural rifts widening, both sides face tough choices. But if history is any guide, the ties that bind Canada and the U.S.—however strained—are not easily broken.
