Six months into his tenure as Canada’s Prime Minister, Mark Carney finds himself at the center of a political and economic storm, wrestling with a sluggish economy and fraught relations with the country’s two largest trading partners—the United States and China. Carney, a former banker who campaigned on his ability to negotiate with the U.S. and steer Canada through choppy economic waters, has encountered obstacles that have tested both his government’s resolve and the patience of the Canadian public.
Carney’s election in April 2025 was seen by many as a referendum on how Canada should respond to the aggressive trade tactics of U.S. President Donald Trump. Trump’s threats of tariffs and annexation loomed large over the campaign, and Carney promised to forge a new economic relationship with the United States. Yet, as of late September, that new relationship remains elusive. According to Reuters, Carney’s administration has made significant concessions to the U.S., including the removal of many retaliatory tariffs and a noticeable softening of the patriotic rhetoric that once unified Canadians against their southern neighbor.
These moves, while designed to ease tensions, have left Canada with little leverage. The U.S. remains the destination for nearly three-quarters of Canadian exports, and tariffs have hit hard at key sectors such as steel, aluminum, and autos. Although Canada has managed to dodge a technical recession so far, analysts warn that the economic malaise could deepen in the coming months. “Carney cannot realistically control the pace of any discussions with Donald Trump,” said Nik Nanos, chief data scientist at Nanos Research, in a comment to Reuters. The latest Nanos poll shows 50.7% of Canadians favor Carney’s leadership, compared to 28.6% for Conservative leader Pierre Poilievre.
Carney himself acknowledged last week that talks with the U.S. are likely to be delayed, with substantive discussions moving to a future review of the trade agreement between the U.S., Canada, and Mexico (USMCA). His office declined to provide further comment, leaving many Canadians wondering how and when progress might be made.
Meanwhile, Carney’s government is also embroiled in a trade war with China, Canada’s second-largest trading partner. The dispute escalated in August when China imposed import duties on Canadian canola, a direct response to Canadian tariffs on Chinese electric vehicles enacted the previous year. The tit-for-tat measures have further strained relations, and the stakes are high. Canada’s Trade Minister, Maninder Sidhu, is set to travel to China in November in a bid to defuse tensions and restore some measure of normalcy to the trading relationship.
Yet the diplomatic balancing act is fraught with peril. “Canada is living in the land of bad options,” said Michael Kovrig, a geopolitical adviser and former Canadian diplomat, in an interview with Reuters. He cautioned that capitulating to China to offset the damage inflicted by the U.S. could be dangerous. The situation is further complicated by Canadian officials’ conclusion last year that China interfered in at least two federal elections—a finding that continues to cast a shadow over bilateral relations.
As these international dramas play out, Carney faces growing discontent at home. Earlier in September, several thousand protesters gathered in cities across Canada to voice their opposition to his government’s policies on Indigenous rights, climate change, and migration. Environmentalists and migrant advocates, in particular, have expressed frustration with Carney’s approach. “We’ve got a Prime Minister who I know knows very well about climate change and the threat, but he’s still supporting pipelines and LNG,” said prominent environmentalist David Suzuki, as reported by Reuters.
Carney, who previously served as a U.N. special envoy on climate and finance, has thrown his support behind increasing Canada’s energy production, including the export of oil and liquefied natural gas (LNG) to new markets. He argues that Canada “needed the rupture” with the U.S. and can thrive despite the rift. “We have what the world wants,” he said last week, referencing Canada’s vast natural resources and its expertise in artificial intelligence. But his policies have angered progressive factions within his own Liberal Party, who see a contradiction between his climate credentials and his support for fossil fuel expansion.
The economic challenges Carney faces are not merely theoretical. The latest polls indicate that rising unemployment and economic uncertainty have overtaken U.S. relations as Canadians’ primary concern. The Nanos poll, cited by The Straits Times, underscores the shifting priorities of the electorate, with more Canadians now focused on bread-and-butter issues than on the country’s international standing.
Jeremy Paltiel, a political science professor at Carleton University, summed up the predicament succinctly: “Canada does not have a lot of leverage with Trump or China and so we have to use state investment to substitute for foreign investment,” he told Reuters. “We’ve got to figure out how to keep up investment and prepare for whatever might be coming next.”
Carney’s minority government has managed to pass one key piece of promised legislation, but that achievement has been overshadowed by growing divisions within his party and among the public. Migrant advocates and environmentalists, once part of the Liberal base, are now among the most vocal critics of his government’s approach. The protests earlier this month were a vivid reminder of the political risks Carney faces as he attempts to chart a course through turbulent waters.
Despite these challenges, Carney’s approval rating remains relatively robust, with nearly six in ten Canadians expressing support for his leadership. Still, there are signs of slippage. Some polls suggest that his popularity has declined in recent months, a trend that could accelerate if economic conditions worsen or if progress on trade relations remains stalled.
Looking ahead, Carney’s ability to navigate these complex challenges will be closely watched—not just in Canada, but around the world. As a former banker and international envoy, he was widely seen as a test case for how global leaders might stand up to the U.S. president’s trade demands. Now, with the economy in a delicate state and political pressures mounting on multiple fronts, Carney’s next moves could define his legacy and shape Canada’s future for years to come.
For now, Carney’s government is focused on damage control—seeking to stabilize relations with the U.S. and China, address domestic discontent, and keep the Canadian economy on track. Whether that will be enough to satisfy an anxious electorate remains to be seen, but one thing is clear: the challenges facing Canada’s Prime Minister are as daunting as any in recent memory.
