Canadian Prime Minister Mark Carney has called close economic ties with the United States a ‘weakness’ amid rising U.S. tariffs, signaling a shift in Canada’s trade strategy. In a video statement, Carney said the U.S. has ‘fundamentally changed its approach to trade, raising its tariffs to levels last seen during the Great Depression.’ According to Al Jazeera, Carney emphasized that ‘many of our former strengths, based on our close ties to America, have become weaknesses that we must correct.’

US Tariffs and Their Economic Impact

According to upi.com, U.S. President Donald Trump’s trade policies have disrupted decades of cross-border cooperation, with steep tariffs on Canadian goods. A 10% tariff was imposed on all goods not excluded under the Canada-US-Mexico free trade agreement, CUSMA. Additionally, a 50% tariff was placed on Canadian products made of steel, aluminum, or copper, and a 25% tariff on products ‘largely’ made of those metals. Many types of Canadian heavy equipment now face a 15% tariff upon entry into the U.S. Ottawa has described the impact as ‘profound,’ noting that these measures have displaced workers, disrupted supply chains, and caused uncertainty that is curbing investment.

Canada’s Strategic Shift Toward Diversification

According to the Winnipeg Free Press, Carney has pledged to regularly update Canadians on efforts to diversify away from the U.S. ‘I promise you, I will never sugar-coat our challenges,’ he said in a video statement. ‘I will talk with you directly and regularly about our plan — why we’re doing what we’re doing, what’s working, what isn’t.’ Carney has also doubled down on moves to deepen economic and defense ties with allies other than the U.S., reflecting a broader strategy to reduce dependence on a single trading partner.

China and Canada’s Growing Ties

Li called for both sides to ‘steadily steer their ties onto a track of healthy, stable and sustainable development,’ according to Xinhua. According to People’s Daily Online, Chinese Premier Li Qiang met with Canadian Prime Minister Mark Carney in New York, signaling a potential improvement in bilateral relations. Analysts believe the meeting suggests that China-Canada ties are seeing positive signals, especially as Carney seeks to ease tensions with China that flared under his predecessor, Justin Trudeau. This move aligns with Canada’s broader effort to diversify its economic relationships in response to U.S. protectionism.

Carney’s government has also secured a parliamentary majority in special elections earlier this month, giving him more room to maneuver on key economic issues such as U.S. trade relations. A review of the free trade pact between the U.S., Canada, and Mexico is scheduled for July, according to Al Jazeera. Carney became prime minister in 2025 after a campaign in which he promised to take a firm stance toward what many Canadians have perceived as unwarranted hostility from the U.S.

While tensions have eased between Trump and Carney, and some tariffs have been rolled back, the Canadian leader has sought closer economic ties with countries such as China to reduce Canada’s dependence on the U.S. ‘We have to take care of ourselves because we can’t rely on one foreign partner,’ Carney said on Sunday. ‘We can’t control the disruption coming from our neighbours.’

In a symbolic gesture, Carney held up a toy soldier depicting General Isaac Brock, a British military commander who fought against U.S. forces during the War of 1812 invasion of what is today Canada. ‘The situation today feels unique, but we’ve faced down threats like this before,’ Carney said, according to Al Jazeera.

According to 양자신문, Carney has also announced plans to build a ‘Sovereign Cloud’ to strengthen Canada’s digital sovereignty. In a speech in Edmonton, he emphasized that ‘independent control over advanced computing capabilities is key to protecting Canada’s competitiveness, security, and sovereignty.’ This initiative is part of a broader strategy to ensure Canada remains a leader in quantum technology and AI, areas where the country seeks to maintain its edge.

The Sovereign Cloud project is being led by the new Major Projects Office (MPO), which was established in Calgary last August. Initially focused on natural gas export terminals and nuclear development, the MPO has now expanded its scope to include digital infrastructure, critical minerals, high-speed rail, and carbon capture. While the Sovereign Cloud is not yet an official MPO project, it is considered a ‘prerequisite’ for securing Canada’s future competitiveness in emerging technologies.

Carney’s government has acknowledged that the path ahead will require balancing domestic economic strength with international cooperation. ‘We cannot rely on our most important trade relationship as we once did,’ he said. ‘We must build our strength at home.’