Canada PM Carney Vows to Backstop Economy as U.S. Trade Row Escalates — Update

By Paul Vieira

OTTAWA--Canadian Prime Minister Mark Carney said his government will "do whatever it takes" to backstop regions and industrial sectors targeted by U.S. tariffs as the trade conflict between the neighboring and closely-integrated economies enters a precarious stage.

In an address posted on YouTube, Carney said retaliatory tariffs on about $20 billion in U.S. goods that kicked in on Tuesday were necessary to protect domestic sectors and workers. "I don't believe in escalating the conflict," said Carney. "The harsh reality is that the American tariffs will hurt some Canadians or others, and that was by design."

As a result, "we will do whatever it takes for as long as it takes to bridge those people" in affected sectors "to a better future," he said. Carney added that his Liberal government would in the meantime pursue policies that reduce dependence on trade with the U.S. to power growth, although warning this would present economic turbulence.

Canada's new tariffs of between 15% and 50% are in response to 50% duties that the Trump administration imposed last month following the surprise collapse of trade talks between U.S. and Canadian officials. In mid-August, the two sides were confident that a pact that would provide sizable tariff relief was near conclusion. But those talks broke off, with both sides alleging their counterparty demanded last-minute changes that would make a deal untenable.

In his video address, Carney said a "fair deal wasn't on the table," adding some elements would, over the long haul, lead to the demise of key domestic sectors such as automobiles, steel and forest products. "We made the right choice to walk away from a bad [deal]," the Canadian leader said.

The White House has said Canada was offered the most generous agreement among all key U.S. trading partners.

In the aftermath, President Trump and administration officials have cranked up warnings about Canada's future, and ordered that one of the Great Lakes, Lake Ontario, be renamed Lake America following sharp language about Trump from Ontario's Premier, Doug Ford.

In posts on Truth Social over the weekend, Trump mused about banning the sale of aircraft built by Montreal-based Bombardier in the U.S., and suggested the Canadian dollar was undervalued. Shares in Bombardier were down over 4% in the Toronto stock market, and the Canadian dollar was slightly stronger relative to its U.S. counterpart, in trading early Tuesday.

Write to Paul Vieira at paul.vieira@wsj.com

(END) Dow Jones Newswires

September 08, 2026 10:25 ET (14:25 GMT)