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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.
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“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.
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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.
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“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.
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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.
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“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.
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‘Mutual de-escalation’
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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.
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Rather, Carney and his team are likely to go in with the hope of defusing the trade war through “mutual de-escalation.”
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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.
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“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.
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“Canada could (instead) offer certain concessions as part of a broad-based renegotiation of the CUSMA.”
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These could include giving up ground on Canada’s digital services tax or defence and NATO spending.
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“Concessions could also be offered in respect of dairy access, though Canada has stated that this would be off the table,” Pellerin said.
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‘We don’t have to do a deal in the short term’
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Carney himself has provided a number of direct clues as to how he plans to approach the talks with Trump.
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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.
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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.
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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.
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“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.”
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