As in any great sports rivalry, trash talking and posturing preceded the first meeting of Canadian Prime Minister Mark Carney and U.S. President Donald Trump on May 6. At the first encounter the two teams showed off their strengths but were remarkably disciplined. Both sides knew that this was the start of a playoff series and took the measure of the other seriously.
Despite Trump’s denials, Canada produces a lot that the United States needs, from oil, critical minerals, and fertilizers to manufactured goods, software, and services. Canada’s geography is even more strategically important to the United States than either Greenland or Panama—and it is more secure, a fact often forgotten amid debates about low Canadian security spending.
The United States has revived nineteenth-century taunts about annexing Canadian territory, and Trump dismissed the 49th parallel that forms much of the border as “an artificially drawn line.” Why either matters when the president thinks Canada has nothing the United States needs is a question that reveals the true interest of the United States in Canada.
Carney’s debut on center ice in Washington had his fans on the edge of their seats, wondering how he would handle himself under playoff-level pressure. On the day, Carney did well, making his points confidently and overcoming the rookie nervousness he surely felt at some level. You can play confidently during the regular season and in a variety of rinks and conditions but still be awed by a big game against a storied rival.
Now that the first encounter is over, it will be “game on” for both sides.
President Trump’s tariffs pose a direct threat to the Canadian economy. Carney would prefer to set aside these tariffs and begin the review of the United States–Mexico–Canada Agreement (USMCA) early and address Trump’s concerns about economic imbalances in a comprehensive trade negotiation. Business investment requires risk assessment, and tariff uncertainty is making investors hold back. That will hurt both economies, but the smaller and more trade-reliant Canadian economy is more directly and seriously affected.
But there are clear signs from the Trump administration that what they want is not just some adjustments around USMCA and action on the border against illegal migration and the flow of fentanyl from Canada. Rather, they are seeking a comprehensive renegotiation of the entire bilateral relationship around three central issues. The administration expects Canada to shoulder more of the burden for continental defense, secure the border, and renegotiate USMCA to close the door to China and hammer out an agreement that is more favorable to the United States. Until President Trump scores this hat-trick, he is unlikely to offer relief on tariffs—unless compelled to by domestic pressure, if and when the tariffs bite hard at home. The Oval Office meeting showed the Canadian prime minister understands this will be a comprehensive renegotiation.
Global security is a threat facing Canada and the United States, with the latter more exposed to great power competition and the risk of conflicts abroad drawing on U.S. diplomacy and military forces, and the former needing to strengthen its military and especially its defense of the Arctic. A growing consensus among Canadians to increase defense and security spending has been caught up in the posturing by both sides. Prime Minister Carney seems eager to lessen Canada’s reliance on U.S. military equipment or at least ensure that large purchases include some manufacturing and maintenance systems at home. The review of the F-35 purchase he ordered is part of this calculus, as is consideration of the Saab Gripen fighter, which could possibly be assembled in Canada.
At the same time, the prime minister publicly promised President Trump a “step-change” in Canada’s defense investments and in its partnership with the United States when they met in the White House. The two countries are discussing Canada’s possible participation in its neighbor’s “Golden Dome” missile defense system for North America. Prime Minister Carney has also said Arctic sovereignty is a strategic priority for his government, as it also is for the United States, representing the northern approach to North America. The prime minister recently announced a new military base at Iqaluit, Nunavut, and increased year-round defense presence in the high north, along with a CAD 6 billion contract with Australia for over-the-horizon radar as part of the joint U.S.-Canada North American Aerospace Defense Command modernization.
During their meeting, Prime Minister Carney was quick to say that his mandate was comparable to the president’s, with a similar focus on securing the border and fighting the scourge of fentanyl. Much has been said of the very small amounts of fentanyl entering the United States from Canada, leading Canadians to dismiss the president’s concerns as unfounded. But there is an estimated CAD 113 billion that gets laundered in and through Canada annually, and the country has become a preferred destination for illicit money, much of it gained from drug trafficking, including fentanyl. Attacking these gains through the recently established U.S.-Canada Integrated Money Laundering Intelligence Partnership should be a priority for both countries. So too should be hardening the border against illegal migration in either direction. The risk here is that the Canadian side, not fully convinced by U.S. claims, rags the puck and prevents action in an area that the United States already thinks Canada is complacent about.
President Trump has made much of the trade imbalance with Canada, which is largely due to the U.S. consumption of Canadian energy. Without oil, gas, and electricity, the United States would, in fact, have a trade surplus with Canada. Sitting next to the prime minister, President Trump called USMCA very effective, but its members needed to increase their compliance (likely alluding to Mexico in addition to Canada), while he characterized it as a transitional agreement. An early renegotiation of the USMCA would benefit all three countries by ending uncertainty and allowing businesses to plan and invest. The United States will likely insist Canada end its supply management system, end perceived subsidies of softwood lumber, axe the digital services tax and the Online Streaming Act, and demand even tighter rules of origin. The United States may also want a new economic security chapter, which would include supply chain transparency, measures to prevent China from entering the USMCA market through a backdoor, cooperation on critical minerals, and greater security for investments. Some of these demands will be bitter pills for Canada to swallow, but others offer great opportunity. Prime Minister Carney will have to put his goalie skills to the test, blocking the hardest shots from the president.
The Oval Office opener made clear that President Trump and Prime Minister Carney understand the issues and the stakes, and both want to win. This is a playoff series, however, and will see many twists and turns before the outcome is clear. Unlike in sports, it is possible that Canada and the United States can both claim victory from improved bilateral relations.
Christopher Hernandez-Roy is a senior fellow and deputy director of the Americas Program at the Center for Strategic and International Studies in Washington, D.C. Christopher Sands is an adjunct lecturer and director of the Hopkins Center for Canadian Studies in the School of Advanced International Studies at Johns Hopkins University.
