Six months into his term, Canadian Prime Minister Mark Carney, a former banker, is grappling with a lackluster economy and growing difficulties, as he tries to steer the nation in a new direction while dealing with disputes involving its two largest trading partners.
Carney has not sealed a new economic relationship with the U.S., as promised during an election campaign defined by President Donald Trump's tariff and annexation threats and is locked in a trade war with Canada's No. 2 trading partner, China.
While his minority government has passed one key piece of promised legislation, his policies have angered some of the Liberal Party's progressive wing, including migrant advocates and environmentalists.
Carney, elected in April, argued that he was best placed to negotiate with Trump and steer Canada's economy through the crisis and was widely seen as a test case for how other global leaders might stand up to the U.S. president's trade demands.
But his administration has made concessions to the U.S., such as removing many retaliatory tariffs and dropping much of the fiercely patriotic language that mobilized Canadians against their southern neighbor. The moves suggest Carney has few options to exert pressure on the U.S., the destination for nearly three-quarters of Canadian exports.
Tariffs have impacted Canada's steel, aluminum and auto sectors and while Canada has avoided a recession, some analysts warn that economic malaise may spread in the coming months.
Polls suggest that nearly six in 10 Canadians approve of Carney and recognize the unique challenges of his job, although some indicate that his approval rating has slipped in recent months.
"Carney cannot realistically control the pace of any discussions with Donald Trump," said Nik Nanos, chief data scientist at Nanos Research, which shows 50.7% of Canadians favor Carney's leadership versus 28.6% for the opposition Conservatives led by Pierre Poilievre.
Carney said last week that talks with Trump would mostly move to a future review of the trade agreement between the U.S., Canada and Mexico.
His office did not respond to further requests for comment. Carney is also negotiating with China, which slapped import duties on Canadian canola in August, in response to Canada imposing tariffs on Chinese electric vehicles last year.
Canada's Trade Minister, Maninder Sidhu, is expected to travel to China in November to lower trade tensions.
"Canada is living in the land of bad options," said Michael Kovrig, a geopolitical adviser and former Canadian diplomat, adding that capitulating to China to counter the damage being done by the U.S. would be dangerous. Canadian officials last year concluded that China interfered in at least two federal elections.
The Nanos poll showed a rising unemployment rate and the economy has replaced U.S. relations as Canadians' primary concern. Carney has said Canada "needed the rupture" with the U.S. and that it can thrive despite the rift.
"We have what the world wants,” Carney said last week, referencing Canada's natural resources and its expertise in artificial intelligence. A former U.N. special envoy on climate and finance, Carney supports increasing Canada's energy production to export oil and liquefied natural gas to new markets.
Earlier this month, several thousand protesters gathered in various cities to protest Carney's policies on issues ranging from Indigenous rights to climate change to migration.
"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 environmentalist David Suzuki.
Jeremy Paltiel, a political science professor at Carleton University, said there were few palatable options for Carney amid continued uncertainty.
"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 said. "We’ve got to figure out how to keep up investment and prepare for whatever might be coming next."
