Canada must cut overdependence on US trade, says PM Mark Carney

Canadian Prime Minister Mark Carney has warned that Canada’s deep economic dependence on the United States, once seen as a major strength, has now become a strategic vulnerability that must be corrected amid rising global instability and shifting trade dynamics.

In a 10-minute video address released Sunday, Carney said Canada’s reliance on the US economy is no longer sustainable, calling it a “weakness that must be corrected.” He said the global environment is increasingly fragmented, shaped by geopolitical rivalry and protectionist trade policies.

He cited US tariffs under President Donald Trump , particularly affecting Canada’s steel, automobile, and export industries, saying they are hurting competitiveness and discouraging investment. Businesses, he added, are delaying expansion due to a “pall of uncertainty” in global markets.

Expanded reporting indicates Carney also framed the issue as part of a broader global shift, describing a breakdown of the rules-based international system , where trade is increasingly used as an instrument of geopolitical pressure.

He further referenced historical resilience, noting Canada has previously endured major global conflicts and adapted successfully, reinforcing the need for long-term strategic adjustment rather than short-term reaction.

Carney stressed that Canada cannot depend on expectations of a return to previous US policy norms, saying “hope is not a strategy and nostalgia is not a plan.”

He reiterated remarks made earlier at the World Economic Forum in Davos , where he warned against economic coercion by major powers and urged middle economies to strengthen autonomy.

The government’s strategy now includes attracting investment, expanding clean energy capacity, increasing defence spending, reducing internal trade barriers, and improving housing affordability.

A key focus will be the upcoming review of the North American trade framework (USMCA/CUSMA) in July , which is expected to redefine regional trade relations.

Carney said Canada must reduce reliance on a single partner and take full control of its economic future, despite its long history of close cooperation with the United States in global conflicts and alliances.