Carney's Ticking Clock: Canadian Support for Trump Trade Tactics Waning

Canadian Prime Minister Mark Carney's negotiating position in the ongoing trade war with the US may be weakening, according to experts. While Canadians initially supported his decision to break off trade talks, widespread approval could disappear within months as the consequences of the trade war sink in.

The US economy is 13 times larger than Canada's, a country with a population roughly the size of California's. Carney's government announced dollar-for-dollar counter-tariffs on $20 billion of US goods, as well as a C$7.5 billion ($5.41 billion) package of economic support measures.

Julian Karaguesian, a former adviser at Canada's Finance Ministry and economics professor at McGill University, warned that Carney's leverage will start to diminish if the escalating trade war shows up in palpable increases in unemployment, factory shutdowns, and declining income.

Economists expect data later this week to show a sharp rebound in Canada's second-quarter economic growth, while its unemployment rate fell in July to 6.4%, a two-year low. However, Trump's latest tariffs affect 5% of Canadian exports, which could eventually result in 90,000 lost jobs.