Donald Trump and Mark Carney hold talks over US-Canada trade war tensions

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Donald Trump has described his first phone call with Mark Carney as “extremely productive” amid escalating trade war tensions between the US and Canada.

The US president posted on Truth Social that their conversation on Friday “was an extremely productive call, we agree on many things”, with the Canadian prime minister telling Trump that his government would implement retaliatory tariffs “to protect Canadian workers and our economy”.

The call took place following Trump’s announcement this week that he would place additional 25 per cent levies on imports of foreign-made cars in a move he said was intended to boost the US car industry.

The pair had “a very constructive conversation” and agreed to “begin comprehensive negotiations” about a new economic and security relationship and would meet after Canada’s April 28 election, according to a statement from the prime minister’s office.

Relations between the two allies and trading partners have been rocked by the tariffs announcement despite the USMCA free trade deal that the US president negotiated during his first term, along with his threats to make Canada the 51st state.

On Thursday evening, Carney said that Canada’s old relationship with the US was “over” and vowed that there would be a “broad renegotiation” of the trade agreement between the countries.

He added that Ottawa would fight American tariffs with retaliatory trade actions “that will have maximum impact in the US and minimum impacts in Canada”.

Since March 13, the Canadian government has put a 25 per cent tariff on products imported from the US worth C$29.8bn as part of its retaliation.

In his post on Friday, Trump said he and Carney had agreed to “work on elements of Politics, Business, and all other factors, that will end up being great for both the United States of America and Canada”.

Carney said they also agreed that talks between Canadian ministers and the US secretary of commerce Howard Lutnick “will intensify to address immediate concerns”.

Carney, a former Bank of England and Bank of Canada central bank governor, became leader of the Liberal party on March 9 after former prime minister Justin Trudeau resigned due to widespread national dissatisfaction with the party and his leadership.

Trump repeatedly referred to Trudeau as “governor” and threatened to annexe Canada. The succession of Carney as prime minister has been touted as a potential reset for US-Canada relations.

The US’s hostile stance towards its northern neighbour has led to a surge in support for the Liberal party, with some polls showing it could win the election — a remarkable turnaround after several years of trailing in the polls.

The Angus Reid Institute reported on Thursday that 56 per cent of voters who have switched to the party since the beginning of the year say it is because of the new leader.

“About the same number also say US president Trump’s threats have pushed them to support the incumbents,” the report stated.

While USMCA-compliant components are temporarily exempt from the car tariff Trump announced this week, the levy could have a big impact on the Canadian economy.

Trade between the two countries is worth about C$1tn a year, according to the Canadian Chamber of Commerce trade tracker.