Relations between Canada and the US have deteriorated, particularly following Trump's imposition of tariffs, including a 25% tax on various Canadian goods, which prompted Canada to retaliate with approximately C$60 billion in tariffs.

The economic relationship between the two nations is deeply intertwined, with around 75% of Canadian exports going to the US, while Canada accounts for only 17% of US exports.

Carney and Trump have agreed to meet soon, emphasizing the importance of mutual respect between the two nations as independent sovereign states.

Canadian Prime Minister Mark Carney's recent remarks come on the heels of his Liberal Party's historic victory in a snap election held on April 27, 2025, amid rising tensions with the US.

He noted the potential for a free trade agreement with the UK, even though 95% of trade between Canada and the UK is already tariff-free.

Looking ahead, Carney stated that the upcoming G7 summit in June, hosted by Canada, will be crucial in shaping the future of global trade relations and testing the unity of the world's advanced economies.

In light of President Trump's controversial comments about making Canada the '51st state', Carney firmly rejected this notion, stating it will 'never, ever happen'.

Carney emphasized that Canada will engage in trade and security discussions with Trump only 'on our terms', ensuring respect for Canadian sovereignty.

Drawing on his background in banking and leadership roles at the Bank of Canada and the Bank of England, Carney highlighted the necessity of respect in negotiations with the US.

Despite the tensions with the US, Carney expressed optimism about strengthening trade relationships with other allies, particularly the UK and the European Union.

Currently, Canada is the largest foreign supplier of crude oil to the US, which is projected to have a trade deficit with Canada of $45 billion in 2024, largely driven by energy demands.

Carney pointed out that Canada is the biggest client for over 40 US states, underscoring the importance of vital energy supplies and agricultural products that Canada provides.