From golf balls to trade talks: Mark Carney negotiates tricky path forward with Donald Trump

The prime minister was headed to a leaders-only evening reception hosted by the U.S. president when he eyeballed a staffer’s souvenir purchase of UN-labelled golf balls from the UN gift boutique, and seized on them.

Carney offered Trump the UN golf balls as a token of thanks, said a source with knowledge of the gift, who downplayed its role as an ice breaker, saying it was a simple gesture to the host. The Star agreed not to identify the source because they were not authorized to discuss details publicly.

But a second source, also with knowledge of the gift, said Trump loved it, and responded by inviting Carney to come to Washington to talk more at length. A smart play by Carney, said the second source, who quipped that Trump would have a chance to whack the UN whenever he swung at the golf ball.

Whatever Carney’s intent, there was a seeming thaw, and movement.

Carney took up Trump’s invitation despite no guarantee of a concrete outcome. The two leaders got along in front of the cameras. Carney dined later that night with Vice-President JD Vance and his wife, Usha Vance. And Dominic LeBlanc, Carney’s lead minister on the trade file, remained behind for another two days to keep talking.

The trip to Washington did not produce any new comprehensive economic and security deal that Carney once eyed, nor did it produce any easing of U.S. tariffs that are hitting various Canadian sectors, like autos, auto parts, steel, aluminum or lumber.

But it did shine a clear spotlight on where things may go. It also led to a new candour on the Carney government’s part.

Carney publicly acknowledged Friday for the first time that there is no hope of a future return to a completely tariff-free free-trading era. 

Instead, Carney outlined his new goal: aim for sectoral side deals that are better than the kinds of deals that other U.S. trading partners like the United Kingdom, the European Union or Japan have struck. Those still include baseline American tariffs ranging from 10 to 15 per cent, and retention of some of the global sectoral tariffs.

“We’re looking for things that other countries have not received, to be clear, and that’s why the negotiations are, as the president said, the negotiations are tough,” Carney said Friday.

It was Trump’s point man on trade, Commerce Secretary Howard Lutnick, who first pulled back the curtain on the new trading reality Wednesday, as the Star reported, bluntly telling a Toronto audience tariffs are here to stay. 

On Friday, Carney underscored that right now, most Canadian exports to the U.S. which comply with the rules of origin under the Canada-United States-Mexico Agreement — the free trade pact known as the USMCA in the U.S. — have been exempted from Trump’s overall tariffs. That carve-out, Carney says, covers about 85 per cent of Canada’s trade to the U.S.

But Carney acknowledged keeping that carveout depends on keeping “that USMCA framework” — which Trump is ambivalent about. Trump said in the Oval Office that he has no preference about whether the upcoming review of the current North American trade agreement leads to a renegotiated trilateral deal or splits into separate arrangements with each country.

And Carney admitted that “what’s also very clear is that there are certain sectors — steel, aluminum, autos, forest products, pharmaceuticals — where the Americans have decided are strategic and they have trade actions against everybody in the world … and we are negotiating specific sectoral deals with them which would likely persist with a revised USMCA.”

To land those side sectoral deals, Carney also acknowledged, he and Trump and their respective negotiating teams “have been in conversations over time about where there are opportunities for co-operation and where there are cases where there will be competition between our two economies.

“We’re bearing down on a few projects within the energy sector” — which he acknowledged includes the KXL proposal to expand the Keystone pipeline running from Alberta to Texas — “intensive negotiations that are in train right now for the sectors of steel and aluminum, and in parallel conversations on forest products and automobiles and others.” 

Canadian government officials are mum about the KXL discussions.

And a day after a key lumber sector representative blasted the government over failing to publicly raise its concerns, Carney admitted lumber tariffs are “a difficult situation.” There are several kinds of import duties on Canadian softwood products which are the subject of court challenges in the U.S.

“In our view, it is unjustified,” said Carney, adding he believes “it’s better to have a negotiated agreement, not necessarily to rely on court decisions, because that takes more time and people have to work.” He stressed the government will continue to support the softwood sector with “structural funds, liquidity … and training for workers” while negotiations continue.

On Friday, LeBlanc arrived back in Canada, saying he’d had “productive engagements with senior American officials,” that Ambassador Kirsten Hillman would continue talks “towards trade resolutions that will bring greater certainty to both of our countries,” and he would be “back in D.C. soon.”

So no hole-in-one for the Carney government, but an ongoing tournament of hope.