Canada News Roundup: The G7, Trade Deficits and The Snowballing of Trump's Chaos
June 18, 2025
The G7 Summit: The World Leaders Hunkered Down
Prime Minister Mark Carney welcomed U.S. President Donald Trump to Alberta this week for the G7 summit, where trade and security took center stage. Carney, measured and diplomatic, faced a characteristically brash Trump, who pushed his “America First” doctrine with renewed force. Trump dangled the idea of a bilateral trade deal, only to undercut it with a jab: “I have a tariff concept. Mark has a different concept.”
Behind the photo ops, negotiations quietly intensified. Canada and the U.S. are now working from a shared draft framework that touches on Arctic investment, defense spending, and border security—but Trump’s 25% blanket tariffs on Canadian exports remain in place, as do a 10% tariff on energy and the newly escalated 50% duty on steel and aluminum.
Carney’s government is walking a tightrope: keeping talks alive while preparing retaliatory options. Foreign Minister Mélanie Joly is weighing countermeasures designed to hurt the U.S. economy without hurting Canadian consumers. Opposition voices like Conservative MP Melissa Lantsman say that’s not enough, pushing for emergency debates and stronger measures to protect domestic workers.
The Other G7 Story: Trump’s Early Exit
Trump’s abrupt exit from the G7 summit in Kananaskis raised eyebrows, even if it wasn’t formally addressed. He skipped bilateral meetings with India and Ukraine, dodged the final photo op, and departed early—reportedly to respond to rising instability in the Middle East. Meanwhile, protests over ICE crackdowns and detention conditions are boiling over back home in the United States, adding to an already combustible domestic atmosphere.
And yet, amid all of it, Trump remains singularly focused on his tariff-first economic strategy. Love it or not, the discipline—and the resilience—it takes to stay locked on one agenda while the world tilts is no small thing. One would think the chaos might eventually catch up to him. But so far, his ability to juggle crises without blinking is impressive (look, we don’t compliment him much, and we don’t like what he’s doing; but his ability to continue doing it is actually pretty remarkable).
The Economic Fallout: Tariffs Are Biting
The numbers are grim. Canada posted a record CAD 7.1 billion trade deficit in April—largely driven by a 15.7% collapse in exports to the U.S. as Trump’s auto tariffs took hold. Vehicle exports plunged nearly 23%, dealing a major blow to one of the country’s key manufacturing sectors. Add in a rising loonie, which makes Canadian goods more expensive abroad, and falling oil prices, which drag down one of our most export-heavy industries, and the economic picture deteriorates further.
Foreign investors appear to be taking notice. While equity prices have remained stable, and the Loonie has gained on the U.S. dollar, the first quarter of 2025 saw a staggering CAD 35 billion in capital pulled from Canadian equity markets. Some of that reaction may be psychological—Trump’s talk of trade annexation and economic punishment has made Canada look “uninvestible” to cautious global capital—but that fear isn’t entirely undeserved: the real-world consequences of a prolonged trade war could become quite systemic.
Ontario Ends U.S. Steel Imports
Carney has indicated that his strategy will be to build. But Premier Doug Ford isn’t waiting for the Feds to get moving on this. In a bold move, he announced a $30 billion Ontario-led initiative to onshore the production of steel, rebar, and other infrastructure essentials. The goal? Replace U.S. imports with domestic production, protect jobs, and send a message that Ontario isn’t afraid to act unilaterally.
The bigger underlying story here could, however, be that Ontario was in fact importing U.S. steel, rebar and other infrastructure essentials. This is yet another example of Canada producing products for export, and also purchasing the same products as imports. Perhaps that process makes sense to economic leaders and theorists, but the logic is beyond us. Which is to say: bravo Ford for beginning to unravel this seemingly questionable trade practice, and for helping to keep Canadian products and Canadian currency flowing within our own borders.
New Legislation: The One Canadian Economy Act
While external pressures mount, Canada is also turning inward to confront the inefficiencies that have long undermined its own economic potential. On June 6, Minister Dominic LeBlanc introduced the One Canadian Economy Act, aimed at reducing interprovincial trade barriers and improving labor mobility. The legislation targets an estimated $530 billion in internal commerce—roughly 20% of GDP—that continues to be choked by outdated, often arbitrary, provincial restrictions.
It’s a long-overdue move. For years, Canada has demanded access to foreign markets while failing to grant that same access within its own borders. The timing isn’t accidental—amid tariff wars and investor flight, there’s growing urgency to make better use of what Canada already controls. If the external message is self-reliance, then this legislation is the domestic counterpart: not a silver bullet, but a necessary correction.
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