Carney warns of signs that global economies are slowing amid Trump’s tariffs

Prime Minister Mark Carney arrives at the Legislative Assembly of British Columbia in Victoria, Monday, April 7, 2025. THE CANADIAN PRESS/Sean Kilpatrick

Prime Minister Mark Carney said there are signs the global and Canadian economies are slowing as U.S. President Donald Trump’s trade war escalated again Friday, with China announcing it will push up retaliatory tariffs to 125 per cent.

“In the last week there have been a lot of developments in terms of U.S. tariffs policy, reactions from others including China. It really marked tightening in financial conditions ... the initial signs of slowing in the global economy,” Carney said.

“Impacts that we are starting to see ... unfortunately in the Canadian economy, particularly in the Canadian labour market.”

The Liberal leader took a day off the federal election campaign trail Friday to convene the cabinet committee on Canada-U.S. relations after a raucous week of White House tariff manoeuvres.

Markets have been in turmoil since Trump brought his trade war to the world, only to drastically change course. He paused his so-called “reciprocal” tariffs Wednesday shortly after putting the duties in place.

Trump kept in place a universal 10 per cent tariff, as well as 25 per cent duties on steel, aluminum and automobile imports to the United States. The president also pushed tariffs on Chinese imports to 145 per cent.

American tariffs on Canada did not change.

Prices for longer-term U.S. Treasury bonds fell Friday — moving their yields higher — while the price of gold rose, sending worrying signs to market observers.

White House press secretary Karoline Leavitt said Americans should “trust in Trump” after University of Michigan data showed U.S. consumer sentiment plunged this month. Leavitt said past presidents accepted “the failed status quo” on trade but “that’s not who this president is.”

Trump’s administration has said more than 75 countries are looking to make a deal before the 90-day pause on reciprocal tariffs is set to lift. Leavitt said countries need America to survive “and the president is using that leverage to our advantage.”

The Canada-U.S.-Mexico Agreement on trade was negotiated during the first Trump administration to replace the North American Free Trade Agreement. At the time, Trump hailed the agreement. Experts say his tariffs are undermining the continental trade pact.

Carney, who spoke with Trump by phone late last month, said the president agreed to begin negotiations on a new economic and security agreement after Canada’s election. Carney said he left instructions with officials to prepare the next government for negotiations with the Trump administration following the April 28 vote.

— With files Kelly Geraldine Malone in Washington

This report by The Canadian Press was first published April 11, 2025.