Can globalist former central banker Mark Carney take the fight to Donald Trump’s tariffs?

Banker Mark Carney, who will now lead Canada, is set to up against Donald Trump. Picture: Andrej Ivanov/AFP

Globalist, urbane and green central banker. Mark Carney is the most unlikely figure to lead Canada in an almighty trade war against US President Donald Trump, the street fighter protectionist.

Carney, a political novice, was overwhelmingly named as the replacement to Canadian Prime Minister Justin Trudeau, who resigned earlier this year.

The Canadians are betting the house on Carney, a formal central banker and a novice politician who now stands between the White House to the potential for their economy to be crushed.

The stakes couldn’t be higher. At risk is the future of the Canadian economy as Trump wields 25 per cent across the board tariffs. There has been yet another reprieve for both Canadians and Mexicans on tariffs for carmakers and some other industries, yet Trump has vowed to push ahead. On being named new Prime Minster, Carney said Canada cannot let Trump succeed.

US President Donald Trump and Canadian PM Justin Trudeau meet in the Oval Office of the White House in Washington in February. Picture: AFP

The Canadians have retaliated with a 25 per cent tariff on $US155bn of goods imported from the US. However, Canada is so exposed to US trade, tariffs have the potential to cripple the economy.

Carney is the polar opposite of Trump in every way.

A cautious former central banker who headed both the Bank of Canada and became the first outsider to head the Bank of England. Carney is an inflation fighter, he is pro-trade; diplomatic and someone who reason over emotion. There’s a generational gulf Carney is 59, and Trump 78.

He is cut from the same Canadian cloth as the Rio Tinto chairman and former diplomate Dominic Barton, or BHP’s intellectually charged leadership team of chair Ken McKenzie and chief executive Mike Henry.

In Australia, Carney was the friendly public face of Brookfield’s since aborted $20bn bid it was leading energy generator Origin Energy. At the time, Carney headed up Brookfield’s global transition fund that promised to take old world polluting assets and turn them into clean green-friendly energy assets.

The US and Canadian flags fly on the US side of the St. Clair River near the Bluewater Bridge border crossing between Sarnia, Ontario and Port Huron, Michigan. Picture: AFP

Even so, at the time former PM Paul Keating saw through it, hitting out at Brookfield as a “profiteering private equity fund” looking to buy assets cheaply using “corporate finance trickery” then sell the strategic assets back at a higher price. Despite the tap from Keating, Carney is well-connected in Australian business circles given his experience in Brookfield and central banking.

It was during the lead up to the UK’s heated Brexit vote, when as Bank of England governor Carney drew controversy when he warned of the likely damage to the economy for pulling out of the European Union. This was seen as straying into politics – a no-go area for central bankers.

In an interview with The Australian in Sydney two years ago, Carney said since the Covid-19 pandemic there was “a rewiring of globalisation” which represented a supply shock.

“An extreme version of that was Brexit, which absolutely was a supply shock,” he said at the time.

“And if I go back to that situation, which I lived through – we said at Bank of England right from the start that in the situation where you get large supply shocks, and it will have several consequences”.

“One of them is that the economy will slow because the supply capacity is slow. Secondly, that inflation will go up because you’ve had a supply demand imbalance. And thirdly, that it’s likely necessary that monetary policy be tightened. And we said that absolutely, clearly. There were a number of commentators who found that very improbable, but that’s exactly what’s happened on a large scale”.

For a globalist like Carney, tariffs represents another extension of a supply shock.

On the Origin bid, Carney was talking up Brookfield’s green credentials, shifting the Australian energy player off coal-fired generation to tens of billions in investment on hydro, solar and wind.

Carney said at the time that Brookfield had the ability to “bring in the capital and the expertise to help address climate change”.

Is Carney really the one to take on Trump?

To be sure, this is an uneven match-up. It almost seems unfair. Trump is attracted to ruthlessness and power. Carney, with almost no political experience, still faces a contested general election leading a tired government.

In many ways, an urbane opponent is a very Canadian response to Trump.

For one, Carney is extremely well-connected and respected by Europeans who are facing their own battles with the White House. He has the backing of centralists in the UK for being one of the few to call out Brexit.

Carney could make headway to forge an alliance among globalists including Australia against Trump’s tariffs.

He could perplex Trump and make pointed inroads into the president’s biggest vulnerability – that is the potential for tariffs to damage the US economy and the stock market. Whether Trump listens is another case entirely.

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