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Mark Carney has officially taken over as Canada’s 24th prime minister, stepping into power at a time when the country is locked in a high-stakes trade war with the U.S. He was sworn in on Friday in Ottawa, just days after the Liberal Party overwhelmingly voted to replace Justin Trudeau with him.
Carney, a former central banker, immediately addressed the growing tensions with President Donald Trump, telling reporters that discussions with the U.S. administration had made “progress” despite the economic standoff. “I respect what he is looking to accomplish,” Carney said. “We’ll both be looking out for our countries. He knows, and I know from long experience, that we can find mutual solutions that win for both.”
<h3 id="carney-builds-smaller-cabinet-ahead-of-looming-election">Carney builds smaller cabinet ahead of looming election</h3>
Carney moved quickly to restructure Canada’s government, rolling out a cabinet smaller than Trudeau’s and designed for short-term governance. An election is expected in weeks, and Carney is assembling a team built for the moment. Francois-Philippe Champagne is now finance minister, Dominic LeBlanc moves to international trade, Melanie Joly remains in charge of foreign affairs, and David McGuinty continues as public safety minister.
The new prime minister wasted no time setting the tone for his administration. “Canada’s new government will be action-oriented, driven by a smaller but highly experienced team made to meet the moment we are in,” Carney <a href="https://www.bloomberg.com/news/articles/2025-03-14/carney-sworn-in-as-canada-leader-with-trade-dominating-agenda?utm_campaign=socialflow-organic&amp;utm_source=twitter&amp;cmpid%3D=socialflow-twitter-economics&amp;utm_content=economics&amp;utm_medium=social&amp;utm_source=twitter&amp;utm_campaign=socialflow-organic&amp;cmpid%3D=socialflow-twitter-economics&amp;utm_content=economics&amp;utm_medium=social&amp;embedded-checkout=true" rel="noopener noreferrer nofollow" target="_blank">said</a>. His immediate focus: “Protecting Canadian workers and their families in the face of unjustified foreign trade actions. And second, growing this great country by putting more money in Canadians’ pockets.”
Carney’s arrival in politics is unlike anything seen before. He is the first Canadian prime minister in over 150 years to take office without ever holding a House of Commons or Senate seat. The last person to do so was in 1867. His first challenge? Handling Trump’s economic aggression. The U.S. has imposed harsh tariffs on Canadian goods, and Canada has retaliated. Trump has also suggested that Canada should join the U.S., an idea Secretary of State Marco Rubio recently backed by making an economic case for it.
Carney dismissed the suggestion outright. “It’s crazy,” he said. “Before we get to the economics of it, we won’t be part of it. And when we get to the economics, and the president is a successful businessperson and dealmaker—we’re his largest client in so many industries.” He added, “Clients expect respect and working together in a proper commercial way. So the nature of Canada means we won’t, the economics means we shouldn’t.”
The economic fight is already affecting business confidence. Consumer spending is slowing, and with more tariffs set to hit next month, some economists warn that Canada could fall into a recession before the year ends. Carney has no immediate plans to visit the U.S., saying he would speak with Trump at the “appropriate moment.”
<h3 id="carney-scraps-carbon-tax-faces-political-battle-with-poilievre">Carney scraps carbon tax, faces political battle with Poilievre</h3>
Carney’s first major policy move was to eliminate the consumer carbon tax, a controversial policy under Trudeau’s government that had become a political burden. Conservative leader Pierre Poilievre had long blamed the tax for making life more expensive, and with inflation still high, Carney removed it immediately.
The upcoming election will be a direct contest between Carney and Poilievre, but the Conservatives’ once-massive lead in the polls has shrunk. Poilievre has attacked Carney’s new cabinet, arguing that it’s just the same group of politicians from Trudeau’s administration with minor changes.
“Mark Carney thinks Canadians are stupid,” Poilievre said. “He thinks that a little bit of cosmetic surgery will allow the Liberals to disguise who they are and make people forget what they did for 10 years.”
Carney’s first cabinet meeting took place on Friday afternoon. He reduced the number of ministers from 37 to 24 to create a leaner team. He moved Steven Guilbeault from environment to a new Canadian culture and identity role, put Rachel Bendayan in charge of immigration, and named Anita Anand as industry minister. Chrystia Freeland, Carney’s rival in the Liberal leadership race, was given the transport and internal trade portfolio. Jonathan Wilkinson remains as energy minister.
Carney is no stranger to handling economic crises. During his time as Bank of Canada governor, he navigated the country through the 2008 financial crisis, slashing interest rates to nearly zero. As Bank of England governor, he managed the UK’s economy through Brexit turmoil. But this time, it’s different. Politics is an entirely new arena, and he knows he needs a mandate from voters. He told reporters an election announcement is coming “in the coming days.”
While Carney focuses on domestic issues, he is also turning to foreign relations. He plans to travel to France and the UK next week to strengthen alliances with European partners, who are also caught in Trump’s trade war. Meanwhile, his office is preparing a phone call with Ukraine’s President Volodymyr Zelenskiy, signaling that Canada will continue to support Ukraine amid ongoing tensions.
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Canada’s new PM Carney is optimistic about trade progress with Trump

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