As Carney visits Trump to discuss trade-security deal, diplomatic and business leaders warn of potential consequences

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Prime Minister Mark Carney will kick off talks with Donald Trump Tuesday in a bid for a comprehensive deal on trade and security, but top business and diplomatic voices are warning that linking the two issues in a single pact will only make it easier for the U.S. President to punish Canada with tariffs if he’s unhappy with its military or border spending.

Mr. Carney flew to Washington Monday ahead of a working lunch Tuesday with Mr. Trump at the White House – what could be the most important meeting between a U.S. president and Canadian prime minister in decades.

Mr. Trump unleashed a damaging trade war on Canada in what he has framed as a bid to annex the country as the “51st state.” The economic attack is discouraging capital investment and cross-border business, jeopardizing Canada’s auto, metals and other sectors.

Mr. Carney‘s bid to end the trade war follows from a March agreement with the President that the country’s leaders would begin “comprehensive negotiations about a new economic and security relationship” after the Canadian federal election, as described in a statement from the Prime Minister’s Office.

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Mr. Trump, for his part, adopted a nonchalant air about Mr. Carney’s visit, professing ignorance about what is driving the leader of one of the United States’ biggest trading partners to seek an audience with him.

“I don’t know. He’s coming to see me. I’m not sure what he wants to see me about, but I guess he wants to make a deal. Everybody does,” he said Monday in the Oval Office when asked what he expected from the meeting. “They all want to make a deal because we have something that they all want.”

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Mr. Carney’s talk of tying trade to other bilateral irritants – Mr. Trump has complained that Canada does not contribute enough to the NATO defence alliance or take border security seriously – cuts against previous negotiations that did not put security measures into commercial agreements.

Goldy Hyder, president of the Business Council of Canada, said the two countries should be “keeping separate things that are separate.” Canada’s economic record with the U.S. is solid while its laggardly spending on defence is a legitimate cause for concern among allies, he noted.

Canada, the U.S. and Mexico are already due for renewal negotiations on the United States-Mexico-Canada Agreement (USMCA) in 2026 and all trade concerns should be channelled into this, he said.

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Mr. Hyder noted that Canada joined the U.S. in placing hefty tariffs on Chinese-made electric vehicles, in the interest of protecting the North American auto sector. “The actions that we’ve taken related to China, they’re as strong as America, if not stronger and we’re paying the price for the EV tariffs that are being imposed with China’s countertariffs on our canola and so forth.”

International Trade Minister Dominic LeBlanc, Foreign Affairs Minister Mélanie Joly and Public Safety Minister David McGuinty accompanied Mr. Carney on the trip to Washington. They will join the leaders at the White House lunch, the Prime Minister’s Office said.

Louise Blais, who was Canada’s No. 2 diplomat at the United Nations during Mr. Trump’s first term, warned that tying defence, critical minerals or other matters to trade in what she termed “one big deal” with Mr. Trump could be potentially dangerous for Ottawa.

Such an agreement, she said, could make it easier for the U.S. to use the economy, and the threat of inflicting financial pain, as a bargaining chip to push Canada on other unrelated disputes.

“It accepts the President’s view that tariffs can be used as a tool to punish allies for failings in other areas than trade. We should avoid this exposure at all costs,” she wrote in an e-mail.

Instead, she contended, Canada would be better off aiming for a side agreement with the U.S. on defence and border security that would keep these matters separate from USMCA.

Any such security pact should also contain language that explicitly recognizes both countries’ territorial integrity in a bid to shut down Mr. Trump’s repeated threats to annex Canada and make it the U.S.’s 51st state, Ms. Blais said. “We are in a rightful position to demand that our sovereignty no longer be put into question.”

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Mr. Hyder also cautioned against any deal with Mr. Trump that would more closely integrate Canada with the U.S., saying that Canadians need to shift trade dependency away from the Americans. “Are we going to sell them all our critical minerals, all our oil, natural gas, potash and uranium? Not a good idea,” he said. “That’s how we’re in this mess.”

He said Canada needs to be careful when talking about a comprehensive deal because the worst outcome would be getting further drawn into the U.S. economy.

Comprehensive is “a word that means different things to different people. We need to be clear what it is we’re talking about because last thing we want is to end up with the very thing we’re trying to avoid, which is overreliance on a single market.”

“What is most needed is to reduce uncertainty on trade and tariffs.”

Unlike in Mr. Trump’s first term, where his anger over the U.S.’s goods trade deficit with Canada and Mexico was swiftly channelled into USMCA negotiations, the President has not this time outlined what talks would look like and has made few specific demands.

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He has also repeatedly called for Canada to become the U.S.’s “51st state,” a prospect roundly rejected by Mr. Carney and Canadian voters. In a weekend interview with NBC, Mr. Trump did not categorically rule out achieving this by military invasion, saying only that “I think we’re not going to ever get to that point” and “it’s highly unlikely.”

In recent days, Mr. Trump has acknowledged that his trade policies could cause economic pain for Americans but that it would be worth it to ensure the U.S. stopped importing so many foreign-made products. He told NBC that children may have to make do with fewer goods.

“I’m just saying they don’t need to have 30 dolls. They can have three. They don’t need to have 250 pencils. They can have five,” he said.

Ontario Premier Doug Ford asked Mr. Carney to keep the provinces abreast of Canada-U.S. talks in a letter he released publicly Monday. “As Canada moves forward with the United States on a renewed security and economic partnership, Ontario expects frequent, ongoing and meaningful engagement by the federal government with all provinces and territories at all stages to ensure our core interests are reflected in any outcome,” the Premier wrote.

Mr. Hyder said Canada must also find a way to expedite increased exports of valuable commodities, from petroleum to minerals, to new markets – a task that includes faster approval of resource extraction and pipeline and port projects. “I’ve been all over the world. The message from other countries is, ‘Sell me more critical minerals, sell me more potash, sell me more uranium, sell me more oil and gas.’”

U.S. Commerce Secretary Howard Lutnick accused Canada Monday of leeching off the U.S. and said he wasn’t sure if a deal was possible.

“They have basically been feeding off of us for decades upon decades upon decades, right. They have their socialist regime and it’s basically feeding off of America,” Mr. Lutnick said in an appearance on Fox Business. “I just don’t see how it works out so perfectly.”

Mr. Lutnick said Mr. Trump frequently complains: “‘Why do we make cars in Canada? Why do we do our films in Canada?’ Come on.”

Asked by host Larry Kudlow whether trade under USMCA would remain untouched by tariffs, Mr. Lutnick said to expect a major revision of the trade deal when it comes up for review next year.

“For now, it’s okay, but I think you should expect to see a real revisiting of USMCA in a year,” he said.

Mr. Trump, asked by media Monday whether his repeated calls for the U.S. to annex Canada amounted to a bid to make the U.S. the world’s largest country by land mass, shrugged it off.

“I never even thought of it that way, even though I am a real estate developer. I never even heard that question,” Mr. Trump said.

At a White House event Monday, held to announce that the National Football League would hold its 2027 draft in Washington, Mr. Trump referenced a provision in the U.S.-Mexico-Canada Agreement negotiated in his first term that allowed the NFL to ignore a Canadian regulatory decision on the airing of Super Bowl ads.

“Canada does not like me much. They gave a great American company a lot of money that you deserved, frankly,” he told NFL commissioner Roger Goodell.

Six state governors in the northeastern U.S., for their part, tried to go around Mr. Trump on Monday by inviting six Canadian premiers to a meeting in Boston to discuss ways of working together to keep trade ties strong. The group, led by Massachusetts Governor Maura Healey, also includes the governors of New York, Connecticut, Maine, Rhode Island and Vermont. The invitation is for the premiers of Ontario, Quebec, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island. All of the U.S. governors involved are Democrats, except Vermont’s Phil Scott.

“I don’t believe increasing tariffs on our friends and close allies is in the best interest of Vermont or the United States,” Mr. Scott said in a statement. “A trade war with our friends to the north, our largest trading partner, seems like a bad idea.”