Canada PM Carney Says Ottawa, Washington in Intensive Talks on New Economic, Security Deal — 3rd Update

By Paul Vieira

OTTAWA--Canadian Prime Minister Mark Carney said officials in Ottawa and Washington are engaged in intensive negotiations on a new bilateral economic-and-security deal, and it's neither in President Trump's or his interest to let talks drag on through the fall.

"We've got more that we need to do before we're satisfied that we have a partnership that is in Canada's interest," Carney said in a broadcast interview Tuesday with the Canadian Broadcasting Corp. "We've made a lot of progress."

Carney's Liberal government delivered its ceremonial Speech from the Throne, which marks the opening of Parliament after last month's election. The speech, read by King Charles III, focused on Canada's sovereignty and the need for an ambitious economic agenda as the country must deal with a protectionist U.S. Trump has imposed hefty 25% tariffs on Canadian steel, aluminum, assembled vehicles and goods that are not compliant with the existing U.S.-Mexico-Canada trade pact. Canada has responded with 25% retaliatory tariffs on about $43 billion of U.S. imports, but has since provided exemptions to the automotive and manufacturing sectors to give them time to find new non-U.S. suppliers.

Carney said it's his goal for the U.S. and Canada to agree on a new bilateral pact in the coming months that removes the hefty tariffs. "I don't think it's in either of our nation's interests for it to drag out," Carney said.

Last week, Bank of Canada Gov. Tiff Macklem warned the economy might deteriorate further unless there's a quick end to the current U.S.-Canada conflict.

Carney is a novice politician but a former central banker in two Group of Seven economies, Canada and Britain. Carney won last month's election on a pitch that he has the acumen and experience to navigate Canada through this present crisis, fueled by Trump's tariffs and threats to annex Canada as the 51st state.

In the interview, Carney reitirated that the decades of close integration between the two countries is over. "We are seeing the danger of overreliance on the United States," he said. "So we will cooperate where necessary, where it is in both of our interests very clearly, but we won't necessarily cooperate." The speech to parliament highlighted the need to build deeper economic and defense ties with Europe and Asia.

Last week, Carney told journalists that Canadian officials are looking at possible participation in Trump's proposed Golden Dome shield, which would combine ground-based interceptors with satellites to guard U.S. territory against high-tech threats. After the CBC interview aired, Trump said on his Truth Social account that Canada would need to provide $61 billion to be part of the shield, "but will cost ZERO DOLLARS if they become our cherished 51st State. They are considering the offer!"

A Carney spokeswoman said senior officials are in talks with their U.S. counterparts on military cooperation, including the Golden Dome. The spokeswoman did not elaborate further in a statement.

Trump has argued the U.S. doesn't need energy, lumber and cars produced in Canada, and prefers that those products from America's northern neighbor be made domestically. Carney said Canada is an ideal partner for the U.S. to create a competitive, North American auto sector that faces a stiff challenge from China and other parts of Asia.

"Can the U.S. auto sector be viable if it's just an American auto sector? The answer is no," Carney said, citing the assembly plants and parts manufacturers that help feed U.S. demand. "That integration of the auto sector is part of what will make North America competitive, and that's what we're working towards."

Write to Paul Vieira at paul.vieira@wsj.com