US Trade War
Canada’s Liberal Party is set to announce the successor to Prime Minister Justin Trudeau on Sunday, marking a significant political shift as the country grapples with an escalating trade war with the United States. The newly elected party leader will not only take over as the head of the Liberal Party but will also assume the role of Canada’s prime minister, tasked with navigating growing economic uncertainty and looming political challenges.
The leadership change comes at a crucial moment, as US President Donald Trump threatens additional tariffs on Canadian goods, a move that could severely impact the nation’s economy. The new prime minister will need to engage in high-stakes negotiations with Washington while also preparing for an upcoming general election, where the opposition Conservative Party poses a formidable challenge.
Trudeau, who has been in power for more than nine years, announced his resignation in January following a sharp decline in approval ratings. His departure triggered an expedited leadership race within the Liberal Party, which is now set to conclude with Sunday’s announcement.
According to political analysts, the transition is taking place under less-than-ideal circumstances. “Is it ideal in a circumstance of bilateral crisis for us? I suppose not,” said Drew Fagan, a professor at the Munk School of Global Affairs and Public Policy. “But on the other hand, the process is playing out domestically as it should.”
Among the four candidates vying for leadership, former central banker Mark Carney has emerged as the clear front-runner. He has secured the most endorsements from party members and raised the most campaign funds. Carney, 59, has never held elected office, making his potential victory a historic moment for Canadian politics.
However, he boasts extensive experience in economic policy, having served as the governor of both the Bank of Canada and the Bank of England. He has argued that his expertise makes him the best candidate to handle Canada’s economic challenges and confront Trump’s aggressive trade policies.
His main rival, former Finance Minister Chrystia Freeland, has positioned herself as an experienced negotiator, citing her past dealings with Trump during his first term. However, her close association with Trudeau has made it difficult for her to distinguish herself as an alternative. Freeland resigned from Trudeau’s cabinet in December after he attempted to replace her, and she has since been critical of his government’s spending policies.
A recent Mainstreet poll indicated that Carney holds 43% support among Liberal Party members, while Freeland trails at 31%. Nearly two-thirds of Trudeau’s cabinet have publicly backed Carney, further solidifying his frontrunner status.
During his campaign, Carney has advocated for dollar-for-dollar retaliatory tariffs against the United States and proposed a coordinated strategy to boost domestic investment. He has also been critical of Canada’s economic growth under Trudeau, arguing that the country needs a fresh approach to fiscal policy.
The shift in leadership has contributed to a surprising political turnaround for the Liberals. At the beginning of 2025, the party was trailing the Conservatives by more than 20 points in the polls. However, Trump’s recent tariff threats and his provocative remarks about annexing Canada as the 51st US state have sparked a surge in Liberal support, bringing them neck-and-neck with the Conservatives in recent surveys.
“This is a rally-around-the-flag moment that we would never have predicted a year ago,” said Richard Johnston, a professor of political science at the University of British Columbia. “I think it’s probably true as we speak that the Liberals have been saved from political oblivion.”
Regardless of who wins the leadership race, the next prime minister will face critical decisions almost immediately. The minority Liberal government could face a confidence vote when Parliament reconvenes at the end of March, which may trigger an early election. The new leader may also opt to call a snap election instead of assembling a new cabinet. Canada’s next federal election is scheduled for no later than October 20.
If Carney wins, he could serve as prime minister without holding a seat in the House of Commons, but tradition dictates that he should seek to enter Parliament as soon as possible. The last Canadian prime minister to take office without a legislative seat was John Turner in 1984 after winning the Liberal leadership race.
The Liberal Party will begin announcing results at 6:30 p.m. (10:30 p.m. GMT) on Sunday, a moment that could shape Canada’s political and economic landscape for years to come.
