**JUST IN: Carney Builds Alternative Trade Bloc | India–Japan–Australia Deal Reshapes Market Access 🌏**

Ottawa / New Delhi / Tokyo – February 17, 2026

In a move that has stunned global trade watchers and sent immediate ripples through commodity and currency markets, Canadian Prime Minister Mark Carney announced this morning the formal signing of a landmark trilateral trade and supply-chain agreement with India, Japan, and Australia. The “Indo-Pacific Prosperity Partnership” (IP3) — unveiled in a joint virtual ceremony from Ottawa, New Delhi, Tokyo, and Canberra — creates a new preferential trade bloc that excludes the United States for the first time in modern North American history and is widely seen as Ottawa’s strategic answer to escalating U.S. tariff threats under the lingering influence of former President Donald Trump.

The deal, negotiated in secret over the past nine months and accelerated dramatically in the last six weeks, includes:

– Zero tariffs on 92% of goods traded among the four nations within five years
– A shared critical-minerals security pact guaranteeing priority access to Canadian nickel, cobalt, and lithium for Japanese battery manufacturers and Indian EV producers
– Mutual recognition of food-safety standards that opens Australian and Indian markets to Canadian beef, pork, canola, and potatoes while giving Canada tariff-free access to Indian pharmaceuticals and Australian critical minerals
– A new dispute-resolution mechanism that bypasses the WTO and allows binding arbitration without U.S. participation
– A $12 billion joint infrastructure fund to build alternative shipping lanes, port upgrades, and rail links that reduce dependence on U.S.-controlled trade corridors

Carney, speaking from the Centre Block in Ottawa, was blunt about the motivation.

“For too long Canada has been told we have no choice but to accept whatever terms Washington dictates,” he said. “That era is over. When our largest trading partner threatens punitive tariffs on essential goods — lumber for American homes, energy for American factories, potatoes for American tables — we do not beg. We diversify. We build new alliances. And we protect our workers and our sovereignty.”

The announcement came just 14 hours after Trump posted a 22-part Truth Social thread renewing his demand for Canada to “pay billions in back subsidies” or face 25% tariffs on all goods. The timing was not coincidental. Multiple Ottawa sources confirm the IP3 signing was deliberately accelerated to coincide with Trump’s rhetoric, turning a long-planned diversification effort into a highly visible geopolitical signal.

Markets reacted in real time. The Canadian dollar surged 2.7% against the U.S. dollar — its largest single-day gain since March 2020. Australian and Indian stock indices rose 1.8–3.1% on mining, battery, and pharmaceutical stocks. U.S. agricultural futures (corn, soybeans) fell 3.4–5.2%, while Canadian potato futures jumped 17%. Shares of Lamb Weston and other U.S. frozen-potato processors dropped 8–12% on fears of long-term supply uncertainty.

Wall Street analysts described the move as “strategic decoupling in real time.” “Carney just turned Trump’s tariff hammer into a boomerang,” said a senior Bank of America trade strategist. “By locking in alternative markets for critical commodities, Canada has reduced its vulnerability to U.S. unilateral action and created a credible counterweight in the Indo-Pacific.”

The deal has immediate implications for U.S. consumers. Canada supplies roughly 68–72% of frozen french fries consumed in the United States. With new export-licensing requirements already slowing shipments, major quick-service chains are preparing for potential 5–12 cent per-portion price increases or portion reductions. Several chains have quietly begun testing Idaho and Washington potatoes, but industry sources say scaling domestic production to replace Canadian volumes would take 18–36 months and cost billions in new processing capacity.

Trump responded with fury on Truth Social at 10:19 a.m. ET:

“Carney and his globalist friends just formed an ANTI-AMERICA trade bloc! India, Japan, Australia — they’re all scared of STRONG leadership. Canada will regret this. 25% tariffs stay until they crawl back. American workers will WIN BIG!!!”

The post was viewed more than 71 million times but drew sharp pushback from U.S. farm-state Republicans. Sen. Joni Ernst (R-IA) told reporters: “Soybean farmers in Iowa cannot survive another round of retaliation. We need real negotiations, not threats.” Similar statements followed from senators in Minnesota, Wisconsin, North Dakota, and Montana — states that flipped narrowly to Trump in 2024 and remain pivotal in 2026.

Acting President JD Vance’s economic team is reportedly divided. Trump-aligned advisors are pushing for immediate Section 232 national-security tariffs on Canadian energy and lumber; pragmatic voices warn that broad duties would spike U.S. gasoline prices by 40–60 cents a gallon and add thousands of dollars to the cost of new single-family homes — outcomes that would be electoral poison ahead of midterms.

The episode has become a defining moment for Carney — the former central banker who became prime minister in late 2025 — and for Trump, who continues to wield enormous influence despite no longer holding executive authority. Many analysts now describe it as the first real test of whether Trump’s second-term foreign-policy instincts can survive contact with reality when he no longer controls the levers of executive power.

What began as a seemingly narrow dispute over potatoes has suddenly become a high-stakes test of leverage, resolve, and economic interdependence. For Trump, the episode is a painful reminder that his policy preferences still command headlines — but his ability to force compliance has been dramatically curtailed since losing executive authority.

As emergency consultations begin this week, the world is watching to see whether North America’s most important economic relationship can be repaired — or whether a single vegetable becomes the spark for a much larger continental fracture.