A.M. Edition for April 29. Former central bank governor Mark Carney leads his Liberal Party to a fourth term in office following a remarkable political turnaround. In a victory speech, Carney said Canadians were over the betrayal of Donald Trump’s tariffs, but that he was ready to negotiate with the president on new trade and security pacts. Plus, WSJ’s Stephen Wilmot says President Trump is expected to adjust planned auto tariffs so car companies aren’t hit by overlapping levies. And a new study from KPMG and the University of Melbourne finds that more people are using AI at work, despite growing distrust in the technology. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What led to Mark Carney's election victory?
Our old relationship with the United States. A relationship based on steadily increasing integration is over.
Plus, relief in Detroit as we report President Trump plans to soften his auto tariffs. And a new study sheds light on the risks and rewards of AI as it becomes firmly embedded in our lives. It's Tuesday, April 29th. I'm Luke Vargas for The Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today.
Canada's Mark Carney has capped a dramatic electoral turnaround, holding on as the country's prime minister after voters returned his Liberal Party to power for a fourth consecutive term. Carney's party had been headed for defeat earlier this year, before the former central bank chief positioned himself as the best candidate to stand up to President Trump and reshape an economy dependent on U.S.
demand. However, journal reporter Vipal Manga in Ottawa said the road ahead won't be easy.
Chapter 2: What challenges does Canada face after the election?
Canada's economy has been struggling with many of the same trends that the U.S. had been. Rising inflation, cost of living, housing shortages. The problem for Canada under the Trudeau government was also falling productivity and trying to find an engine for growth there.
For an economy whose manufacturing sector wasn't growing very much, had become very much reliant on a resources sector and housing market to propel growth. Those engines were stalling, and it's unclear where more growth is going to come from. Carney, being a realist, basically told Canadians that they should expect more pain. going forward.
And I talked to one analyst who suggested that last night might be the best night of his entire tenure.
U.S. tariffs could heap further economic pressure on Carney, with Canada's auto sector, one of the country's largest employers, pressured to relocate south. That sets up closely watched talks with President Trump, who's repeatedly said that Canada would be better off as America's 51st state.
And while Vipal said that Carney pledged to enter economic and security negotiations with the knowledge that Ottawa has other relationships it can turn to, patching up the relationship with Washington is priority number one.
He fired some sort of warning shot at the U.S. saying that the Canadians are over the shock of American betrayal, as he called it. and have learned the lessons from that betrayal. But he's very clear-eyed about the fact that for all intents and purposes, Canada cannot walk away from the United States. They share a 5,000-mile border with the largest economy in the world.
It makes no sense for Canada to walk away from the U.S., even if it were possible. So I do think that they want to negotiate and Carney wants to negotiate a deal. The framework of that deal, I think, is very much up in the air.
And they're also very conscious of the fact that it's unclear if Trump can be a reliable partner in any deal that they sign, given the fact that the last trade deal they did with Trump himself, the USMCA, is the same deal that he just ripped up when he came into power the second time.
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Chapter 3: How will tariffs affect Canada’s economy?
Despite last night's victory, Carney's liberals are likely to fall short of a parliamentary majority, potentially forcing him to seek help from rival politicians in order to execute his agenda.
Well, speaking of trade, we exclusively report that President Trump is expected to soften his automotive tariffs in an effort to stop carmakers from being hit by overlapping levies, such as duties on steel and aluminum. We report that the policy shift would also be retroactive, allowing companies to be reimbursed for tariffs that they've already paid.
A useful bit of relief for an industry that Journal Auto's reporter Stephen Wilmot told me has been battered by recent trade moves.
The industry certainly has been rattled and we got fresh reports this morning, for example, from Porsche and also Volvo, which are heavily affected by the tariffs because they manufacture predominantly in Europe. Both of them, their shares are off heavily today. We've seen GM and Ford respond appreciatively to the softening of the tariffs from the Trump administration.
It's a very big deal for them if they don't have to pay steel and aluminium tariffs in particular. And it goes along with the logic of the Trump administration so far as they want to reward manufacturing in the US, which is difficult if you have to pay huge tariffs on your inputs. So it's good for GM and Ford. Stellantis, too, which owns Chrysler.
The shares are up in European trading this morning. As for everyone else, it's going to be a range of outcomes. If you're a pure import brand like Porsche, you won't benefit from this concession at all. But if you're a company like Toyota that also manufactures a lot in the U.S., then clearly this is also a big win.
Trump is expected to announce the tariff shift ahead of a rally outside of Detroit this evening. Coming up, even as trust in AI declines, more of us are experimenting with new tools in the workplace, even without the permission of our employers. We have got that story and more after the break.
This is the era of AI. This is the era of KX. KX, survival of the fastest.
Public trust in AI is declining, but that is not stopping people from using it more and more, including for sensitive tasks at work. That's one of the findings of a brand new study of more than 48,000 people conducted across dozens of countries and carried out by the University of Melbourne and KPMG. And here to talk about that study is KPMG's global head of AI, David Rowlands.
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Chapter 4: What changes is Trump making to auto tariffs?
David, trust down, use up. Explain that to me.
The vast majority of people are using it regularly and in the workplace. So 66% of people use it regularly. and people are expecting great things from AI. But at the same time, whilst people are really excited about what AI can do, they're expressing an amount of anxiety and concerns about trusting the technology and trusting what it might do for them.
The other thing is that the report shows that often the way that people are using the technology themselves are creating new risks. So in this example, we expected people to review what the AI is coming out with, But 66% of the time, people are relying on the AI output without evaluating the accuracy. People admit that they've made mistakes.
And over half of employees say that they hide their use of AI from their employers and pass it off as their own work.
I want to get to that point in a second, but there's clearly something here that people find valuable, enjoyable. Is the benefit that people are describing in this study mostly around, I don't know, being more efficient, making more money, saving time? What explains this uptick in use?
Yeah, and it's like no other technology before. It does so many things in so many different situations. It's giving us greater insight. It's driving for greater quality.
KPMG's, for instance, moved its audit capability away from a sample basis of checking to taking on all of the transactions and using the AI to analyze the most likely fraudulent transactions or the ones that need further investigation. That in itself is creating huge amounts of insight for the organizations that we audit. It's driving greater quality. It is driving efficiency.
And when you go beyond that, we know that service interactions enabled by AI are higher quality and can offer greater empathy. And so when you train the AI on specific databases, it becomes expert and it can give you advice. It can recommend your next best action and it becomes a great partner. I use it as a coach.
You know, I get it to ask me questions or to challenge the sorts of things that I'm doing.
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Chapter 5: How is AI being used in the workplace?
This is things like uploading sensitive company information into free AI tools and that they've been relying on AI outputs at work without evaluating the accuracy of those results. These don't sound good.
Chapter 6: What are the implications of declining trust in AI?
The report is an eye-opener. This is a set of 48,000 people creating a cry for help. And I think there has been an underestimation of this topic of how are people going to react? What are their attitudes going to be? What are the tools and capabilities that they need if they're going to use AI safely? There's a crisis of leadership here. And I think that we've underestimated it.
We need to be much clearer about what our expectations are. And then just prosaically, let's put these capabilities in place. Let's make sure that we're protecting the data and that we're cyber secure. Let's make sure that we understand the provenance of the models and that we have good governance over them. Let's make sure that we're giving people all of the skills. But most of all is clarity.
What people are crying out for in this report is, what am I supposed to do with AI? And what are the behaviors that you are expecting? And so the key word here is leadership. And how do you align your organization's direction so that you can articulate what people should and should not do with AI?
David Rowlands, Global Head of AI at KPMG. Thank you so much for being with us on What's News.
Thank you. Thank you very much. I've enjoyed it.
We are exclusively reporting that a group of Wall Street's biggest banks, including Morgan Stanley, Bank of America, and five others, have finally dug themselves out of the $13 billion debt that they lent to Elon Musk for his takeover of Twitter, now X, in 2022. The $1.2 billion of unloved loans sold at 98 cents on the dollar.
Woodside Energy has given the go-ahead to the $17.5 billion development of an LNG gas export project in Louisiana. The Australian company is betting on strong ongoing demand for traditional fuels and the U.S. as a key supplier of natural gas to the global market. This includes customers in Asia and Europe who've been buying U.S. gas to counter dependence on Russia.
In a move to ensure that cancer drugs are available to U.S. consumers, drugmaker Merck is investing in a $1 billion plant in Delaware ahead of potential tariffs targeting the industry. The facility will produce Merck's blockbuster cancer drug Keytruda, which treats lung cancer, melanoma and other tumors and accounts for roughly half of the company's revenue.
And finally, it's going to be another busy day for markets, with a slew of earnings and data out later this morning. Finance editor Alex Frangos says these are the first economic readings following Trump's tariff announcements and will be closely watched for any indications of a U.S. downturn.
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