In a week in which US President Donald Trump again roiled markets by threatening major tariff hikes on China, Canadian Prime Minister Carney left an Oval Office meeting empty-handed, with no trade deal in sight.

Despite this, Trump praised Carney, in a sign that measures taken to appease the President, from Canada’s holding off on many retaliatory tariffs, to ramping up border security measures, are having the intended effect as negotiations play out.

— William D.

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The Globe and Mail: Industry Minister Mélanie Joly unveiled a three-point industrial plan to counter Trump’s tariffs.

YF: Bank of Canada deputy governor Carolyn Rogers urged more banking competition to boost productivity and cushion Canada from US trade shocks.

Bloomberg: Trump’s lumber tariffs will soon take effect. Here’s who could see the sharpest impact.

IE: Algoma Steel $ALC.TSX ( ▲ 1.74% ) will receive $500M in federal and provincial loans to offset US tariffs and shift toward electric arc furnace production.

BNN Bloomberg: A Nanos poll found 80% of Canadians believe boycotting US goods or travel would help strengthen Canada’s trade position.

After inking the Stargate deal with the UK government to build data centers that would expand the country’s processing power by at least twentyfold, OpenAI is turning to Canada as the next frontier for power generation that the global AI revolution desperately needs.

With both Canada’s government and private sector investing in AI infrastructure, OpenAI has found willing partners in their bid to open up the Canadian market.

Of course, it’s not just OpenAI. Other tech giants are anxious to ramp up their computing capacities, with Alphabet $GOOGL ( ▲ 0.53% ) investing $67 billion in new AI infrastructure over the last year, while Amazon $AMZN ( ▼ 1.67% ) poured $104 billion into powering its AI systems.

The International Energy Agency projects that AI data centers will consume more energy by 2030 than the entire nation of Japan. Needless to say, the race to meet AI’s vast energy needs is on.

As the world’s second-largest producer of uranium, with the third-biggest proven oil reserves and vast natural gas deposits to boot, this presents a historic opportunity for Canada to become a true “energy superpower” — in line with PM Carney’s stated goal and the global AI revolution writ large.

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Canadian defense stocks are outperforming the Toronto Stock Exchange this year.

Bombardier $BBD.A.TSX ( ▲ 2.14% ) shares are up nearly 100% year-to-date, compared to roughly 20% for the TSX Composite. Elsewhere, the Mount Pearl-based Kraken Robotics $KRKNF ( ▼ 5.5% ) is up over 110%.

And with Carney’s plans to take Canadian military spending to 2% of annual GDP, up from 1.4% currently, some analysts see an ongoing tailwind for defense stocks.

Canada’s target of spending 2% of GDP on defense this fiscal year is already coming five years earlier than promised. But it’s also agreed to NATO’s new defense investment pledge of 5% GDP spending by 2035.

That’s already been good news for Canadian defense stocks. But according to Victor Kuntzevitsky, a portfolio manager at Stonehaven, Wellington-Altus Private Counsel, the materials sector could be the biggest beneficiary, as Canada turns to its vast resources to fuel the military and industrial complex.

The TSX Capped Materials Index has surged as high as 75% in recent months.

It’s no coincidence that this turn to military spending — and fast-tracking of mining and energy infrastructure projects — comes as Carney tries to win Trump’s favor ahead of a possible trade deal breakthrough.

But the possibility of a breakdown in talks derailing this agenda has some investors taking a “wait and see” approach towards an economic transformation that will take years (not to mention sustained political willpower) to fully materialize.

Which stock do you think will outperform over the next 12 months?

▇▇▇▇▇▇ Tourmaline Oil $TOU.TSX ( ▼ 0.05% )

▇▇▇▇▇▇ Canadian National Resources $CNQ ( ▼ 2.12% )