Carney Brushes Off Lutnick’s Take On What Killed Trade Talks

Prime Minister Mark Carney says there’s little value in Commerce Secretary Howard Lutnick’s claims about why Canada walked away from trade negotiations.

Trump Cabinet members have launched coordinated attacks portraying Carney as a villain who rejected a deal for political reasons — to appease separatist movements in Alberta and Quebec ahead of key votes next month.

“I don’t think, with all respect, appointed, unelected Cabinet members in the United States are experts on Canadian politics,” Carney told reporters Thursday in Thunder Bay, Ontario.

Carney, who urged the U.S. to “stop trying to be tough and start being serious” this week, said it was the Americans’ “our way or the highway, take it or leave it” attitude that made it clear the Trump administration wasn’t going to move on issues Ottawa viewed as red lines.

“We’re ready to sit down and strike that deal when the Americans are ready,” he said Thursday.

Shortly after, President Donald Trump took a swing at Carney on social media — one day after calling the Canadian leader a “nice guy” in the Oval Office.

“It is very good for Canadian Politicians like Prime Minister Carney to make President Donald J. Trump ‘the enemy,’ until their Economy collapses, then it will prove to be very bad for Politics — Worse than anything that has ever happened to a Canadian Politician. Just watch!”

Lutnick told CNBC “Squawk Box” host Joe Kernen on Wednesday that Canadian negotiators added “crazy ideas to the mix” during the final stretch of negotiations. The administration is facing pushback from House Republicans on the benefits of an escalating trade war with Canada as the White House seeks affordability wins ahead of midterms.

Lutnick accused Ottawa of designing an off-ramp to get out of talks, revealing an exchange with an unnamed Canadian minister that he interpreted as a new directive from the top.

“I said to one of the ministers, ‘Are you actually trying to blow this up?’” Lutnick said. “And his answer to me was, ‘I’m not allowed to say that.’ And they blew it up for political reasons only.”

A spokesperson for Canada-U.S. Trade Minister Dominic LeBlanc, who was in Washington when negotiations collapsed, would not address Lutnick’s comment when asked whether the exchange happened as described.

“Canada is prepared to resume discussions provided the United States respects Canadian sovereignty, Canadian culture and Canada’s key industries,” said LeBlanc’s spokesperson Gabriel Brunet. “But we are not waiting for that scenario to materialize.”

The trade war between Washington and Ottawa escalated after the collapse of bilateral trade talks last month. Negotiations had intensified in July after Trump threatened to inflict Section 338 tariffs, claiming “Canadian discrimination” over Ottawa’s retaliatory auto duties, provincial bans on U.S. booze and grievances over dairy policies.

Efforts to keep those tariffs from coming into force initially looked promising with Trump announcing a tentative deal, but both sides blamed each other for making too many last-minute asks that deviated too far from terms that were initially agreed on.

Canadian negotiators accused the U.S. side of making a bait-and-switch on autos and said they were surprised while reviewing the text in the drafting room that the Trump administration had pulled medium- and heavy-duty trucks out from eligibility on an agreed-on lower tariff rate.

Lutnick has maintained that at the last minute Canada demanded that trucks receive the same tariff relief as passenger and light-duty vehicles. Canadian negotiators said they’d been flagging the issue as a nonnegotiable since talks intensified in July.

Chief U.S. trade negotiator Janice Charette told POLITICO that another red line was a concept floated by U.S. Trade Representative Jamieson Greer to have future Canadian free-trade agreements fall in line with the Trump administration’s policies.

“It wasn’t clear whether what the U.S. was asking for was a consultation on future trade agreements, a ban on free-trade agreements, a veto on free-trade agreements,” Charette said in an interview. Greer later told POLITICO the words “ban” or “veto” were not used.

Greer has raised concerns about the transshipment of Chinese steel through countries Canada is seeking new free-trade deals with, like the Association of Southeast Asian Nations. But the concept, which was not formalized in text, alarmed the Canadian side, which considers the issue a matter of sovereignty.

“If a country wants to have favorable tariff treatment by the United States, in terms of all these sectors that we’re trying to protect, we expect other other countries to protect them in an equally effective kind of way,” he said.

The new tariffs went into effect Aug. 22. Canada has since released a list of tit-for-tat retaliatory tariffs of up to 50 percent, targeting 30 percent of exports from 9 states with competitive Senate races, to come into force Sept. 8.

The sides are currently not talking or making an effort to stop Canada's countertariffs — a threat Trump Cabinet members have met with a shrug, focused instead on making the argument that the American economy is too big for Canada’s measures to have any impact.