Carney Fires Back at Lutnick's 'Unelected' Label as Trump Threatens Canada's Economy Will 'Collapse'

Since trade negotiations collapsed on Aug. 21 and Washington's 50% tariffs on roughly $20 billion of Canadian goods took effect, the two governments have been trading barbs instead of proposals. Canada's own retaliatory tariffs on an equivalent dollar amount of U.S. goods are set to take effect Sept. 8.

On Thursday, Prime Minister Mark Carney held a press conference in Thunder Bay, Ontario, and was asked about Commerce Secretary Howard Lutnick's claim, made a day earlier on CNBC's "Squawk Box," that Canada "blew up" a nearly finished deal for domestic political reasons.

"I don't think, with all respect, appointed, unelected cabinet members in the United States are experts on Canadian politics," Carney told reporters, according to CNBC and confirmed by Al Jazeera, CBC and Barrie 360.

Lutnick had told Bloomberg News he asked his Canadian counterpart directly whether Ottawa was trying to blow up the deal on purpose, and claimed the response was, "I'm not allowed to say that," according to Barrie 360. Lutnick argued Canada would come back to the table "after mid-October" once its byelections were finished, per CNBC.

Carney didn't deny politics played a role in the timing of anything. He disputed the substance of Lutnick's account entirely. He said U.S. negotiators held firm on "red lines" — no flexibility on rules affecting Canada's ability to sign trade deals with other countries, its French-language protections, or terms governing the auto industry — right up until talks broke down, then suddenly stopped caring about those same issues once talks were public. "If they didn't care, they shouldn't have kept them in the deal," Carney said, per CBC.

Trump wasn't in a conciliatory mood after Carney's remarks. "It is very good for Canadian Politicians like Prime Minister Carney to make President Donald J. Trump 'the enemy,' until their Economy collapses," Trump posted on Truth Social, adding it would prove "very bad for Politics — Worse than anything that has ever happened to a Canadian Politician. Just watch!"

The Memes Are Part of the Fight Now, Too

Earlier in the week, Carney had complained that U.S. officials were treating the standoff like a joke. "When the Americans stop doing memes, stop throwing shade, stop trying to be tough and start being serious about having those discussions, we can have those discussions," Carney said, according to both Breitbart and Fox News.

He was referring to Trump's executive order renaming Lake Ontario "Lake America," Treasury Secretary Scott Bessent's crack that Canada would need "two submarines from the Edmonton Mall" to fight a real trade war, and War Secretary Pete Hegseth's social media post about Canadian cadets that drew nearly 10 million views on X. Carney called the mockery "beneath their office."

The Substantive Dispute Nobody's Resolved

Both sides agree tariffs on medium- and heavy-duty trucks were a late sticking point. The U.S. side, per Barrie 360, says Canadian negotiators raised the truck-tariff issue late as a pretext to kill the deal. Carney's side says relief on those tariffs was on the table from the start.

Lutnick's theory that Canada is stalling until after byelections clear the political runway is a reasonable read if you think a government would rather blame Washington than compromise before a vote. But the theory runs into a wrinkle: Breitbart reported that three Canadian byelections had already been decided, with Carney's Liberals holding two seats and flipping a third from the Conservatives, before Lutnick's mid-October comment. If Carney needed elections behind him to negotiate freely, some of that political cover already existed days before Lutnick made the claim on air. Neither side has offered documentation resolving which account of the final hours is accurate. It remains one side's word against the other's.

Columnist Victor Davis Hanson, writing for Daily Signal, argued the dispute goes deeper than any single negotiating session. He pointed to Canada's roughly $50 billion to $70 billion annual trade surplus with the U.S. and what he called Ottawa's failure to consistently meet NATO's 2% defense spending target as the real backdrop to Trump's push for symmetry.

What's Actually Moving

While the war of words continued, Carney used the same Thunder Bay appearance to announce a $4.7 billion contract with Alstom's Thunder Bay plant to build passenger rail cars for VIA Rail. Barrie 360 noted that VIA's cars used to be built in the United States. They won't be anymore. It's a small but concrete data point in a relationship where both governments are increasingly building around each other rather than with each other.

Canada's retaliatory tariffs take effect Sept. 8. No new negotiating session between Ottawa and Washington has been scheduled.