U.S. Commerce Secretary Howard Lutnick takes a swipe at Canada's trade strategy ahead of review
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U.S. Commerce Secretary Howard Lutnick criticized the current version of North America’s free trade agreement on Friday, calling it a bad deal and taking aim at Canada’s trade strategy ahead of upcoming negotiations.
Speaking at a conference hosted by the media outlet Semafor, Lutnick said U.S. President Donald Trump believes the U.S.-Mexico-Canada Agreement (CUSMA), which he negotiated during his first term, is a “bad deal” that he might let “lapse” before the renegotiation deadline in July.
“I think it needs to be reimagined and needs to be readdressed,” Lutnick said of the trade pact. “There’s plenty of good in it, but there’s a huge amount of bad in it and needs to be reconsidered for the benefit of America.”
U.S. Commerce Secretary Howard Lutnick blasted Canada’s trade strategy on Friday, saying Prime Minister Mark Carney ‘has a problem with us’ and mocking Carney’s recent trade visit to China. The journalist who asked Lutnick about Canadian trade, Semafor editor-in-chief Ben Smith, weighed in on Power & Politics.
The secretary also responded to a suggestion from Canada’s former trade negotiator that time is on Canada’s side during trade talks because, in his view, political pressure on the U.S. president will only intensify the longer the economy remains as it is.
“That is, like, the worst strategy I’ve ever heard. They suck, they — look, we are a $30-trillion economy, right?,” Lutnick said. He then pivoted to blast Ottawa’s trade partnership with China.
“[Prime Minister Mark] Carney has a problem with us. He gets on a plane and he goes to China,” Lutnick said. “Does he think the Chinese economy is going to buy his stuff?” China is entirely an export-driven economy, right? So what do you do? He came back and said, ‘Oh, we’ll take their electric cars.’ I mean, is this nuts?”
In a statement to CBC News, a U.S. Commerce Department spokesperson said Lutnick’s “they suck” comment referred to the trade imbalance between the two countries, not Canada’s negotiation strategy.
“Secretary Lutnick, describing our unfair trade imbalance with Canada, explained how Canada sucks off of our $30T economy.”
Later, the journalist who interviewed Lutnick at the conference said he believed the secretary’s disparaging remarks reflected “frustration” at the White House rather than a deliberate negotiating strategy.
“I think what he said was not some sort of strategic posturing. [I think it] represented real frustration in Washington that the Canadians are not doing what they want when, in the U.S.’s view, it is overwhelmingly obvious that the Canadians don’t have many cards not to do what they want,” Semafor editor-in-chief Ben Smith told CBC News in an interview.
The U.S. and Canada held trade talks in Washington earlier this month, and a review of the CUSMA free trade agreement is scheduled for July. CBC’s Mike Crawley explains what leverage Canadian negotiators may have.
Carney’s office declined comment on Lutnick’s remarks, which were not the first critical comments from members of the Trump administration involved in trade.
Canada, Mexico and the United States are required to review CUSMA by July 1. The timing means Canada’s efforts to have punishing tariffs lifted on key industrial sectors will factor into the renegotiations.
Earlier this month, U.S. Trade Representative Jamieson Greer said the administration would try to resolve as many pain points as possible, but warned he does not expect all of the issues to be addressed by the deadline.
Before Trump launched his trade war, roughly 76 per cent of Canada’s exported goods went to the United States, while just 17 per cent of U.S. exported goods were sent to Canada.
Despite that imbalance, experts have said Canada has some negotiating leverage in its effort to eliminate U.S. tariffs, including crude oil, critical minerals and foreign direct investment by pension funds.