US Commerce Secretary Howard Lutnick looks at Canada’s trade strategy ahead of renegotiations.
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US Commerce Secretary Howard Lutnick criticized the current version of the North American Free Trade Agreement on Friday, calling it a bad deal and targeting Canada’s trade strategy ahead of future negotiations.
Speaking at a conference organized by the Semafor news agency, Lutnick said that US President Donald Trump believes that the US-Mexico-Canada Agreement (CUSMA), which he negotiated during his first term, is a “bad deal” that he may allow to “expire” before the deadline for renegotiations in July.
“I think it needs to be considered and it needs to be worked out,” Lutnick said of the trade deal. “There’s a lot of good in it, but there’s a lot of bad in it and it needs to be re-examined for the good of America.”
US 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. A reporter 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 a former Canadian trade negotiator that time is on Canada’s side during trade negotiations because, in his opinion, political pressure on the US president will only intensify if the economy remains as it is.
“That’s, like, the worst strategy I’ve ever heard. They’re asking, they – look, we’re a $30-trillion economy, right? “said Lutnick. He then tried to blow up Ottawa’s trade relationship with China.
“[Prime Minister Mark] Carney has a problem with us. He gets on a plane and goes to China,” Lutnick said. “Do you think the Chinese economy is going to buy his stuff?” China is an export-driven economy, right? So what do you do? He came back and said, ‘Oh, we’re going to take their electric cars.’ I mean, is this a mistake?”
In a statement to CBC News, a A spokesperson for the US Department of Commerce said Lutnick’s comments were “sucking” in reference to the trade imbalance between the two countries, not Canada’s negotiating strategy.
“Secretary Lutnick, explaining our trade imbalance with Canada, explained how Canada is absorbing $30T of our economy.”
Later, a reporter who interviewed Lutnick at the conference said he believed the secretary’s disparaging remarks reflected “frustration” in the White House rather than a deliberate negotiating tactic.
“I think what he said wasn’t some kind of strategic sending. [I think it] It represents a real frustration in Washington that Canadians aren’t doing what they want when, from the US perspective, it’s very clear that Canadians don’t have a lot of cards for not doing what they want,” Semafor editor-in-chief Ben Smith told CBC News in an interview.
The US 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 benefits Canadian interviewers can have.
Carney’s office declined to comment on Lutnick’s comments, 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 update CUSMA by July 1. Time means that Canada’s efforts to increase punitive tariffs on key industrial sectors will include renegotiations.
Earlier this month, US Trade Representative Jamieson Greer he said the administration will try to solve as many problems as possible, but warned that he does not expect all problems to be solved by the deadline.
Before Trump launched his trade war, almost 76%. of goods Canada exports to the United States, while 17%. of goods sent to the US were sent to Canada.
Despite that imbalance, experts say Canada has bargaining power in its bid to end U.S. tariffs, including on crude oil, precious minerals and foreign direct investment through pension funds.
