Tensions Rise Over USMCA Trade Deal Standoff

Treasury Secretary Scott Bessent cautioned Canadian Prime Minister Mark Carney regarding his criticisms of US trade policy, which could impact USMCA negotiations. Tensions heightened after Carney's Davos speech, and Trump's tariff threats intensified the dispute. Despite differences, Bessent remains optimistic about reaching a favorable outcome.

Treasury Secretary Scott Bessent issued a warning to Canadian Prime Minister Mark Carney on Wednesday over his public remarks criticizing US trade policy. These comments, made during a high-profile speech at the World Economic Forum in Davos, Switzerland, may jeopardize the impending review of the US-Mexico-Canada Agreement (USMCA).

The agreement, designed to shield Canada from the harshest effects of then-President Trump's tariffs, has come under scrutiny after Trump's threat to impose a 100 per cent tariff on Canadian imports. Carney's pursuit of a separate trade deal with Beijing further complicated relations, leading to a sharp exchange with Trump and Bessent.

During a CNBC interview, Bessent advised against using the USMCA review to gain political leverage, cautioning Carney about the risks of transitioning from a technocratic to a political role. Despite the differences, Bessent expressed confidence on Fox News that an agreement would be reached, albeit not without challenges.

(With inputs from agencies.)