Howard Lutnick, the U.S. Minister of Commerce, blamed the collapse of U.S.-Canada trade talks on Canadian Prime Minister Mark Carney's political calculations. He argued that Canada intentionally derailed the deal by adding unreasonable demands at the last minute.
According to a compilation of Bloomberg reports on the 27th (local time), Minister Lutnick told reporters in Washington on the 27th that "Prime Minister Carney broke the deal with an eye on domestic elections." Minister Lutnick said Carney intentionally clashed with the United States to rally internal support ahead of Alberta's preliminary independence vote and Quebec's elections in Oct.
In this round of talks, the United States and Canada clashed most sharply over easing tariffs on medium- and heavy-duty trucks. Canada, seeking to protect its auto plants, demanded the same tariff cuts for medium- and heavy-duty trucks as for passenger cars, but the United States firmly rejected the demand.
Minister Lutnick claimed the medium- and heavy-duty truck issue surfaced for the first time at 4 p.m. on the 21st, just before the talks collapsed. He told Bloomberg that "the words 'medium- and heavy-duty trucks' were raised only at the very end of the trade talks," adding, "They forced it in to end the talks." Canadian officials countered directly, saying, "We have consistently called for tariff relief for weeks." The Canadian side also cited differences between the U.S. draft text and the oral agreement as a reason for the breakdown.
Lutnick then escalated his criticism, saying "Canada thoroughly takes advantage of the United States." He told Bloomberg, "The United States is simply being used. That's why the talks ended," and "It wasn't the numbers that blocked a deal. The numbers were fantastic, and it was an excellent transaction." Bloomberg reported that Minister Lutnick pushed hard to scrap the agreement, saying the terms were overly favorable to Canada.
After the trade talks fell apart, the two countries launched a full-blown trade war. The Trump administration imposed a 50% tariff on $20 billion worth of Canadian exports immediately after the collapse. Canada will also implement retaliatory tariffs starting on the 8th of next month.
On top of that, relations between the two countries froze to their worst point as President Trump on the 27th signed an executive order unilaterally renaming Lake Ontario on the border to Lake America. With brinkmanship continuing, some say Prime Minister Carney has effectively lost the political room to reopen talks.