Overview
- Treasury Secretary Scott Bessent said he joined the post-Davos call with President Trump, accused Prime Minister Mark Carney of virtue signaling and walking back his remarks, and warned against picking a fight before the USMCA review.
- Carney rejected Bessent’s account, said he meant what he said in Davos, highlighted 12 new accords, detailed a limited China arrangement that cuts EV tariffs to 6.1% with import caps and reduces Chinese duties on Canadian canola, and said he expects U.S. respect for Canadian sovereignty.
- Trump has threatened a 100% tariff on Canada over its China deal and has repeatedly floated tariffs on allies, including a Greenland-related threat later dropped after a framework understanding with NATO’s Mark Rutte.
- Economists and analysts say partners are accelerating de-risking through EU–India and EU–Mercosur trade deals and supply-chain shifts, with Paul Krugman arguing U.S. intimidation is pushing a global “divorce” that will make Americans poorer.
- U.S. partners are also reopening channels with Beijing as a hedge, with experts cautioning that deeper Chinese leverage could complicate coordination on export controls, sanctions, and security issues.