By Paul Vieira
OTTAWA--Canadian Prime Minister Mark Carney called on the country's citizens to redouble their efforts to rebuild an economy and seek out new markets amid a changing relationship with a protectionist United States.
In remarks Thursday in Quebec City, Carney reiterated the challenges ahead as the U.S. embarks on a starkly different trade and foreign direction relative to decades past. Canadian economic activity remains tepid, as businesses and households curb spending plans until there is greater certainty in the U.S.-Canada trade relationship. The U.S.-Mexico-Canada trade treaty, or USMCA, is up for renegotiation later this year, and that pact allows about 80% of imports from Canada to arrive duty free.
"Canada and the United States have built a remarkable partnership in the economy, in security, and in a rich cultural exchange," Carney said in a speech prior to a cabinet retreat. "But Canada doesn't live because of the United States. Canada thrives because we are Canadian."
This passage was likely in response to President Trump, who took a swipe at Carney over the Canadian leader's speech at the World Economic Forum in Davos, Switzerland. Carney told attendees in Davos that middle powers need to work collectively to counter the threat posed by so-called hegemons that increasingly use economic coercion as a weapon. Carney's speech neither identified the U.S. nor China.
"Canada gets a lot of freebies from us," Trump said in Davos, the day after Carney's remarks. "Canada lives because of the United States. Remember that Mark the next time you make your statements."
Carney said Thursday that Canadians are living in a "time of great consequence," and they are choosing "to work together to build one Canadian economy. We've made great progress over the past year. Now we have to redouble our efforts."
Carney added that Canada "can't solve all the world's problems, but we can show that another way is possible - that the arc of history isn't destined to be warped towards authoritarianism and exclusion."
Earlier Thursday, U.S. Commerce Secretary Howard Lutnick said Canada had the second-best trade deal in the world with the U.S., after Mexico. Instead, Lutnick told Bloomberg News, Carney chooses to "whine and complain."
Lutnick also warned that Canada's eagerness to deepen trade ties with China would not sit well with Trump when USMCA is formally renegotiated later this year. Canada will have to choose between doing business with the U.S. or China, he said.
Last week, Carney struck an agreement with Chinese leader Xi Jinping that resolved outstanding trade irritants between the two countries, dealing with electric vehicles and agrifood products, with promises of increased Chinese investment in Canadian manufacturing.
Write to Paul Vieira at paul.vieira@wsj.com
(END) Dow Jones Newswires
01-22-26 1529ET
