US commerce secretary Howard Lutnick has criticised Canada within the lead-up to tense commerce talks, calling the US-Mexico-Canada Settlement a “dangerous deal” that must be reworked.
Lutnick stated President Donald Trump thought the USMCA “must be reconsidered and reimagined accurately” when new negotiations start in July.
Talking in Washington at a Semafor media occasion, Lutnick stated reviews that Canada was slowing down commerce talks with the US “is just like the worst technique I’ve ever heard. They suck.” Trump signed the 2020 commerce deal throughout his first time period to interchange Nafta.
“[Prime Minister Mark] Carney has an issue with us,” he stated.
A commerce division spokesperson stated Lutnick had been misquoted.
“Secretary Lutnick, describing our unfair commerce imbalance with Canada, defined how Canada sucks off of our $30tn financial system,” the spokesperson stated.
Relations between Canada and the US have deteriorated since Trump launched a commerce warfare shortly after retaking energy in January 2025. The Canadian client boycott launched in response is costing the US greater than $1bn each month in misplaced items commerce alone.
Trump has known as Canada the “51st state” of the US and imposed punitive tariffs on its closest ally, sparking a quiet revolt that has included “made in Canada” store indicators, “Canada isn’t on the market” hats and provincial governments slicing contracts with Elon Musk’s Starlink.
Consequently, Canadian journey numbers have plummeted by 1 / 4 whereas American merchandise, particularly alcohol, are now not offered in most government-run shops.
Kenneth Frankel, president of the Canadian Council for the Americas, stated US authorities officers had expressed issues over the boycotts however there was little they might do about it.
“Canadian shoppers are selecting and feeling empowered by their decisions,” he stated, including that “it might irritate the US authorities, however provincial officers are responding to common sentiment”.
Carney has led the cost with a collection of “Purchase Canada” procurement insurance policies geared toward lowering the nation’s reliance on US suppliers, particularly in defence.
US items exports to Canada totalled $336.5bn in 2025, down 3.8 per cent or $13.4bn, from 2024, the US Commerce Consultant reported on the finish of March.
Canada is the highest supply of worldwide guests to the US, with 20.4mn visits in 2024, producing $20.5bn in spending, in keeping with the US journey affiliation. However these numbers have been declining since Trump got here to energy.
The Royal Financial institution of Canada reported this month that Canadians coming back from the US shrank 25 per cent yr over yr in 2025, with elevated journey inside Canada in addition to to non-US locations.
“Restricted retaliatory measures minimised the affect of the commerce warfare on client costs in Canada, however client behaviour, notably in journey, was nonetheless considerably impacted,” it stated.
Michael Pearce of Oxford Economics stated: “Tourism receipts fell to US$17.1bn from $21.8bn, so a US$4.7bn hit versus a world through which tourism was in step with patterns from the remainder of the world.”
A Centre for Financial Coverage Analysis report launched final month stated main vacationer locations corresponding to Las Vegas or Miami have been in a position to offset the shock by attracting extra home guests.
“[But] much less distinguished locations corresponding to communities alongside the US-Canada border might have much less capability to take action,” it states.
Mark Fisk, the Michigan Good Commerce Alliance spokesperson, stated Canada’s boycott had “clearly been dangerous” to the US state’s financial system, which shares a border with Ontario.
“Diminished Canadian visitors and guests is hurting enterprise and revenues,” he stated.
The Liquor Management Board of Ontario, one of many world’s largest patrons and retailers of alcohol, estimated that annual gross sales of US merchandise have been C$965mn ($705mn) earlier than Ontario Premier Doug Ford stopped the commerce in March final yr.
“We have now been clear, till tariffs are eliminated, US alcohol will stay off cabinets,” Ford stated in a press release to the FT.
The “Toasts Not Tariffs Coalition”, which represents the American alcohol sector with ties to the hospitality trade, is lobbying the White Home to drop its commerce warfare.
In an April 15 letter to US Commerce Consultant Jamieson Greer, the coalition wrote that Canada’s ban on US wine induced an unprecedented drop in exports of about 81 per cent whereas spirits suffered a 63 per cent decline, or $149mn, drop in gross sales final yr.
“The numerous injury to US alcohol manufacturers in Canada brought on by this commerce dispute can have lasting damaging impacts on US producers,” it states.
In a single yr, the wine commerce surplus with Canada went from $254mn to a $90mn commerce deficit, the letter states.
“The US continues to boost critical issues concerning these actions and to press Canada” to carry the bans as they “enormously hamper exports”, the USTR stated.
