Carney Reaffirms Davos Critique as US Official Claims Retraction; Trade Frictions Intensify

Mark Carney publicly rejected accounts that he had retracted criticisms he made at Davos, telling reporters he conveyed the same position in a later telephone call with the US president and describing the exchange as constructive. The dispute began when a US Treasury source told a broadcaster that Carney had walked back parts of his speech; Carney countered that characterisation and emphasised he stood by his remarks. Trade issues were a primary focus of the call, amid broader discussion of security topics including Ukraine, Venezuela and Arctic cooperation. The flashpoint for the recent diplomatic heat is a compact between Ottawa and Beijing that trims duties on select agricultural products — most notably canola — and eases levies on a subset of Chinese electric vehicles. Canada has framed the arrangement as targeted and limited rather than a sweeping free-trade deal that would automatically trigger formal USMCA notification and consultation. Washington responded publicly and sharply: the US President warned of the possibility of 100% tariffs on Canadian goods if the compact proceeded without restrictions, a remark later qualified by US economic officials who said punitive action would be aimed at dumping or other market-distorting behaviour. Beijing has described the agreement in pragmatic commercial terms, while Ottawa has stressed transparency with US counterparts and adherence to trilateral procedures where relevant. The episode has fed a larger Canadian push to diversify markets, with Ottawa signalling accelerated trade outreach and an ambition to boost exports beyond the United States over the coming years. For exporters the near-term effects are tangible: changes to canola duties and reduced levies on a limited number of EV imports will alter price dynamics and supply-chain calculations. Diplomacy and procedural mechanisms under USMCA — including notification and review — are likely to determine whether heated rhetoric becomes formal trade action. Markets and firms in affected sectors should monitor follow-up technical consultations, public statements from US economic agencies, and any formal USMCA steps that could precede remedies. Overall, the episode shows how high-level bilateral exchanges and public messaging are being used as leverage ahead of formal negotiations, raising the probability of sector-specific disruption if disputes are not managed through established processes.