U.S. Treasury Secretary Scott Bessent escalated his war of words with Canadian Prime Minister Mark Carney on Wednesday, urging the former central banker to “do what he thinks is best for the Canadian people, not his own virtue signaling,” as he recounted a tense post-Davos exchange, with fallout mounting from Carney’s remarkable speech at the World Economic Forum meeting about a “rupture” in the world order.
Speaking in Washington, D.C., with CNBC’s Sara Eisen in a Squawk on the Street interview on the sidelines of the administration’s Trump Accounts Summit, Bessent said he was a participant on the follow-up call after Davos between Carney and President Donald Trump. This talk has been portrayed very differently in Ottawa and Washington, with Carney suggesting he “dug in” and reinforced his message to Trump, while Bessent contends the Canadian leader “walked back” what he said onstage in Davos.
“I was on the call,” Bessent said, before launching into an unusually personal critique of Carney’s political pivot from technocrat to elected leader. “In my investment career, I’ve seen what happens when a technocrat tries to pivot and become a politician—never really works out well.”
Carney rolled his eyes in Ottawa when presented with Bessent’s remarks and bluntly declared: “To be absolutely clear, and I said this to the president, I meant what I said in Davos,” he told reporters en route to a cabinet meeting. “Canada was the first country to understand the change in U.S. trade policy that [Trump] initiated, and we’re responding to that.” He said he also explained Canada’s arrangement with China to Trump, that it’s striking 12 new deals over four continents in six months, and that Trump “was impressed.”
‘Virtue signaling’ and USMCA warning
Bessent framed Carney’s posture toward Trump as more about branding than national interest, accusing the prime minister of rising to power on “an anti-American, anti-Trump message” that could backfire with the United States–Mexico–Canada Agreement (USMCA) up for renegotiation. “That’s not a great place to be when you’re negotiating with an economy that is multiple [times] larger than you are and your big, biggest trading partner. In the end, I think we will end up in a good place, may not be a straight line.”
Bessent threw in a sharper warning, too: “I would not pick a fight going into USMCA to score some cheap political points. Either you are working for your own political career or you’re working for the Canadian people.” Carney, of course, ran and won on a platform that was openly critical of Trump-style politics, so reiterating that stance is more akin to him following a democratic mandate by doing what he told voters he would do.
Bessent’s comments underscore Washington’s view that Ottawa has far more to lose if political theater around Trump overshadows the hard math of cross-border commerce. By emphasizing the size gap between the two economies and Canada’s reliance on U.S. market access, he signaled any deterioration in personal or political relations could show up quickly at the negotiating table.
His remarks also link the Davos dustup to a broader critique of allied leaders Bessent sees as prioritizing image over outcomes, echoing his separate attack on European governments for, in his telling, putting trade and cheap Russian energy ahead of ending the war in Ukraine. That pattern, Bessent suggested, leaves U.S. partners exposed when the United States is prepared to wield tariffs and market access as leverage.
The day after Bessent’s remarks—and Carney’s response—there was another bit of either virtue signaling or standing up to America, depending on one’s perspective. German Chancellor Friedrich Merz hailed the EU in a speech to his national parliament as an “alternative to imperialism and autocracy,” while defending Germany’s record against criticisms from Trump it has not lived up to its NATO commitments by fighting alongside the U.S. often enough. Noting 59 German troops died in Afghanistan during the country’s nearly 20-year deployment, he offered an indirect response to a recent Trump interview when the U.S. president said the other 31 nations in NATO stayed “a little off the front lines” in Afghanistan. As Merz put it, “We will not allow this deployment, which we also performed in the interest of our ally, the United States of America, to be disparaged and demeaned today.”
Domestic politics on both sides
For Carney, who has built his political brand partly in contrast to Trump, the clash presents a dilemma: continuing to project distance from the U.S. president may play well with segments of the Canadian electorate, but Bessent is betting that strategy will look less sustainable once USMCA talks begin in earnest. His language—“cheap political points,” “virtue signaling”—was aimed squarely at portraying Carney as more focused on optics than on securing the best economic deal for Canada.
Bessent, for his part, cast Trump as willing to use U.S. economic heft unapologetically, from tariffs on South Korea over a stalled trade ratification to public frustration with Europe and India over Russian oil. Against that backdrop, his message to Ottawa was blunt: The Davos drama may be good politics at home, but in the coming trade talks, the U.S. intends to remember who picked the fight.
