Communications Breakdown

Deep dive from the NYT on the US-Canada negotiations:

As word leaked last week that the United States would reduce its tariffs on Canadian steel and aluminum, U.S. companies lobbied the Commerce Department and the White House to preserve their protections. Mr. Lutnick intervened on their behalf, including suggesting that only a certain volume of aluminum be subject to lower tariff rates.

After spending several days in negotiations, Mr. LeBlanc flew home to Ottawa on Wednesday afternoon. But early the next morning, he urgently returned to Washington, as did Marc-André Blanchard, Mr. Carney’s chief of staff.

Neither was scheduled to be in Washington that day, according to two people familiar with the events. They were rushing back because of Mr. Lutnick’s intervention.

Mr. Lutnick also insisted that tariffs not be lowered for heavy trucks, as they would be for cars. And Canada, which produces the GM Silverado and Ford F-350 and F-450 in Ontario, insisted this was a red line.

Mr. Lutnick’s interventions caused frustration inside the trade office, which had been in talks with the Canadians for weeks, one person close to the office said. The person said that Mr. Greer did not disagree with Mr. Lutnick substantively, but he did not think the Canadians would accept the proposals…

For Canadians, Mr. Lutnick was already something of a villain. Though he is friendly enough to exchange text messages with Mr. Carney, he has offended many Canadians, including intervening to block the opening of a new Canada-U.S. bridge and saying that Canadian officials “suck” during an event in Washington in April.

Mr. Lutnick had also made clear that his goal was moving auto production out of Canada into the United States. Speaking virtually at a U.S.-Canada summit late last year, Mr. Lutnick told a Canadian audience that the United States was no longer interested in buying Canadian-made cars.

Seems clear that Lutnick is in fact the big villain here. But I don’t know how you come to an agreement when this is a core US demand:

The Canadians also pressed the United States for a level of certainty that the deal would not be scrapped overnight by the Trump administration. But the United States maintained that it would retain the power to change tariff policy against Canada at any time, irrespective of the agreement, officials said. Mr. Carney would say in his seething Saturday address to Canadians: Sometimes, the United States signature is “written in pencil.”