The funniest thing about the ongoing trade war with Canada isn’t that President Donald Trump renamed Lake Ontario “Lake America.” The funniest part is actually that Canada apparently believes it can go toe-to-toe with the United States. Who does it think it's kidding? Sure, it’s entertaining to watch this play out, but what exactly is Canada trying to accomplish here?
Treasury Secretary Scott Bessent didn't hold back Monday. Sitting down with CNBC, he dismissed any notion that Canada can respond in kind to U.S. tariffs, delivering the message in the sarcastic tone that's become his calling card.
CNBC's Sara Eisen asked Bessent, "Are you meeting with your Canadian counterpart here?"
"I am," Bessent said.
"Because, I guess, markets are wondering if we're now in a tit-for-tat trade war with Canada," Eisen said.
"Well, I don't think you can be in a tit-for-tat with someone who's 13 times larger than you are," Bessent said.
"They say they're doing okay,” Eisen countered.
Bessent just laughed. “What else are they going to say?"
The interview happened a week after trade talks between the two countries collapsed and both governments answered with 50% tariffs on each other's goods. About a week before that, Ottawa had promised to hit back with tariffs on roughly $20 billion of American goods, mirroring the 50% tariffs the Trump administration slapped on a similar slice of Canadian imports, while Trump renamed Lake Ontario “Lake America” because, why not? Those retaliatory tariffs, which run anywhere from 15% to 50% depending on the product, kick in on September 8.
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But we can’t delude ourselves into thinking Canada’s actions have anything to do with the actual economics of a trade war. As Bessent pointed out, the United States economy is 13 times larger than Canada’s. Do they really think they can win this?
I don’t think they do. So, what’s this really about?
Bessent said that Prime Minister Mark Carney "came to power on an anti-American, anti-Trump agenda" despite trailing by 20 points in the polls, then picked a fight with the U.S. once he took office. Bessent said Carney is "doing what is best for the Liberal Party, what's best for Mark Carney" instead of what's good for Canadians, and he predicted they "are going to see through that."
I think Bessent hit the nail on the head.
U.S. Treasury Secretary Scott Bessent takes a shot at Canada, mocking the country’s military capabilities:
— YEGWAVE (@yegwave) August 31, 2026
“We’re not at war with Canada… What are they going to do, take their two submarines from the Edmonton Mall and sic them on us?” pic.twitter.com/53kqjSoiT5
He’s right. Canada depends on the U.S. for most of its exports, while the U.S. sees Canada as one market among many. This is political theater. Canada can’t match the U.S. economic leverage, and the posturing is cover for anti-Trump grandstanding.
Posing as a Trump antagonist has become a reflex for foreign leaders chasing applause back home. It's a political calculation, and Carney is banking on a domestic audience that would rather watch him take a swing at Trump than watch him cut a deal.
Trump isn't hiding his frustration with countries that have spent years taking advantage of the United States on trade, and he isn't backing off just because a neighbor with a fraction of America's economic weight wants to posture for its own voters. One way or another, Canada is going to lose this fight.
