Canada Overreacted to Trump Threats, Biden’s Ambassador Says

David L. Cohen, the previous US Ambassador to Canada, credits new Prime Minister Mark Carney with a strong start resetting the country’s relationship with President Donald Trump.

That’s partly why Cohen, a former Comcast executive and ambassador during the Biden administration, remains optimistic about the countries’ friendship, and an eventual cooling off in their trade war.

In an exclusive interview with Bloomberg Government in his Philadelphia office, Cohen also explained why he thinks Canada overreacted to Trump’s provocations, and what he thinks the president is aiming for.

Questions and answers are edited for length and clarity.

Where do you see tariff fight right now?

If you take a step back and say, ‘where did this come from?’ It starts with the relationship between leaders, and there’s just no doubt that President Trump and Prime Minister Trudeau did not have a good relationship. Not sure what the cause of that was, but there was real antipathy.

There’s pretty clearly a respect that President Trump has for Prime Minister Carney, maybe from Prime Minister Carney’s business background, that he never seemed to have for Prime Minister Trudeau, and out of that respect has come a different type of a relationship in terms of civility.

How has Carney done interacting with President Trump?

For several weeks, you didn’t even hear 51st state rhetoric from President Trump. When it came to the meeting, and he again raised it, I thought Prime Minister Carney was incredibly artful and powerful. He pushed back, but he did it in a respectful way.

Most importantly, he did it in a way that Donald Trump would understand. He said, ‘Being from the real estate world, I know you appreciate that some things are not for sale.’ And Trump smiled.

I’ve always thought the 51st state rhetoric was overblown. Canada made too big a deal of it. It was vintage Art of the Deal strategy to find something that could get under the skin of Prime Minister Trudeau and of Canada.

You’re seeing the beginning of at least a begrudgingly respectful relationship between the president and the prime minister, and it’s out of a respectful and civil relationship that you can have the kind of dialogue that I think Canada and the United States need to resolve some of these trade issues.

You sound optimistic?

I am definitely optimistic. I’ve been that way from the outset.

I have been of the view that those announced tariffs are never going to occur, that this was mostly about leverage from a President Trump perspective, maybe leverage to have a higher tariff rate than at present. But the 25% tariffs, particularly on Canada, were going to be more than what United States business, more than what United States governors, more than what United States senators, more than what the United States populace would find acceptable because of the interconnected nature of the Canadian and United States economies.

I don’t want to second guess the Canadian reaction, because it was an existential threat, but [Mexican] pushback was quieter, was not as public, was not as hysterical, and in the backing off of tariffs, Mexico and Canada were treated exactly the same. So you have to ask, what did the much more public and much more scary Canadian responses get Canada as compared to Mexico? And I would argue, nothing.

What should Americans know about Carney?

First of all, he’s not a career politician. In that way he’s sort of like Donald Trump. This last election was his first election ever. He’s an extremely successful business person.

That does not mean that he had no political experience. As the head of the central bank of two G7 countries, he had to be engaged in a lot of politics.

So you’ve got a politically seasoned, even if not politically experienced, financial professional who is immensely respected by the business community. And you’ve seen the respect that he’s been able to gain from Donald Trump.

What do you see as an end game?

You’ve seen the beginning of a climb down. President Trump has already turned the heat down or off in many cases. Being optimistic, I think you will see a relatively low tariff environment between the United States and Canada.

Some tariffs for some goods at some rates probably makes sense, and by the same token, it’s why a good, strong trade agreement as a complement to those tariffs is probably the right way to go. But that’s not across the board tariffs, and it’s certainly not 25% tariffs, it’s certainly not 40% tariffs or 60% tariffs. This may be the kind of thing that you have to toggle, and toggle it at the same time that you’re working on regulatory or agreement-based practices between our two countries.

What do you think is Trump’s bottom line?

Canada is not the problem, and I think he recognizes that. It’s why he’s dealing with the UK and he’ll deal with the EU and he’ll deal with Asia, and he’ll deal with China, because those are bigger fish to fry in the overall tariff story. So I think that Canada will likely be the tail of the dog in this story.

If a 10% across the board tariff is going to become the new baseline, then that will become the major issue that is subject to negotiation between Canada and the United States, along with a replacement or a modification of USMCA, and you’ll find a Trump administration position that goods and services that cross the border pursuant to that new trade agreement are not going to be faced with significant reciprocal or punitive tariffs.

What advice did you give your Canadian friends for how to deal with Trump?

One of the pieces of advice I gave the Canadians, and give to everyone, is read Art of the Deal. He may not have written it himself, but Art of the Deal remains, the best statement of Donald Trump’s negotiating strategy.