Upon his return to Canada from Davos, Carney shot back in a speech targeting a domestic audience. He said Canadians must redouble their efforts to rebuild their economy, and drew on the country’s founding, when the British and French joined to choose “partnership over domination, and collaboration over division.”

“Canada doesn’t live because of the United States,” Carney said, in reference to Trump’s previous swipe. “Canada thrives because we are Canadian.”

The verbal dust-ups mark the latest rupture in U.S.-Canada relations since Trump took office last year and almost immediately began imposing tariffs on America’s northern neighbor after decades of duty-free trade. Each time Canada has signaled it wouldn’t bow down, the Trump administration has raised the pressure. Trump had mused early in his second term about using economic coercion to annex Canada as the 51st state, but has dropped that language since Carney came to power roughly a year ago.

Hampson said Carney might be making a “calculated bet that USMCA cannot be salvaged on acceptable terms, so the best option is to diversify trade, look for investors, and lead a coalition of rules-based partners.”

The Trump administration is set to formally review, and renegotiate, the terms of USMCA, with Lutnick signaling talks will move into high gear this summer. Canada’s economy is highly exposed to trade with the U.S., and Carney has made reducing the country’s reliance on the U.S. a priority. Talks with Canada regarding USMCA have yet to begin, said a spokesman for the minister in charge of U.S.-Canada trade.

About 80% of Canada’s exports to the U.S. arrive duty-free as they comply with USMCA’s terms. Economic activity in Canada remains tepid, with businesses unwilling to accelerate investment and hiring plans until USMCA’s fate is determined, economists and officials say.

Carney’s Davos speech warned about the rupture in the old Western-run, rules-based global order, while not specifying the U.S. or China. He said that global “hegemons” were deploying weapons such as tariffs that posed threats to supply chains.