Prime Minister Mark Carney said he still believes a "mutually beneficial" trade deal with the United States is possible, but discussions cannot resume while Trump administration officials are publicly insulting Canada.

Speaking to reporters in Ottawa on Sept. 1, Carney was asked about S. President Donald Trump's move to rename Lake Ontario as "Lake America," along with other comments from S. officials denigrating Canada's military and economy.

"There's a positive opportunity that has always existed with the United States for a mutually beneficial trade deal that respects Canadian sovereignty," Carney said, according to The Straits Times.

"When the Americans stop doing memes, stop throwing shade, stop trying to be tough and start being serious about having those discussions, we can have those discussions."

Asked specifically about remarks from members of Trump's Cabinet insulting Canada's armed forces, Carney called those comments "beneath their office."

Rising tensions after trade talks collapse

The exchange comes after trade talks between Canada and the S. broke down on Aug. 21. Carney said he pulled Canada's negotiating team late that day after the S. side introduced "last-minute changes" that the government deemed "unfair" and "uneconomic," as reported by CBC.

Carney attributed the collapse to an "accumulation of issues," including proposed tariff arrangements affecting key industries such as auto manufacturing, according to The Straits Times. He said S. officials took the view that Canadian sectors "would be subsidiaries, effectively, of the United States' industries, or would gradually wind down in Canada."

"We're not going to accept those terms," Carney said. He called Trump's attempt to "crush" Canada's auto industry "misguided," arguing that "the United States auto industry is made stronger by the Canadian and the Mexican auto industries." He added, "At a time of big, big change in autos, it's important that we work together."

Carney said the demands would have restricted Canada's ability to sign trade deals with other countries and undermined subsidies to French-language media and bilingual product labelling requirements, as reported by CBC. He repeated that any one of those demands was enough to walk away from the trade table, but suggested hope for a deal remains.

"There is a positive opportunity that has always existed with the United States for a mutually beneficial trade deal that respects Canadians' sovereignty and respects our right to protect and promote the Quebec culture and the French language, but it must have those characteristics," he said.

Insults and trolling

Since the talks fell apart, Trump and his cabinet have taken to social media to insult Canada. Treasury Secretary Scott Bessent compared Canada's navy to a now-closed ride at the West Edmonton Mall, asking if Canada was going to "take their two submarines from the Edmonton mall and sic them on us," a reference to a visitor attraction removed from the mall in 2005, according to The Straits Times. Transport Secretary Sean Duffy said Canada is "a country that doesn't have a military," as reported by CBC.

Defence Secretary Pete Hegseth made a post mocking two women in a Canadian youth cadet programme, and the White House posted an AI-generated video of Canada geese with Trump-like hair marching with guns, according to CBC.

Carney made his remarks in a scrum on Tuesday following the Liberal Party's sweep of three byelections on Monday night, as reported by CBC. He said, "But look, it's not constructive, but that is their democracy."

Retaliatory tariffs and diplomatic engagement

Hours after the deal fell apart, the S. hit Canada with 50 per cent tariffs on about $28 billion worth of Canadian exports, according to CBC. The Straits Times reported the tariffs as US$20 billion (S$25.46 billion). Canada announced retaliatory duties set to take effect Sept. 8 on a roughly equal amount of S. goods, with Carney saying Canada would match those tariffs dollar for dollar, as reported by CBC.

Finance Minister François-Philippe Champagne is scheduled to meet with Bessent on Tuesday afternoon at the G20 finance ministers' meeting in Asheville, , according to CBC. Champagne said Canada needs to be "serious but also constructive."

"I think [Bessent] has clearly understood the message from Canada. We have key sectors and key industries in Canada that we want to protect, and they know that we're firm in our positions. So that's how we see the current situation and that's how I am going to approach my discussions with the secretary this afternoon," Champagne said, as reported by CBC.

Champagne has also pitched Canada as a source of food, energy and critical mineral security in meetings at the G20, according to CBC.

Carney noted elements of cooperation in August trade talks but said "it diverged towards the end." He expressed hope that "at some point, maybe it'll converge again," according to The Straits Times.