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Russian President Vladimir Putin could talks with President Donald Trump as early as this week. Artem Priakhin/SOPA Images via Reuters Connect
US President Donald Trump and Russian President Vladimir Putin will discuss America’s 30-day ceasefire proposal this week after Ukraine endorsed the plan last Tuesday but Putin torpedoed it with a list of conditions.
What does Russia want? To allay fears that a pause will give Ukraine a chance to rearm itself, Putin is demanding that Ukraine cease all military mobilization and that the West halt arms supplies. Moscow also wants to formally annex the regions of Donetsk, Luhansk, Kherson, and Zaporizhzhia, which Russia occupies but has not managed to fully control – something Ukraine adamantly opposes.
Who else is engaging – or not? UK Prime Minister Sir Keir Starmer announced Saturday that a growing coalition of nations will back Ukraine in its negotiations with Russia, including offering air and peacekeeping support, as well as seizing frozen Russian assets to keep the pressure on Moscow.
Meanwhile, Trump narrowed the role of US General Keith Kellogg from Special Envoy to Moscow and Ukraine to dealing only with Ukraine, reportedly after the Kremlin claimed Kellogg was too close to Kyiv. In a post on Truth Social, Trump claimed that "General Kellogg, a Highly Respected Military Expert, will deal directly with President (Volodymyr Zelenski), and Ukrainian leadership… He knows them well, and they have a very good working relationship together.” Businessman and US Middle East envoy Steve Witkoff, who has previously said that Russia was “provoked” into attacking Ukraine, is now considered the key player in the talks with Putin.
What’s happening on the ground? After a vicious drone assault last weekend, Russian forces are now fighting to expel Ukrainian troops from the Kursk region. Ukrainian soldiers there are vowing to “fight to the bitter end” amid evacuations and destruction in border villages.
Borderline frenemies meet in Quebec for the G7 as Canada begins thinking the unthinkable: how to defend against a US attack.
You know things are going badly when the first thing Secretary of State Marco Rubio has to do on his G7 visit to Canada is deny his intention to invade. “It is not a meeting about how we’re going to take over Canada,” he said, though no one believed him.
Why would they?
President Donald Trump’s mantra includes daily insults, threats, and acts of disrespect toward Canada as he launches his destructive trade war. But for a guy who’s all about high walls and protected borders, he has a very different view of it when it comes to his northern neighbo(u)r, dismissing it as an “artificial line” drawn “with a ruler.” “When you take away that,” he said this week in a moment of empire-building fantasy, “and you look at that beautiful formation of Canada and the United States, there’s no place anywhere in the world that looks like that.”
I have no clue what he means by that whole “beautiful formation” thing, but our hardcore GZERO trivia fans deserve a short backgrounder on the actual formation of the US-Canada border.
Since the Treaty of Ghent (oh yes, I’m going there!) ended the War of 1812, the boundary between Canada and the US has been relatively stable. Sure, some fellow history buffs will point out the border was tested in 1816 by the humiliating construction of a US military battery dubbed “Fort Blunder,” a battery mistakenly built on Canadian soil that had to be moved south, where it is now called Fort Montgomery. But we survived that tiff. Later, in 1842, the Webster-Ashburton Treaty (stay with me here) clarified the border with better surveys, and in 1909, the Boundary Waters Treaty determined how the Great Lakes would be divvied up. Since then, there have been updates and a few disputes, but prime ministers and presidents have happily memorized what might be called the Psalm of the 49th parallel, which starts with the famous line, “This is the longest undefended border in the world.”
So no, these are not artificial lines but ones mutually agreed upon in legally binding treaties. The nub is that President Trump has shown he doesn’t care about treaties, even ones he signed himself, like the USMCA back in 2020. He prefers the law of the jungle, where strong countries take what they want from weaker ones. And Trump wants Canada. He has repeatedly claimed that Canada would not be “viable as a country” without US trade, which is why his stated strategy is to annex Canada by “economic force.”
Trump’s administration regularly amplifies his imperialist sentiments. This week, White House Press Secretary Karoline Leavitt made the case that Canada should become a state to avoid tariffs, while US Commerce Secretary Howard Lutnick went on TV after Ontario Premier Doug Ford threatened to slap a 25% tariff on electricity to three northern US states, saying the best way to get a good trade deal with the United States is to “consider the amazing advantages of being the 51st state.”
It’s no wonder that Prime Minister Justin Trudeau, who leaves office tomorrow, concluded this is about taking over Canada: “What he wants is to see a total collapse of the Canadian economy because that’ll make it easier to annex us.”
When Rubio arrived in Canada for the G7, his Canadian counterpart, Foreign Affairs Minister Mélanie Joly, was not in a joking mood. “If the US can do this to us, their closest friend, then nobody is safe,” she said. Her colleagues in the EU have already absorbed that message, which is why they are talking about a European-run nuclear shield and a massive buildup of their collective defense forces.
It was almost sad to see how the secretary of state tried to spin Trump’s agenda in a bid to lower the temperature. “He says if they became the 51st state, we wouldn’t have to worry about the border and fentanyl coming across because now we would be able to manage that,” Rubio said.
Oh, thanks a bunch.
Annexing Canada is necessary because less than 1% of the illegal fentanyl that enters the US goes across the northern border? By that logic, Canada should annex the US because of the inflow of illegal guns from the US. It is madness, of course, but it’s a madness that is now being measured.
Angus Reid recently conducted a poll on the idea of annexation, and about 60% of Americans oppose it (including 44% of Trump voters), and about 30% would be interested only if Canadians supported the idea. They don’t. In the same poll, 90% of Canadians reject the idea outright, with one interesting exception. “One-in-five would-be CPC voters say they would vote yes, compared to almost zero Liberal (2%), NDP (3%), and Bloc Québécois (1%) voters,” reports Angus Reid.
Still, all this thought about annexation has the defense department in Canada running through scenarios they never imagined possible just months ago: what to do if the US ever attacked.
Trump has questioned the border lines in the Great Lakes, so what if US Coast Guard vessels started to cross that line and test the boundary? What about around the coast or in the Arctic?
Canada suddenly realizes — far too late – that the 2% GDP goal on defense spending is no longer aspirational but urgent. But what kind of military does it need? To find out, I spoke to retired Vice Admiral Mark Norman, the former vice chief of defense staff in Canada and currently a fellow at the Canadian Global Affairs Institute.
I’ve edited the conversation for this article.
GZERO: Some argue the US is still an ally, but others say we have to treat the US as a foe, one that could even potentially attack Canada. How would you describe the situation?
Norman: We’re outside the guardrails. To put it in nautical terms, we’re in completely uncharted territory here. What’s real and what’s not? How do you interpret what we’re hearing? How do we not overreact? There are many Canadians, both in the public domain and in the machinery of government, who I believe are banking on the faint hope clause, if I can put it that way, meaning they think that things will go back to the way they were. I think that is naive and irresponsible going forward. I don’t believe this is sort of a blip in the evolution of geostrategic affairs, specifically as it relates to the Canada-US relationship. I think we’re seeing a significant change — one could argue it’s almost a pivot.
Look at the Ukrainian situation and the public abandonment of European security. Then look at the ongoing threats of annexation as it relates to Canada.
Canadians have grown up far away from the kinds of threats to physical security and other types of security that many of our global neighbors have had to deal with. We have lived under the umbrella of the United States, and we have taken that for granted. There is some substance in the complaints that are being levied against us. The challenge is the nature of both the threats and the ongoing actions, and what that potentially means for us. I am concerned that the nature of Canada-US relations is changing fundamentally.
What could it look like?
There are two scenarios here, and there is risk in oversimplifying this ... One scenario is that this is simply transactional. This is Trump’s attempt to try and get us to do a bunch of things to up our game, our spending – to do more and contribute more. One could argue this transactional approach, this negotiating tactic, will lead to some magic tipping point at which everything falls into place, and we have some sort of agreement. That is scenario A.
Scenario B is the most threatening scenario. We’ll call it annexation. Not sure what that looks like, specifically, but we take this to mean that in some way or form, the United States is exercising a significant degree of control over what we would have traditionally seen as sovereign decisions made by Canada.
From a military perspective, much of what we would need to do is actually independent of those two scenarios. So we either have to step up and satisfy a whole series of unclear expectations on the part of the current administration, everything from border security to Arctic security to all these other things, or we’ve got to up our game, because if we don’t, then we risk the threat of some sort of loss of control.
I have difficulty imagining scenarios whereby Canada would be invaded or that Canada could respond to something like scenario B. I think there will be coercion. I think there are lots of tools left in Trump’s toolbox to coerce us and threaten us and basically put us off-balance and cause us to react. What’s interesting is we’re either on our own, at which point we need to do a hell of a lot more than we’re doing now, or we’re in the process of being shaken down, which also means we need to do a hell of a lot more. Those will be preconditions for what would be even the most benign and benevolent version of events.
So Canada has to rebuild its military one way or another?
Let’s start with national capacity, domestic capacity, and industrial capacity. One of the unintended consequences of the Ukrainian conflict has been the incredible growth in Ukrainian domestic capacity, notwithstanding the fact that they’re waging what many argued was an unwinnable war against a superpower with one of the largest armies in the world. A lot of that has to do with innovation, engineering, and agility, which has now made them a significant player in the European defense industry. It is particularly relevant to the Canadian situation, where a lot of our military capacity is tied to US technology. I think this is a huge vulnerability for us going forward, even if we were to find ourselves in scenario A. We cannot and should not rely on others for a lot of the stuff. Now, we cannot do everything, but there are enormous alternate sources of technology in our European and Asian partners. And we have to do a much better job of leveraging our own industrial capacity. What are we really good at? We’re really good at things related to AI, acoustic processing, and communications. We’re very good at things related to satellite technology. We have a number of emerging capabilities in unmanned systems, be they airborne or surface, and even underwater capabilities. We have enormous advantages in terms of understanding the technical challenges of the Arctic. It is our backyard. In military terms, we are good at combat management systems. So think of the computer architecture that allows you to do what you need to do from a command and control perspective.
Is the point that Canada will have to build a new type of military faster, cheaper, and less dependent on the US and use more innovation?
Canada will definitely need to explore alternative solutions, like drone capacity, to address the challenges of defending vast territories. But it will still need icebreakers, a navy, and tanks. It’s a new world. One other factor here. You need to be able to deploy and sustain your forces. A lot of people don’t think that’s sexy, but the reality is, this is all about logistics, and this is all about sustainment, which means you have to have an industrial base. You look at the kinds of distances that we’re dealing with in Canada — these are massive distances. These are not insignificant challenges, and we’ve never really dealt with them. You need to be able to control what’s going on. Do you just simply want to monitor what’s going on, or do you want to be able to influence what’s going on? This is where you get into the pointy ends, the more kinetic discussions around what are the hard capabilities that you need and don’t need, but you have to have all that other stuff sorted out first. The reason the Ukrainians are so effective in these asymmetric conflicts is because they figured out a lot of that back-end stuff. Canada needs to do that too.
Trump has deployed his most disruptive weapon yet against China. Will it work? #PUPPETREGIME
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Canada’s new PM is a technocratic banker who’s never been elected — and that might help him
Canadian Liberal Party leader Mark Carney faces Conservative leader Pierre Poilievre in this composite, with Donald Trump hovering in the background.
Mark Carney was sworn in Friday as the prime minister of Canada.
AsCarney takes the helm from Justin Trudeau, the country is witnessing a stunning rebound for the Liberals. In January, the governing Liberal Party trailed the opposition Conservatives by 25 points. Now, the gap has closed to roughly 6 points, and some recent polls even have the Liberals ahead. And Carney’s previous, purported liabilities — being a staid, low-key, globalist technocrat who’s never been elected — may now be seen as strengths as he prepares to call a snap election in the coming days.
What changed between January and today? In short: Donald Trump andTrudeau. Once Trudeau signaled his intention to go, the polls started moving in the Liberals’ favor. Then, Trump threatened Canada with annexation, calling for it to become the “cherished” 51st state and ushered in a trade war with heavy tariffs. Canadians rallied around the flag — and the governing party. Now it seems those same Canadians may be looking for an unflashy, steady hand on the tiller — a leader who can calmly explain matters and strike a stable, reliable posture.
Carney flips the script
Twice serving as a central banker — head of the Bank of Canada and, later, the Bank of England — Carney held earlier positions as deputy minister and an investment banker. His time at the central banks coincided with two major crises: the global financial crisis and Brexit. He’s been criticized by many on the right and left — including me — as a boring technocrat who couldn’t rise to meet today’s populist anger. The Conservatives and their leader, Pierre Poilievre, attacked him as a globalist — a banker with multiple passports, a Davos man through and through. A European, even.
Now, as Canada stares down threats from Trump and begins to look at trade and defense diversification, Carney’s CV and aesthetic may be valuable assets for enough voters to save the Liberals — or, at least, to bring them back from the brink of a previously expected wipeout.
These circumstances give Carney the chance to present himself as the change candidate with enough insiders onside to get the job done. He’s not Trudeau, and he’s never been elected — yet he has the steady hand of continuity as a Liberal surrounded by members of Parliament who’ve been around the block. He’s calm, experienced in negotiation and economic management, and he can explain the crisis at hand and what needs to be done. Even conservative Ontario Premier Doug Ford says Carney “understands finances like no other person.”
Still, Carney faces a big leadership test, and his party continues to trail in most polls. Graeme Thompson, a senior macro-geopolitics analyst at Eurasia Group, says Carney’s skills and temperament make him a kind of anti-Trump. But there may be a limit to how far that will take him in an election campaign, even if they serve him while governing.
What happens, asks Thompson, “when the technocratic economist skills and experience, and the kind of bland, boring, predictable, safe persona runs into the fact of a 40-day electoral sprint in front of the media, live crowds, and on debate stages with Pierre Poilievre?”
Carney versus Trump, Poilievre versus …Trudeau?
When Carney hits the debate stage, he’ll be running against Trump, and he’ll make the case that while he can’t manage the mercurial president — he says Trump can’t be controlled — he can effectively navigate the crises emanating from the White House.
In his victory speech in Ottawa last Sunday, Carney said as much, sending a message to Canadian voters — and Trump — and setting the tone and focus of his campaign for the federal election.
“Canada never, ever will be part of America in any way, shape, or form,” said Carney. “We didn’t ask for this fight, but Canadians are always ready when someone else drops the gloves.”
On Wednesday, Carney said he’ll only meet Trump if the president respects Canadian sovereignty, though he didn’t specify exactly what that would entail.
Poilievre and the Conservatives, meanwhile, have been left snakebitten by the quick turn of events. They say they’re not panicking at Carney’s rise, but they’re dropping in the polls, and they’ve lost the electoral focus — the carbon tax — they’ve worked on for over a year. Like the Conservatives, Carney says he will also scrap consumer carbon pricing. Poilievre has built his campaign around his character: combative, angry, unapologetically right-wing, and, above all, anti-Trudeau. He’s built his entire campaign around running against Trudeau.
Now, he’ll try to make the case that the new PM is Trudeau 2.0. Poilievre will question his opponent’s trustability, pointing to the fact that Carney has not disclosed his financial assets — even though he has now put those assets in a blind trust — and that Carney’s using Trump as a distraction.
Described as Trump-like or Trump-inspired in the past, Poilievre recently has been tougher on the president, attacking his tariffs, supporting counter-tariffs, and emphasizing that Canada will never become the 51st state. But it’s a fine line; he knows much of his base has been pro-Trump — and some still are. Poilievre can’t afford to alienate them, and the Liberals will be all too happy to try to tie the Canadian right to its US counterpart.
One way or another, the Canadian election will be about Trump, which could help the Liberals.
“If the election is about people wanting the opposite of whatever it is that Donald Trump is offering, then that works to the benefit of the Liberals,” Thompson says.
“In a way, you’re going to get a fight not between two relatively different policy visions, but two notions of what the ballot question is. A lot is going to be determined by the actual campaign, but the Liberals are definitely back in the game.”
Russia's President Vladimir Putin addresses commanders as he visits a control center of the Russian armed forces in the course of Russia-Ukraine conflict in the Kursk region, Russia, on March 12, 2025.
Russian President Vladimir Putin made a surprise battlefield visit on Wednesday, telling troops in the Kursk region of Russia to “completely destroy” the Ukrainian forces that have occupied parts of the area for nearly seven months.
The visit came as US envoy Steve Witkoff was headed to Moscow to discuss the proposal for a 30-day ceasefire, which was agreed by the US and Ukraine at talks in Saudi Arabia earlier this week.
Ukrainian forces first pushed across the border into Kursk last August in a surprise offensive meant to boost Kyiv’s leverage with Moscow. In recent weeks, Ukraine’s positions there have weakened significantly. On Wednesday, Russia said it had reclaimed the strategic city of Sudzha from Ukrainian forces.
In his remarks, Putin gave no indication of whether Russia is prepared to agree to the ceasefire but stressed that Kursk should be fully liberated “fairly soon.”
On Wednesday, US President Donald Trumpsaid the fate of the ceasefire is “up to Russia now.”A bird flies near the U.S. Capitol building in Washington, D.C., U.S., February 25, 2025.
Well, the old game of chicken over funding the US federal government is back on, as Senate Democratic leader Chuck Schumer said Wednesday his party would NOT vote for the six-month stopgap funding bill passed by the GOP in the House on Tuesday night.
Given the procedural details of this kind of funding bill, which requires 60 votes, the Dems can kill the bill despite holding just 45 seats.
Why’d the Dems do this? They say the six-month bill, which would keep current overall spending levels in place without earmarking specific outlays, would give the Trump administration, and quasi-official DOGE Czar Elon Musk, too much leeway to radically reshape the federal government.
Instead, the Dems prefer a 30-day stopgap, during which time they want to negotiate more specific tax and spend details with the GOP. Getting a new bill will be tough, as the House has already broken for a weeklong St Patrick’s Day recess.
The clock is ticking: Current funding for the Federal government expires just past midnight on Friday.
The political calculation: Although Democrats have in the past criticized Republicans for pushing the government towards a shutdown, they may be betting they’d face less blowback for a shutdown than they would for the perception that they failed to stop Donald Trump’s cost-cutting agenda, which could target key entitlements like Medicaid.
But is this just posturing? A report in The Hill early on Thursday suggested that in the end, enough centrist Democrats could in fact vote to pass the bill.
Trump in front of a downward trending graph and economic indicators.
For someone who campaigned on lowering grocery prices on day one and rode widespread economic discontent to the White House, Donald Trump sure seems bent on pursuing policies that will increase that discontent.
If you don’t believe me, take it from the president himself, who refused to rule out a recession last Sunday and acknowledged that his sweeping tariff plans would cause “a little disturbance.” But, he added, “we are okay with that.”
Are we okay with that, though?
From Trump pump to Trump dump
Trump’s election victory unleashed “animal spirits” as many business leaders and investors hoped he’d follow through on his campaign promises to cut red tape and lower taxes while ignoring the more disruptive planks of his economic platform: tariff hikes and immigration restrictions. Surely much of it was posturing and bluffing, they thought, and Trump’s more extreme impulses would be checked by market-friendly advisers like Treasury Secretary Scott Bessent. In the worst-case scenario, they assumed Trump would course correct when confronted with sliding stock prices or signs of economic cracks.
Slowly but surely, they are starting to realize they got it wrong. Trump meant what he said and is less bound by constraints than during his first term. (I hate to say I told you so, but it wouldn’t have taken them so long to figure this out if they subscribed to this newsletter.)
The S&P500 has dropped by 8% over the last month (so far) as the president’s promised “golden age” of growth collided with the chaotic reality of Trumponomics. American equities are not only lower than they were before Trump’s inauguration but have erased all gains since he became the odds-on favorite to win the race in October. This represents the worst stock market performance in a president’s first 50 days since Barack Obama took office in the midst of the global financial crisis.
But it’s not just Wall Street that’s souring on Trump’s plans. Consumers, small businesses, and CEOs alike are all reporting sharp declines in confidence, largely due to record uncertainty about tariffs. Manufacturing activity is slowing, retail sales and construction spending are falling, and businesses of all kinds are paring back their investment plans as threats to the US outlook mount.
Inflation expectations are on the rise, with 60% of Americans believing Trump isn’t doing enough to bring down inflation and 68% fearing that his tariffs will lead to higher prices. Most Americans think the economy is on the wrong track and disapprove of the president’s handling of it. No wonder Trump’s net approval has taken a quick hit, his honeymoon ending faster than any other president’s save one: Trump 1.0.
It's the economic uncertainty, stupid
Businesses and investors have reason to worry.
In his first six weeks in office, Trump has made it clear that he is dead serious about building a “tariff wall” around America, not as a negotiating tool but to reshape global trade flows. The US effective tariff rate is set to rise to its highest level since the 1940s by the end of the year, raising prices for American consumers and businesses and slowing down growth. Trump has virtually closed the southern border and ramped up the pace of deportations, which will constrain the labor supply and lead to higher prices and lower growth. He has threatened to eliminate government subsidies, contracts, and grants that businesses, universities, and other organizations rely on. And he has empowered Elon Musk’s chaotic effort to purge, downsize, and capture the administrative state, threatening the delivery of critical public services, amplifying these macroeconomic shocks, and destroying US state capacity.
And yet, these first-order consequences of Trump’s policies are not the core reason why traders and boardrooms are freaking out about the outlook for the US economy. Don’t get me wrong, businesses prefer good policies to bad policies. But they can adapt to bad policies. You know what they can’t adapt to? Policies that can turn on a dime based on the president’s whims.
Maybe you agree with Trump that “trade wars are good and easy to win,” or perhaps you believe his policies will cause short-term pain but be worth it in the long run. But whatever you may think of the merits of his agenda, there’s no denying that the constant uncertainty he brings to the table is terrible for business.
Every business decision is a bet about the future. The one non-negotiable before making any investment is a bare minimum of predictability. When the rules of the game can change any day (and when they’re no longer applied impartially), the rational choice is to put off costly long-term investment plans – even if the possible payoffs are high.
That’s why the extreme policy arbitrariness, volatility, and uncertainty that characterizes Trump 2.0 – best exemplified by his on-again, off-again, on-again tariffs – is the ultimate economic dampener. Even if Trump walks back some tariffs or implements his pro-growth promises, uncertainty – by some metrics already higher than it was during the pandemic, the 2008 financial crisis, and 9/11 – will remain near all-time highs for the foreseeable future, discouraging investment, hiring, and consumption, and raising prices. Its chilling effect will compound the direct impact of the administration’s implemented tariffs, deportations, federal layoffs, and so on. As I warned in Eurasia Group’s Top Risks report, “in the long run this will risk undermining the predictability and performance of the world’s most dynamic economy, preeminent investment destination, and issuer of the global reserve currency.”
No more Trump put?
Trump seems to have no intention of backing off his plans or moderating his “move fast and break things” approach, even in the face of economic dislocation. “Markets are going to go up and they’re going to go down, but, you know what, we have to rebuild our country,” he said at the White House yesterday.
This contrasts sharply with his first term, when Trump considered the stock market a barometer of success. Back then, investors and business leaders knew they could count on the “Trump put” – the president’s tendency to curtail his most economically harmful policies when faced with financial turmoil. Now, Trump is openly saying he doesn’t care that investors believe his agenda could cause a recession and raise prices – because it might, and he’s convinced the sacrifice will be worth it for the greater good. “Will there be some pain?” he asked in February. “Maybe (and maybe not!) But we will make America great again, and it will all be worth the price that must be paid.”
So the Trump put either doesn’t exist anymore, or the threshold is significantly higher than it used to be. This makes sense when you consider the president doesn’t have to (read: can’t) run for reelection again. After being twice impeached, convicted, nearly assassinated, and taken for dead politically, the 78-year-old Trump is in a rush to cement his legacy before his “enemies” get another chance to take him down.
True, most presidents – even lame ducks – would consider avoiding a crippling economic meltdown, scoring a decent result in the midterms, and handing the reins to a same-party successor essential to a good legacy. But Trump is no ordinary president. He does not, for example, care much about the Republican Party (after all, he hasn't been a member for long). What he does care about is his own image. In that sense, he is still constrained by public opinion – or rather, his perception of it.
The key question is whether there’s anyone around him who can speak truth to power to a man who has famously little patience for being told he’s wrong. As I wrote in Eurasia Group’s Top Risks report:
Not only does the president-elect have unified government and consolidated control of the Republican Party, but he is building a more personally loyal and ideologically aligned administration than last time. His team will come into office ready to implement – rather than thwart – Trump’s agenda.
If his first 50 days are any indication, the US economy may be in for a lot more trouble until reality pierces his bubble … if it ever does. The beatings will continue until morale improves.