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Trade war may push Canada closer to its threatening ally
When Canadian defense expert Philippe Lagassé met with American counterparts in Washington this week, he quickly sensed they had not registered that the mood had shifted in Canada.
“There’s still a lot of emphasis on partnership,” he said. “We should be working together. We should be doing some things together.”
But Lagassé, an associate professor at Ottawa’s Carleton University, had to tell them that things had changed. “That’s hard right now because, politically, that’s just become a lot more difficult.”
Canadians were so angered by Donald Trump’s tariffs and annexation threats that they yanked American bourbon from liquor stores and turned up their noses at American produce. The typically staid hockey fans of Ottawa even booed the US national anthem.
Canadians, who are used to thinking of the Americans as friendly neighbors, are suddenly seeing them as a threat to their sovereignty. A poll this week shows 80% of Canadians support using oil as a weapon in the trade dispute, which would be a dramatic escalation. On Monday, Trump called off the planned 25% tariffs after Justin Trudeau agreed to take measures on the border, but the pause is for just 30 days.
Rattled Canadians are suddenly more committed to enhancing their sovereignty by reducing internal trade barriers, diversifying international trade so the country is less dependent on the United States, and beefing up the military.
Long a NATO laggard
It will need a lot of beef. For decades, Canada has sheltered under the coattails of Uncle Sam.
With oceans on both sides, an impassable ice cap to the north and friendly Americans to the south, there was little public support for military spending and lots of support for spending money on social programs. Even tough-talking Conservative Stephen Harper did little to boost defense spending. Canada is a NATO laggard, spending only 1.37% of GDP on defense — the average across NATO members is 2.71% of GDP — something Barack Obama, Joe Biden, and Trump have all complained about. Last year, leaked documents showed that Trudeau told NATO that Canada had no plan to get to 2%, the level all NATO countries have agreed on.
When political circumstances changed, Trudeau laid out a plan to get to 2%, but years of neglect will take time to turn around. Due to recruiting problems, there are only 63,000 people in the Canadian Armed Forces — well below the 71,500 it is supposed to have. Even at full strength, it is tiny compared with the 2 million troops south of the border. To make matters worse, three-quarters of Canadian soldiers are either overweight or obese.
Canada has summoned the will, finally, to spend on defense. Trudeau has promised to reach 2% by 2032. His likely successor, Mark Carney, said Wednesday he would aim for 2030. The defense minister has said we could get there within two years, although quickly rearming would pose logistical challenges.
But it is not clear if Canada's big push will be in partnership with its newly hostile neighbors. After all, if the United States decides to put tariffs on all Canadian exports, driving the country into a deep recession, would Canada want to proceed with the CA$70-billion purchase of 88 F-35A US fighter jets? Or would Ottawa cancel the order and buy fighters from Sweden, which has never threatened annexation? And if Canada’s economy is in free fall, could it afford to buy either?
Pentagon control
And should Canada buy kit from a hostile power? Canada’s military technology is integrated with America’s, so any operations without US approval would be complicated. The F-35 can’t function without its autonomic logistics information system, which is controlled by the Pentagon, which could limit its effectiveness in a showdown with America.
There may be pressure, therefore, to work more closely with other countries — to buy equipment from the Europeans, for example — although the natural inclination of the defense community in Ottawa is to stick with the Americans, whom they see as their friendly big brothers.
“I think there’s going to be a pretty heavy emphasis on the fact that you take Trump at his word, so you buy more American equipment, and you invest more in the US,” says Lagassé. “You try to integrate yourself more deeply into those supply chains, and that’s how you protect yourself. The other side is going to argue, well, now this is too vulnerable. We should try to become less dependent, take a step back.”
Not a lot of choices
But Canadians are limited in their options, says Graeme Thompson, an analyst with Eurasia Group, because at the forefront of military innovation with AI and advanced computing, there are only two real options: China and the US.
“There’s the Chinese ecosystem and there’s the American ecosystem, and basically Canada doesn’t have a choice there. It’s not going to be able to develop its own autonomous tech ecosystem or supply chains. It has to be plugged into the US side of things. There’s a great line, I don’t know who said it, but ‘the US is our best friend, whether we like it or not.’”
Canadians may want their government to do more to assert national sovereignty, but Lagassé doubts that sentiment is strong enough to disrupt the close military cooperation between Canada and the United States.
“The public may want us to do something differently, but … is the public willing to sustain the cost? Is the public’s attention going to be sufficiently focused so that political leaders see gain in pursuing that? Or does it just kind of evaporate once the tariff threat is no longer present?”
Once tempers cool, Canadian politicians will continue to use procurement deals as a way of currying favor with the Americans rather than a way of asserting independence. After all, they are Canada’s best friends, whether they like it or not.
U.S. President Joe Biden, Japan's Prime Minister Fumio Kishida, Australia's Prime Minister Anthony Albanese and India's Prime Minister Narendra Modi take part in a Quad leaders summit family photo in Claymont, Delaware, U.S., September 21, 2024.
US bolsters pacific alliance amid China concerns
In his final months in office, US President Joe Biden is looking to bolster the China-wary alliance known as “The Quad,” which brings together the US, Australia, Japan, and India. This weekend he hosted Quad leaders at his home in Wilmington, Delaware.
While the White House claimed the summit targeted no specific country, a joint statement condemned “coercive and intimidating maneuvers in the South China Sea,” a clear shot at Beijing. And in a so-called “hot mic” moment, Biden commented that “China continues to behave aggressively, testing us all across the region.”
Beijing, for its part, sees the Quad as a “threat and challenge to regional peace and security.”
The Quad summit announced expanded collaboration in maritime patrols, disaster relief, cervical cancer vaccines, tech fellowships, and clean energy projects.
The Quad hasn’t always been a top priority for its members – it lapsed almost entirely between 2008 and 2017. But when asked about the future of the group following the approaching departures of both Biden and Japanese PM Fumio Kishida, Australian Prime Minister Anthony Albanese predicted the Quad will endure, while Indian Prime Minister Narendra Modi stated “The Quad is here to stay.” To underscore that, he offered to host the group’s next gathering in 2025.Illustration of the graves at the Normandy American Cemetery and Memorial after the US ceremony marking the 80th anniversary of the World War II D-Day Allied landings in Normandy, in Colleville-sur-Mer, France, on June 6, 2024.
From D-Day to E-Day: Legacy of the Longest Day
At 5:52 a.m. on June 6, 1944, Private First Class Gene Sellers, a high-school football star who had just received a scholarship to play at the University of Arkansas, leaped from a plane to parachute behind Nazi lines in Normandy, France. As part of the Pathfinder unit, Sellers’ job was to set up a covert radio and communications base to help guide the rest of the American troops who would follow hours later as part of Operation Overlord. Tragically, Sellers drifted too far behind enemy lines and was spotted and killed, becoming the first American casualty of D-Day.
Later that morning, on a nearby strip of coastline, Jim Parks,of the Royal Winnipeg Rifles, joined 21,000 other Canadians attempting to land at Juno Beach. They immediately came under heavy German fire, and Parks had to jump into the ocean.
“I was a mortar carrier,” Parks says in a remarkable video you can watch at the Juno Beach Centre. Weighed down by all his equipment, Parks thought he would drown, but somehow he managed to swim to shore. Once there, however, he had to go back into the heaving ocean and drag out the bodies of men who’d been shot in the first minutes of the operation. There were 359 Canadians among the 4,000 Allied troops who made the ultimate sacrifice on that day.
The 80th anniversary of D-Day is being marked today by world leaders, including President Joe Biden and Prime Minister Justin Trudeau, both of whom are in France alongside the very few remaining veterans who witnessed the carnage.
This anniversary is particularly resonant as the West questions whether the alliances that have supported the world for 80 years are coming to an end. Will Election Day in the US lead to a Trump administration that backs out of NATO and moves toward realigning the global order around a new American isolationism?
On the one hand, NATO has never been stronger. With the additions of Sweden and Finland, the alliance that started with just 12 countries is now 32 members strong. The Russian invasion of Ukraine two years ago has reanimated the purpose of NATO and the need to protect and defend democracies. By that measure, alliances are stronger and more relevant than ever.
On the other hand, populist forces in the US are engaged in what might well be called “Operation Undermine”: an effort to defund NATO altogether. This week, Rep. Marjorie Taylor Greene (R-GA) got the support of 46 Republican members for her “Defund NATO” amendment to the Military Construction and Veteran Affairs appropriations bill. She sought to remove over $433 million of funding earmarked for NATO bases where US soldiers are stationed and to focus on what she calls the invasion of America on the southern border. Her amendment failed, but the effort to retreat into a radical form of US isolationism is real, robust, and ongoing.
Greene called out Canada, France, Germany, and others for failing to meet NATO’s 2% GDP defense target spending, which is a valid point. If you want insurance, you gotta pay for it.
As of this year, only 18 of the 32 countries in NATO will hit that target. Canada remains a laggard on this metric – an issue that will most certainly come up at next month’s crucial NATO summit in Washington.
This summit will mark the 75th anniversary of the alliance, and countries – including Canada – will be expected to make bigger commitments (though not enough to reach 2% in the near term) as the threats get bigger. But support will not be unanimous, and it will be interesting to see which Republicans show up and speak loudly about the importance of NATO given the fact that Donald Trump will secure the Republican nomination only days later.
Alliances, however, depend on trade as much as security. Since 1945, the small “l” liberal world order has been stitched together by global trade agreements; treaties on nuclear arms, space, AI, and climate; and myriad other issues. It has worked to achieve a period of peace and prosperity. But those structures are under threat by demagogues and isolationists who ignore their rules altogether.
The efficacy of the EU was deeply challenged by Brexit, while in North America, the next big challenge will be the 2026 renegotiation of the United States–Mexico–Canada Agreement on trade. If Trump is elected in November, he could rip it up, shredding a key alliance, hurting economic growth with tariffs, and sowing more distrust. Tariffs are always challenging to the global economy as they protect local industries but generally make goods more expensive and hurt local productivity. They also undermine global trade treaties.
That is why next week, Eurasia Group, GZERO’s parent company, and the Bank of Montreal are co-hosting a nonpartisan summit in Toronto, where they will take a deep dive into the US-Canada alliance on everything from trade and security resources to climate. This is the biggest trading relationship in the world, and ensuring that it is not disrupted is crucial for the prosperity of citizens in both countries. We will have a full report on the substance of next week’s US-Canada summit, including what guests from across the political spectrum had to say, in this newsletter.
D-Day is a reminder that alliances like ours are hard-won, obtained through the blood of people like Gene Sellers and seared in the memory of veterans like Jim Parks. Alliances like NATO allowed us all to secure our freedoms, turn former enemies into allies, and create an unprecedented period of prosperity and peace. They inspire generations of people to make sacrifices for the greater good and for the values we cherish in democracies. Those are all under threat, and today of all days, we might want to think twice before throwing away the rewards of D-Day for the politics of E-Day.
FILE PHOTO: Chinese Coast Guard vessels fire water cannons towards a Philippine resupply vessel Unaizah on May 4 as it made its way to the Second Thomas Shoal in the South China Sea, March 5, 2024.
Filipino fisherman fleet floats toward fraught waters
A flotilla of Philippine fishing vessels was put to sea Wednesday to assert sovereignty over the disputed Scarborough Shoal — where China has dozens of ships waiting for them. Chinese vessels have injured sailors with water cannons over disputed shoals in the South China Sea before, so Manila has dispatched Coast Guard vessels and an aircraft to monitor the situation.
The exercise is organized by NGOAtin Ito (“This is ours” in Tagalog), which plans to deploy symbolic buoys and leave supply caches for fishermen on the atoll. Anglers from the Philippines, Vietnam, and China have all used the low-lying lagoon to shelter their vessels from storms for centuries, but in 2012, Beijing used Coast Guard vessels to seize it. A UN tribunal rejected China’s claim in 2016, but Beijing has ignored the ruling.
China’s intransigence has created a dangerous situation. Both sides see their claims to the South China Sea as a sovereignty issue and aren’t willing to drop disputes over the uninhabited shoals. China’s behavior is already pushing the limit by immobilizing Filipino ships and injuring their crews, knowing Manila can’t respond effectively. If China should kill a sailor, however, President Ferdinand Marcos Jr. has said he could activate the defense treaty with the United States — which US Defense Secretary Lloyd Austin vowed to uphold last month — and China can’t play grabass with the 7th Fleet.
We’re watching to see how many civilian flotilla boats make it to the Scarborough Shoal, and how aggressively China’s Coast Guard responds.
United States President Joe Biden arrives prior to making a statement on Campus unrest from in the Roosevelt Room of the White House in Washington, DC on Thursday, May 2, 2024.
Biden clarifies xenophobia comments
On Friday and Saturday, India and Japan responded to President Joe Biden’s gaffe at a campaign fundraiser last week in which he called the two nations “xenophobic.”
The US governmentlater clarified that Biden’s comments meant to explain "that the US is a nation of immigrants and that immigrants make the US stronger” and did not have "the intent of undermining" the US-Japan relationship.
Still,Tokyo was not amused. Japan’s embassy in Washington said “the comments were not based on an accurate understanding of Japan's policies.”
New Delhi wasn’t impressed either. India’s Minister of External Affairs Subrahmanyam Jaishankar said India was open to people “who have a claim to come to India” and highlighted its strong economy.
Having described the US-Japan alliance as "unbreakable" and noted India’s “democratic character” and “diversity” during a state visit last year, Biden’s latest comments contradict previous efforts to sweet-talk these key Indo-Pacific allies. But considering their common geopolitical interests, especially when it comes to China, Tokyo and New Delhi are unlikely to let the gaffe sour their relationship with Washington.Republican presidential candidate and former President Donald Trump speaks at a campaign rally at Coastal Carolina University before the South Carolina Republican primary in Conway, South Carolina, on Feb. 10, 2024.
Trump's censure of defense spending “delinquents” triggers public backlash
Donald Trump can make his own claims to transforming the world beyond America’s borders – though whether it is by design, only he knows.
The frontrunner for the Republican presidential nomination made news last month when he said he would not necessarily protect NATO countries that did not hit spending targets.
He said he was asked by the leader of a “delinquent” nation whether he would protect them from Russian invasion, even if they did not meet NATO’s spending target of 2% of GDP. He said he replied: “No, I would not protect you. In fact, I would encourage them (the Russians) to do whatever the hell they want.”
The comments sent a chill through “delinquent” nations like Canada, which spends just 1.3% of GDP on defense and which, while it has said it aims to reach the 2% target someday, has taken no concrete steps to do so.
Now, the public is taking note. A new poll by the Angus Reid Institute found that slightly more than half of Canadians believe Canada should increase defense spending to 2% of GDP or more – a number that has remained constant since Russia invaded Ukraine in 2022.
However, a follow-up question mentioned Trump’s comments and asked again if spending should reach 2%. In that instance, support rose to 65% from 53%. There was a two-fold increase among younger women, who tend to recoil from all things Trump in most Canadian polls.
The survey said more than half of Canadians think Canada is falling behind with respect to its military power and diplomatic influence.
Increased pressure for more defense spending will put the Trudeau Liberal government on the horns of a dilemma. It has increased spending since coming to power in 2015 to fund new F35 fighter jets and 15 new frigates. But enthusiasm for the military has been lukewarm and in a recent “refocusing” of government spending, it announced it would cut expenditure on defense by more than $2 billion over the next three years. Hitting the 2% target could cost an extra $13 billion - money the Liberals do not have to spare.
Ian Bremmer, founder and president of Eurasia Group and GZERO Media, told Canada’s National Post earlier this month that the lack of concern about defense issues by politicians in Canada illustrates “short-termism and selfishness.”
“Canada has been allowed a free ride by dint of its geo-strategic position but also because there’s no consequences. It’s not as if the US has told Canada, ‘you’re going to be suspended from NATO if you don’t spend’, or ‘you’re not going to have access to US intelligence’ … None of that has happened (but), you know, maybe it should.”
Trump would likely concur.
Admiral Rob Bauer, seen here in Tallinn, Estonia, in September 2022.
NATO bares its teeth
Almost two years after Russia’s invasion, Ukraine’s existential battle continues. The static frontlines look a lot like a stalemate, and US public and political opinions toward further funding for Ukraine are in doubt, but fears of regional escalation remain. Just this week, for example, the Belarusian defense minister said he would put forward a new military doctrine allowing for the use of nuclear weapons.
In response to possible aggression falling into NATO territory, the alliance is hellbent on preparedness. Addressing fellow NATO leaders in Brussels on Wednesday, Admiral Rob Bauer, chair of the NATO Military Committee, warned of the need to prepare for an era “in which anything can happen at any time. An era in which we need to expect the unexpected.” Bauer and his colleagues are meeting to discuss attempts to do just that with Steadfast Defender, the largest military exercise in Europe since the Cold War.
Showing off friendly muscle. The NATO training exercises, to be held from February to June in Germany, Poland, and the Baltics, will involve more than 40,000 troops from across the 31-nation alliance (plus pending member Sweden). The work will test the troops’ ability to quickly mobilize in case of a Russian attack while showing off the alliance’s strength and unity.
Not to be outdone, Russia will also host military drills this year with “Ocean-2024,” bringing together all branches of the Russian Armed Forces and units of “foreign states,” according to Defense Minister Sergei Shoigu.
Smartphone with a displayed Russian flag with the word "Cyberattack" and binary codes over it is placed on a computer motherboard in this illustration.
NATO’s virtual battlefield misses AI
The world’s most powerful military bloc held cyber defense exercises last week, simulating cyberattacks against power grids and critical infrastructure. NATO rightly insists these exercises are crucial because cyberattacks are standard tools of modern warfare. Russia regularly engages in such attacks, for example, to threaten Ukraine’s power supply, and the US and Israel recently issued a joint warning of Iranian-linked cyberattacks on US-based water systems.
A whopping 120 countries have been hit by cyberattacks in the past year alone — and nearly half of those involved NATO members. Looking forward, the advent of generative AI could make even the simplest cyberattacks more potent. “Cybercriminals and nation states are using AI to refine the language they use in phishing attacks or the imagery in influence operations,” says Microsoft security chief Tom Burt.
Yet, in its latest wargames, NATO's preparations for cyberattacks involving AI were nowhere to be found. The alliance says AI will be added to the training next year.
“The most acute change we will see in the cyber domain will be the use of AI both in attacking but also in defending our networks,” said David van Weel, NATO’s Assistant Secretary General for Emerging Security Challenges. He noted that the bloc will also update its 2021 AI strategy to include generative AI next year.
We can’t help but wonder whether these changes will be too little, too late.