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Canadian Prime Minister Justin Trudeau and US President Joe Biden face a summer of discontent.
A summer of discontent
Facing elections and down in the polls, Joe Biden and Justin Trudeau have a lot of bogeys on their radar, but three are starting to stand out: the election call in Britain, Labor strife in Canada, and the rising and potentially self-defeating political popularity of tariffs.
1. Rishi Sunak’s Soggy Snap Election Surprise: Comeback Miracle or Cautionary Tale for Incumbents?
After 14 years of Conservative rule in Britain, Labour now has a chance to take the helm. Beleaguered Prime Minister Rishi Sunak held a rain-drenched (read: pathetic) fallacy of a media conference yesterday to announce a surprise July 4 general election. Why did he do it? Most analysts expected Sunak to drag it out until late fall, giving himself at least two years as PM – 14.8 times longer than the wilting 49-day head-of-lettuce term of Liz Truss, who Sunak replaced in 2022. They were wrong. The Tories are down 20 points in the polls, so when Sunak saw inflation finally fall to the target rate of 2.3% – a rare win – he reckoned it wouldn’t get much better in the months ahead. A summer election could mean low voter turnout, which usually helps the incumbent.
Joe Biden and Justin Trudeau are watching closely. Both are also incumbents facing low polling numbers and an electorate that believes (facts be damned) that things are worse than ever. If Sunak can somehow turn it around – and that’s a big “if” – it would answer a core question: Can falling inflation rates reinflate incumbent popularity? Will people ever believe things are getting better? Biden and Trudeau hope so.
Sunak’s July 4 election will likely end in ashes, not fireworks, for British conservatives, but Biden and Trudeau will pick through the coals and see what they can learn from the fire.
2. How to Fight Your Own Base Without Losing Their Vote?
Everyone reading this column will be familiar with the return-to-work debate. How often are you required to go back to the office post-pandemic, and how much do you want to work from home? Two days, three days, or more? I would be interested to hear your thoughts on that, and you can send them my way here.
In Canada, the debate has been reignited by the federal government’s decision to get public servants back in the office … wait for it … three days a week starting in September. Currently, they work two days a week at the office.
This is not a pay cut. This is not a downsizing. This is simply a back-to-work policy that is in line with almost every other industry. But the unions have gone ballistic, threatening a “summer of discontent” that could include disrupting borders.
File this one under the department of “With friends like these …” After all, the Liberal government has increased the size of the federal civil service by 42% since 2015. Last year, the feds signed a deal with the union leading the call to protest, the Public Service Alliance of Canada, giving them a pay increase. But here is the kicker: The deal both agreed on gave the federal government power to decide on back-to-office schedules. The same union that agreed to that is protesting it now.
There is no such thing as a permanent friend in politics, only permanent interests, but this is a classic stab in the front. Trudeau needs the public sector unions to win a federal election in the next year, and like Sunak he is nearly 20 points behind in the polls. He does not want to pick a fight with a powerfully motivated base. Except for one problem: This is a fight he can win because this is a fight the public supports.
In a new poll out today, Angus Reid found that 50% of Canadians agree with the Federal government and want workers back in the office. Voters over age 55 — the kind who show up at polling stations – really can’t stand the union position, with 79% of them saying “get back to the office.”
Meanwhile, 28% of Canadians “view federal government employees as overpaid,” while 75% say federal workers “have better working conditions than others,” including 73% of Liberal voters. In other words, Justin Trudeau could win this fight and would have the support of the electorate, but he needs every part of his base possible, so he is desperate to avoid this one as well.
The same is true for his main opponent, Conservative leader Pierre Poilievre. You might expect him to be taking huge swings at unions and entitlements as his goal is to cut the size of government, but he’s staying out of this one as much as he can. His own riding is in the Ottawa area, the ground zero of public servants, and he doesn’t want their ire turned on him, which could hurt his electoral chances and take the pressure off Trudeau. So who is afraid of public servants going back to work three days a week? Everyone.
Like Biden, who supports Israel’s fight against Hamas but is now losing the support of young voters, Trudeau has to be careful about the battles he picks. Since 2022, he has had a supply and confidence deal with the far-left NDP in order to remain in power. That means the public servants are core to his survival. Despite the polls, if the union folks do have a summer of discontent, Trudeau will be in the worst possible position for a politician: fighting a two-front battle, with Conservatives on the right and the union on the left.
Finally, a half note on tariffs, as Biden is also caught in a pincer move here. As Donald Trump pushes for more trade tariffs to protect American workers, (remember he put a 25% tariff on steel imports), Biden is keeping up the tariff pace, especially with ones directed at goods from China. This week, he announced tariffs on EVs, batteries, and other Chinese exports.
Protectionism is clearly good politics in the US, especially when it comes to China. That is as much about geopolitical rivalry and security as it is about economics, but in general, tariffs are self-defeating economics that lead to higher prices and inflation.
No amount of political hustling on talk shows is going to upend the logic of basic economics. Biden is jammed: On one hand, the average American believes things are worse than ever, but on the other they want him to stand up to China and protect the American worker. Does he risk higher prices and lingering inflation with more tariffs or does he risk alienating his labor base by pushing back against economic isolationism that is suddenly so faddish? For now, he is tiptoeing toward tariffs and trying to avoid the price blowback.
The summer of discontent for Biden and Trudeau is just getting started.