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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.
Conservative Party of Canada leader Pierre Poilievre speaks in the House of Commons on Parliament Hill in Ottawa, Ontario, on Dec. 3, 2024.
Conservative leader Pierre Poilievre goes after fentanyl
Poilievre, who often blames Trudeau for soft-on-crime policies, said he would introduce mandatory life sentences for fentanyl traffickers. “I will lock up fentanyl kingpins and throw away the key. It's like spraying bullets into a crowd — even if you don’t aim, you will kill people. The penalty should be the same as murder.”
Canadian courts have often ruled that mandatory life sentences for any crime violate the Charter of Rights and Freedoms, but Poilievre has said he would override the courts if necessary to get tough on crime.
The proposal comes as the Conservatives search for new messages to use against the governing Liberals. The party has been connecting with voters for two years by launching attacks against Trudeau and the unpopular consumer carbon tax. But Trudeau has announced that he is resigning and his likely successor, former central banker Mark Carney, has promised to get rid of that tax.
The polls have tightened slightly after many months of downward motion for the Liberals, and they are still moving. A poll of Quebecers shows many have suddenly decided to shift their support to the Liberals, and more would do so if Carney is leader.
Expect Poilievre to talk about crime and find new ways to talk about the cost of living, and keep an eye on volatile public opinion.
Why is Trump starting a trade war with Canada?
Ian Bremmer's Quick Take: A Quick Take on the US-Canada relationship, which, right now, is on ice. And I don't mean the hockey kind. Trump, the tariff-man, cometh. Some 25% across the board on Canada, on Mexico too, except on Canadian oil, that's only 10%. Why? Why 10% on oil? Because that's actually what makes up Canada's surplus with the United States. So, wouldn't you actually hit that sector harder if you were trying to balance the budget? And the answer is, of course, no. That's like saying Canada's a friend and China's an enemy, and so wouldn't you hit the Chinese harder than the Canadians instead of the Chinese only 10%, the Canadians 25%, Mexico 25%, but that's also not the case. Why? Because China can cause a lot more damage to the United States. And so therefore, President Trump has to be more careful. Canada, Mexico, a lot smaller, much easier to punch down against the Canadians, even if it's technically punching up, given where they sit geographically. And except for oil, where the United States gets 4 million barrels a day, which is much more than the US gets from the rest of the world combined. And that quality of crude, only replaceable in terms of the kind of crude it is from Venezuela with massive sanctions and run by a dictator, and they've destroyed much of their own oil sector, so that's not a capability, which means that the Canadians can't send it anywhere else, the Americans can't buy it anywhere else, but the US is more powerful, so Trump thinks he can get away with it.
So, why? If it's not about oil and it's not really about the trade surplus, then why is it that Trump is doing this? What he says, is it's about fentanyl and illegal migrants, that the Canadians are not policing their border. Again, doesn't make a lot of sense. It makes more sense for Mexico, and again, there's a big question about whether the smartest thing to do is, you know, shoot first and ask questions later, or negotiate credibly first and not undermine the economies, the much weaker economies of your friends. But when it comes to Canada, the argument doesn't make sense at all. Fentanyl, we're talking about on average every year about 10 kilos of fentanyl that is interdicted at the border, which is, by the way, that's every year from Canada. That's less than what you see in Mexico every day. So, it's way under 1% of the total.
Illegal migrants, it's a larger problem from Canada. Here you're talking about roughly 5% of the interdiction on the northern border of illegals coming into the United States compared to 80% from Mexico, and the remainder mostly by sea and occasional air transit. And yes, I'm talking about what is being stopped, not what's getting through, which you can't measure as easily, but it's not like Homeland Security isn't tracking where illegal migrants are actually coming from. And this is not anywhere close to the issue from Canada than it is from Mexico. But that's not really the issue here either because national security issues are more likely to hold up as legal reasons for the US president to invoke IEEPA, the International Emergency Economic Powers Act. And so, if you're worried that the court's going to strike down your tariffs because you don't actually have the law behind you, this is the way you couch it.
And also, Trump doesn't really care what arguments he's using. It's to show that he can't and to get his supporters to go with him to make better deals for the US no matter what. But the timing here is strategically horrible for Trump. Canada is at the beginning of an election, and this from Trump is remarkably unifying for the Canadians. Using fake news to justify a trade war and then leaning in to say that Canada can join as a 51st state if they want. Now, there are plenty of Canadians that over the last eight years have supported Trump. Remember the trucker strike, for example. I mean, I certainly see it and I hear it on my trips there, but these are not America First, Canadians. These are Canada First, Canadians, and they don't want the Canadians to fold to Trump. In fact, the only people that I hear saying quietly that they wish the Canadians would fold are the globalists.
They're the corporate and financial elites in Canada that just really want this to go away because it's hurting their profits. And they're trying to find a way to say, "Well, just give him a win. It'll be okay." But I mean, in terms of the average Canadian, no, no, no, no, no, they want their political leaders, whether it's the Conservative Party or the Liberal Party, to stand up to Trump. And that's why you've seen in the last 24 hours, Liberal leaders, whether it's Trudeau, or it's Chrystia Freeland, or Mark Carney, who are the two that are contesting for the premiership, or it's Pierre Poilievre leading the conservative party, or Doug Ford, head of Ontario, who's also a major conservative leader in Canada, and they're all saying the same thing, which is they've got to stand up for Canada, to hit Trump back hard, that they can't take this laying down. And these are also the people that are booing the US National Anthem at hockey games across the country in Canada right now, which I have not seen happen in Canada, frankly, since the US war in Iraq.
I am not someone who opposes tariffs as a matter of course. I think that tariffs can be a useful tool of economic and national security influence. They can help to deal with national security concerns. They can help nudge rebalancing of economies for domestic reasons that matter politically. And we saw some of that during Trump's first term. We saw some of that during Biden's term. But for Trump's first term, he then had strong economic voices internally that were also moderating his behavior, that stopped fights from becoming long-term destructive. People like Robert Lighthizer, who was the US trade rep. Jared Kushner, who was a senior advisor, had a lot of access and influence of course to his father-in-law. Steve Mnuchin, the Secretary of Treasury. That's not remotely the case this time around. That's not what you're seeing from Treasury Secretary Bessent or from Commerce Secretary Lutnick. Much, much weaker, much more divided forces internally.
So instead, you are taking on America's closest friend, most trusted ally, not to mention critically integrated economy with the United States, and you are hitting them in the teeth harder than you are hitting anyone else. And I would argue that this is a big mistake, long-term, for the United States and frankly for everyone but America's adversaries, who will take advantage of weakness of US allies that have been historically very strong, and that have been harder for adversaries to deal with.
So what is it that the United States stands for? And I go back, I think when I was a kid and when I was starting my studies, 1989, Wall comes down, and around the world, people saw that, and they weren't all pro-American, not by a long stretch, but they would still stay that the United States had values, that it was trying to stand for freedom and liberty and a free market economy. Not always consistently, but nonetheless, the general sense that that was something that the United States wanted to be seen as promoting. And today, you go to Canada, or you go to Denmark, or you go to Panama, or you go to Japan, or South Korea, the European Union, you name it, and you ask people what America stands for, and they say, "Power," and they say, "Money," and they specifically say, "Pay for play." And that is penny-wise and pound-foolish for the United States.
And I don't know how US Canada is going to ultimately resolve itself. I don't think it's going to be resolved quickly. I think there will be a lot of economic pain on both sides, a lot more for the Canadians than the Americans because they're in a weaker position, but sooner or later, I think economic interest on both sides will lead to a deal. And I think, I expect that this is not going to lead to a permanent trade war between the Americans and the Canadians, but you would have to go back to pre-war times to find a major country doing more than the US is doing right now, and President Trump is doing right now, to undermine America's closest alliances. That is what's happening here. And I think long-term, this is really not in the interest of the United States, in the interest the American people, and it's certainly not in the interest of having a sustainable and stable world.
So that's it for me. I'll talk to you all real soon and be good.
Putin makes a stunning accusation at Trump
Putin doesn’t like that Trump is copying his style. So he does what anyone would do ... invade Canada. #PUPPETREGIME
Watch more of GZERO's award-winning PUPPET REGIME series!
Canada's fight with India over Sikh assassination heats up again
Ian Bremmer shares his insights on global politics this week on World In :60.
What is the role of the United Nations in the Israel-Gaza war?
Well, it's actually quite a few roles. One, the General Assembly and the Security Council are principle places where you get to see how the various countries around the world respond to the war, what their political positioning is, so the comparative isolation of the United States on the Security Council, for example, what countries do, don't stand with Israel, the Palestinians of the 194 member states around the world? Secondly, the UN is the principal organization that delivers humanitarian aid on the ground in Gaza, staffed overwhelmingly by Palestinians, thousands of them. That's been controversial because a number, something like seven or eight, have been found to have been involved in the support for the attacks on October 7th, the terrorist attacks. And then, finally, you have UN peacekeepers, thousands of them, on the ground in southern Lebanon, with many countries around the world participating. That's the Security Council that's responsible for that but has not been particularly effective at ensuring that the Security Council resolutions, creating a buffer zone, pushing Hezbollah back, and not allowing them to strike Israel, have actually been implemented. So lots of places that they have a role, you learn a lot about the world as a consequence, but it's not like they have a lot of power or a lot of money.
Why did Canada expel Indian diplomats?
Well, it's a fight that's been going on for over a year now with the assassination of this Sikh terrorist that India was found to be behind on sovereign Canadian territory. There had been a conversation between Modi and Trudeau on the sidelines of recent G20 Summit. It looked like facilitated by the United States, that that relationship was improving. It has fallen apart again. One of the things, I mean, there's more information that's come out in Canada about what India's role has been interfering with Canadian politics and citizens, but also the fact that Trudeau is in really tough shape domestically. He's thinking that a fight with India right now may help him in terms of popularity. I don't think it's going to work, but that certainly is not irrelevant.
How important is Elon Musk in the US election?
I don't think he's very important to the outcome. Obviously, Twitter/X is significantly oriented towards the right in terms of both Elon and what's being algorithmically promoted, but it's a lot smaller for US citizens than TikTok, which is younger and is more focused to the extent there's a political slant on the left. So if you ask me, which is going to matter more? I suspect TikTok will bring out more voters than Twitter/X, will. I think you on, is important in the election because he has personally done so much to promote disinformation, and it's making it harder for the average American to know what they can trust, what's a trusted source of media, what's a trusted source of information, what they should believe around vaccines, around FEMA response to a hurricane, around whether or not the election is free and fair. And I'm worried deeply that there's much greater likelihood of violence in the United States on the back of his personal decision of how to run Twitter/X than there would've been otherwise. We'll be focused on this very closely.
What the France and UK elections mean for the West
Major Western democracies like France, the UK, Canada, and the US are on the verge of sweeping political change, but how will upcoming elections impact our collective ability to deal with the world’s biggest challenges? How will Western allies approach issues like climate change, the AI revolution, and cyber defense in an increasingly fractured world? Mark Carney, former Governor of the Banks of England and Canada and current UN Special Envoy on Climate Action & Finance, joins Ian Bremmer on GZERO World for a hard look at three of America’s closest allies: France, Britain, and Canada.
“We're operating in a world where security is paramount. You need resilience,” Carney tells Bremmer, “You need to look to those countries where you have common values and you need to reinforce them.”
Carney and Bremmer also delve into the strategic importance of the US-Canada relationship and how our neighbor to the north can be a reliable, strategic partner in many critical areas, including national security and climate transition. He warns Canadians and Americans shouldn’t “hit the snooze button” when it comes to strengthening US-Canada ties and stresses that Canada can be a critical partner in providing lean energy, crucial minerals, and AI expertise. As for Carney’s rumored political future as a potential Liberal Party leader? Well, you’ll just have to watch the interview to find out.
Catch GZERO World with Ian Bremmer every week on US public television (check local listings) and online.
How political unrest across the West will impact the world: A conversation with UN's Mark Carney
Listen: On this episode of the GZERO World Podcast, major Western democracies like France, the UK, Canada, and the US are on the verge of sweeping political change, but how will upcoming elections impact our collective ability to deal with the world’s biggest challenges like climate, AI, and cyber defense? Mark Carney, former Governor of the Banks of England and Canada and current UN Special Envoy on Climate Action & Finance, joins Ian Bremmer to take a hard look at three of America’s closest allies: France, Britain, and Canada.
Upcoming elections in France and the UK could mean big changes for the West, similar to the aftermath of Brexit. Carney says there are still many aspects of the UK-EU relationship that need to be recalibrated. He also stresses the strategic importance of the US-Canada relationship and Canada’s role as a reliable partner in everything from national security to critical minerals to fighting climate change.
Subscribe to the GZERO World Podcast on Apple Podcasts, Spotify, or your preferred podcast platform, to receive new episodes as soon as they're published.
Hunter Biden's convictions won't derail his father's re-election bid
Ian Bremmer shares his insights on global politics this week on World In :60, live from the Toronto US-Canada Summit.
What are the implications of Hunter Biden's convictions for his father's presidential campaign?
You know, it's a little bit of tit for tat. You're going to see a lot of Republicans saying, “See the Biden crime family! Look at this guy. I mean, he's a convict.” It's ugly. It's embarrassing for the Biden family, of course. But at the same time, it's not very significant charges and it certainly doesn't link directly to President Biden. Five months away, are people going to be talking about this or Trump's 34 convictions, the weakest of the cases that he's actually facing? I suspect neither of them are going to matter very much, even though, on balance, Trump's is the one that should matter more.
Will recent EU elections bring a dramatic shift to Europe or more of the same?
Well, overall, the European Parliament looks a lot like the old European Parliament. A few more seats for the right wing, but the far-right is not very aligned, doesn't work cohesively. I still think Ursula von der Leyen is going to be, yet again, European Commission president. And in many countries the populist, the anti-establishment did a lot worse. In Sweden, for example, in Portugal and others. On balance, there's not much change here. Two things that matter one a little bit is that Schulz and his Social Democrats really underperformed. The German economy not doing well, he's not seen as much of a leader. A three-party coalition, Germany, largely centrist and pretty stable no matter what. Much bigger: France. Macron's party, historically, got pasted. That's why he's called for parliamentary elections in just a few weeks. And when they happen, if Le Pen's party, the National Rally, wins and they're able to put forward a prime minister, there's is a major, major problem for governance in France and for the need of anything that the EU has to have parliamentary approval in France to get done, and that includes the Ukraine problem going forward.
How Canadians viewing the impending Biden Trump rematch?
You know, in some ways a little more comfortably than they did the last time around because the US-Mexico-Canada agreement's already in place and Trump got it done with this Canadian government. So, I think that they feel a little like, “Hey, we dealt with them once, we can deal with them again.” There's much more strategy and strategic alignment in the importance of the US-Canada relationship today than there was five, 10 years ago, in part because on China they're much more aligned, on things like, major wars outside of this part of the world, they're much more aligned, on Haiti, they're much more aligned. But also keep in mind that Canada's also facing an election in a year. And right now, it looks like the Tories, the conservatives in Canada, would win big, ahead by over 20 points. In which case you'd have a Canadian government and a US government, if Trump were to win, that would be very aligned. Just on a very different part of the political spectrum. Either way, very friendly and very stable relationship, which is more than we can say for most of them around the world.