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Six issues that will shape US-Canada relations in 2025
In December, Justin Trudeauwarned that dealing with President-elect Donald Trump would be “a little more challenging” than last time around.
With Trump threatening massive tariffs that would hit Canada hard, taking aim at the country’s anemic defense spending, criticizing its border policy, eyeing its fresh water, and more, 2025 will indeed be a rocky time for US-Canada relations. But Trudeau might not be around for much of it. Down in the polls and facing calls from a majority of his caucus to resign, Trudeau is mulling his future and could resign any day.
Conservative Party leader Pierre Poilievreis heavily favored to win the upcoming federal election, which would make Trump his challenge – a challenge Canadians, in fact, prefer the Conservative leader take on over his Liberal opponent.
Whoever leads Canada in the months to come, these are the top US-Canada issues they’ll be focused on:
1. Trade and tariffs
Trade between the US and Canada is worth over $900 billion a year, so the exchange of goods and services will be a top issue regardless of who’s in office. But Trump’s threat to levy a 25% tariff on imports has taken it to another level. The tariffs would raise prices in the US and hit Canadian industry, particularly the energy, automotive, and manufacturing sectors, with added costs. The Canadian Chamber of Commerce predicts the tariffs, and Canadian retaliation, would cost Canada roughly CA$78 billion – 2.6% of its GDP – a year and lead to recession. Canadian exports to the US would plummet, says the Chamber, with a predicted 60% drop in the mining and quarrying industries, 39% in m0tor vehicles, and 27% in metals – which would be costly for both countries. Ontario, the country’s most populous province and home to its auto sector, would be hit especially hard – which is why Premier Doug Ford is threatening to stop energy exports to the US if Trump proceeds with his plan.
The economic harm to Canada would be exacerbated by the fact that Ottawa would likely respond with its own retaliatory duties. The Trudeau government is working to secure an exemption from the policy for Canada but hasn’t managed to yet. But energy experts say they expect the tariffs won’t apply to Canadian oil either way.
Graeme Thompson, a senior analyst with Eurasia Group’s global macro-geopolitics practice, says Trump’s tariff threat is real but also part of the incoming president’s strategy. He’s trying to gain concessions on issues of concern, including border security and the (very limited) flow of fentanyl from north to south, and the US trade deficit with Canada ahead of the looming renegotiation of the USMCA.
Thompson notes that Canada is in a weak bargaining position given that it’s utterly dependent on its trade relationship with the US, “and for that reason, doesn’t have a lot of cards to play.” He also expects that even if Canada does secure an exemption on tariffs, Trump will be prepared to threaten them again in the future as leverage in any given negotiation.
“This is not a one-and-done,” Thompson says. “I think this is a mode of operations that will repeat several times for the next four years over a variety of issues.”
2. A (metaphorical?) border wall
Trump has made border security central to his tariff threat, arguing that the flow of fentanyl and illegal immigrants across the border poses a public safety threat to the US. Canada is already developing a border security plan to respond to Trump’s concerns. It’s also scrambling to prepare for a possible rise in asylum claims – which will exacerbate the current backlog – and irregular border crossings if Trump goes ahead with his plan for mass deportations.
Canada was already revising its immigration policy before Trump won, but it may introduce further restrictions – and continue to toughen its rhetoric – in the coming months. After Trump’s win, Immigration Minister Marc Miller said “not everyone is welcome” to go to Canada, emphasizing that his government was ready to work with the Trump administration on border security. At the same time, Foreign Affairs Minister Melanie Joly said Canada was sticking to its new immigration plan, which would see fewer newcomers admitted to the country.
The Trudeau government reduced its immigration targets in October and cut the number of international students it welcomes. Its border security plan includes CA$1.3 billion in spending around five pillars that include a commitment to “detecting and disrupting the fentanyl trade” and “minimizing unnecessary border volumes,” including an end to flagpoling – or allowing temporary residents to leave the country (typically to the US) and return immediately to access immigration services at the border. But that may not be enough.
Thompson says leaders of the current government are “overestimating their ability to manage what is coming.” He notes future demands from Trump could include “tighter screening of regular immigrants into Canada. That means that much like with tariffs, the Canadian government may end up managing cascading demands from Trump, so no single promise or plan will likely be sufficient to placate the incoming US president.
3. Defense spending and securing the Arctic
US administrations, including Biden’s, have pressured Canada to increase its defense spending and hit NATO’s 2% of GDP target for years. In April, the Trudeau government outlined a plan to boost spending, focused in large part on building armed forces capacity in the Arctic. The new initiatives total roughly CA$81 billion over two decades and will push the country toward 1.76% of GDP by 2030. In December, the government announced a further adjustment to its Arctic presence, which will include more air and naval equipment, and a renewed cooperation strategy in the region with the US in the face of Russian and Chinese regional interests.
So far, Trump administration officials and other Republicans seem unimpressed with Canada’s defense plan. Former Trump ambassador to Canada, Kelly Craft, said the country could “do better.” That means spending more – and faster – especially since Trump has reportedly considered asking NATO allies to spend a whopping 5% of GDP on defense spending. He’s also threatened to leave countries that fail to spend more to fend for themselves against foreign aggression.
Philippe Lagassé, associate professor and Barton Chair at the Norman Paterson School of International Affairs at Carleton University, says Canada could raise military spending by increasing pay, boosting operations expenditures, and contracting more for services. He says procurement of military hardware would take longer. But in the face of financial constraints, such new spending would require raising taxes, growing the deficit, cutting other programs, or some combination of the three – which could prove a challenge for the current government or its eventual replacement.
Arctic defense may prove to be a smoother issue. “The US has been trying to get Canada to do more in the region for a while,” Lagassé says, “and we've responded to that. I don’t see that as a point of tension.”
“If anything,” he adds, “the US will be glad if we just get our act together because their sovereignty considerations up there are less than ours, and they have capabilities up there that we don’t, but they do want us to actually get our act together around it.”
So, while Canada may feel the pressure on defense spending – and may need to come up with a faster, heftier plan to placate Trump, it can always point to progress in the Arctic and is likely to do so.
4. Water, water everywhere?
In September, Trump floated an idea to solve California’s drought problems: import water from British Columbia. As Trump put it, the province has “a very large faucet” that, once turned, could supply drought-stricken US states with fresh water. Experts point out that Canada doesn’t, in fact, have water to spare, and Canada can’t just turn on a “faucet” to divert water to the US.
The water Trump referred to, coming from the Columbia River, is already spoken for, in part through an existing treaty between the US and Canada – the Columbia River Treaty, which sets out rules governing flood controls, dams, and hydroelectric power generation.
That arrangement is in the process of being modernized to account for new developments, including climate change. The Biden administration and the Trudeau government recently reached an agreement in principle after years of work that began during the first Trump administration. But this time around, should Trump decide to maintain an interest in water flows north to south, the terms of the treaty could – like free trade – come back up for negotiation, with the faucet on the table.
5. Critical minerals. It’s in the name
The US and Canada share several other areas of cooperation and competition, but one is of immediate interest that could incentivize working together. Both countries are spending big on critical mineral development, including co-investments in a development in Yukon.
Critical minerals are central to cellular phones, the electric vehicle industry – in which both the US and Canada are investing heavily – and national defense. So whatever other tensions shape US-Canada relations, cooperation on critical minerals will remain a shared goal, especially as the two countries look to rival Chinese and Russian interests in related sectors.
6. Setting limits on Big Tech
Both countries are also taking on big tech giants, such as Google, through anti-monopoly investigations lawsuits. Still, the US is pushing Canada to drop its 3% digital services tax on big tech companies, including Google’s parent company Alphabet. The Biden administration requested a dispute resolution process for the tax, claiming it unfairly targets big US tech firms. The Trump administration is likely to press the issue, too, which may leave the policy as a pawn in one set of negotiations – say, over tariffs – or another.
Does Canada have any leverage to rely on? Canada has some cards to play against Trump, but it’s not clear who’ll be playing them. The Trudeau government, down roughly 25 points in the polls, is not long for this world – and Trudeau himself may resign any day. The country is due for an election by the fall, but it could come much earlier.
Regardless of who’s in power, however, they’ll likely deploy the playbook from the last time Canada had to manage its relationship with Trump. That means working contacts in states, particularly border states in which the Republicans have an interest in winning or currently govern and contacts in Washington. Then, they work the message about Canadian, and shared, interests up to Trump. There’s also the threats of retaliatory tariffs and halting certain trade, like Ford’s threat to cut off energy to border states.
Together, pulling these levers may yield some results, but Canada is in for tough negotiations and is unlikely to emerge from them unscathed.
President-elect Donald Trump attends the 2024 Senior Club Championship award ceremony at his Trump International Golf Club in West Palm Beach, Florida, back in March.
Don’t Panic: 4 Rules for Responding to Trump Threats
Amid all the geopolitical chaos, the best advice of the year: Don’t panic.
As they dined at Mar-a-Lago on a main course of tough, over-cooked tariff talk, President-elect Donald Trump suggested to Canadian Prime Minister Justin Trudeau — in what the Canadians present later called a joking manner — that Canada might make a good 51st state. Naturally, people freaked out. First, Trump threatens to destroy the Canadian economy with 25% tariffs on everything, and now this? An invasion?
As the breathless coverage spilled over the international media, my colleague Gerry Butts went on Bluesky with a message: “Trump used this 51st state line all the time with Trudeau in his first term. He’s doing it to rattle Canadian cages. When someone wants you to freak out, don’t.”
It is sound advice. Don’t freak out.
Canada is no more going to become the 51st state in the next four years than California, British Columbia, and Oregon are going to break away and become Cascadia. Jokes are not policy.
So what’s up?
Trump is a zero-sum negotiator. He uses the powerful leverage he has to create “I win, you lose” deals. Threats give him a real negotiation advantage before the actual negotiations happen. That is the prerogative of the Big Dog countries, especially those run by strongmen, mercantilist leaders like Trump. Trump threats are simply the expected prelude to any deal. But what is real and what is rhetoric? And how to respond?
Invasion: Rhetoric. Dismiss.
Tariffs: Real. Discuss.
Rule One: Stick With Facts. Don’t get caught up in the torrent of tweets and taunts. Don’t give anything away until the actual negotiations start. Facts are your best friends.
Facts? Really? You might think that since Trump has ushered in the post-fact world, facts are a diminishing currency. That is a dangerous bet. For example, at the root of the 51st state jab are the much more dangerous Trump threats to slap 25% tariffs on all goods coming in from Canada and Mexico. Trump based this threat on what he says is the heavy flow of fentanyl and illegal migrants across the border.
Initially, that threat caused panic. Alberta Premier Danielle Smith immediately went into appeasement mode, telling the CBC’s Power and Politics, “It’s incumbent, I believe, on the federal government, along with all of the provinces, to work together to address those concerns if we want to be able to avoid these devastating tariffs that’ll hurt all of us.”
She’s not wrong that the Trump rhetoric needs to be addressed, which is why Trudeau immediately got on a plane and took his team for a strategic schmooze fest at Mar-a-Lago. Trump prizes personal relationships above all else, so a connection matters.
Rule Two: Don’t Take It Personally. Even though Trump has a long-standing sour relationship with Trudeau — he’s even called the Canadian PM “two-faced” — in Trumplandia, that doesn’t matter. His relationships with people change like the weather in the Rocky Mountains: If you don’t like what is happening, wait five minutes. It will change.
Trump is quick to anger and quick to forget. Can he get over his past irritations with Trudeau? Well, he got over JD Vance comparing him to … that guy who ran Germany in the war. He nominated former rival Marco Rubio, whom he used to mock as “Little Marco,” for secretary of state. Trump doesn’t hold the very grudges he creates, and the best way to get over that is to find a way to make nice, show loyalty, and suck up. That’s what the Trudeau visit was all about. Feelings first. Facts second.
That doesn’t mean giving anything away. And that’s where the facts come in. On fentanyl and border security, the reality is far different than the rhetoric. Canada is hardly a major threat to the US on either issue.
“The facts are hard to deny,” Kirsten Hillman, Canada’s whip-smart ambassador to the US, pointed out on X. “Last year, 0.6% of illegal crossings and 0.2% of fentanyl seizures by US authorities were at the northern border.”
That’s right. Only .2% of fentanyl seizures happened at the Canadian border. If you want to go deeper, check out the latest stats from the US Customs and Border Protection agency, which shows that the problem of fentanyl is largely at the Mexican border, not the Canadian one.
In fact, the CBP’s top official, Troy Miller, has an extensive interview on the US government website about fentanyl coming over the US border. Guess what? He mentions the southwest border 21 times and Mexico specifically seven times. Canada? Not a word. Canada and the northern border are not mentioned a single time. Why? It is simply not a major issue.
Rule Three: Know What Actually Needs Work. On the other hand, illegal migration is a real issue, both internationally and domestically. There is a key section along the US-Canadian border called the Swanton Sector (which covers parts of New York, Vermont, and New Hampshire), and illegal immigration rates there have spiked according to stats from the CBP. But how bad is it? 23,000 arrests were made at the northern border between October 2023 and September 2024. That is up from 10,000 in 2023. Compared to Mexico, where over 47,000 arrests were made in November of this year alone, it’s a trickle (700 were arrested in November in Canada). Still, politically it is an issue Canadians will have to deal with if they want to avoid tariff punishments. Doing nothing is not an option.
Illegal migration is now driving election outcomes in France, Ireland, Germany, and many other places, so this ain’t a surprise. But proportionality matters, and the facts that prove that point can get lost in the storm of threats. It is critical this doesn’t happen.
Rule 4: Follow the Money. There is a high probability that a tariff-driven trade war — or skirmish — is coming very soon, and the facts here will be crucial. After all, high tariffs will hurt the very people Trump represents — namely, American workers. High US tariffs on Canadian goods will raise prices for US consumers and make life for them more miserable. That is a political loss for Trump.
Over 34 US states rely on Canada as their major trading partner, so expect state governors to pressure the White House to ease up on the tariff talk so as not to jeopardize the bilateral trading relationship that sees over US$2.7 billion worth of goods and services crossing the border each day.
To protect that, Canadian leaders will have to think hard about decoupling their trade relationship with Mexico, especially when the new US-Mexico-Canada trade deal gets renegotiated in 2026. The politics of the southern border have always cross-infected the northern one, but if the infection threatens to be economically fatal, there will be a change. The famed three amigos might be reduced to two.
But that is not for right now. Trade deals are not made on social media; they are negotiated face to face, when genuine swaps and deals can happen. Better to build relationships now over dinner, and serve up facts for dessert.
And don’t panic.
It hasn’t even started yet.
Hey, progressives, it’s time to look in the mirror
He has the look of an aging but determined Rafael Nadal trying to make one last comeback. He heaves his body back and looks poised to crush a forehand, as he has a thousand times before. This time, however, it doesn’t go as expected. To his utter shock, the ball hits the net and limply falls to the ground. “Why?” his look implies. “Why are we losing here?” He resets to try for another point, but he nets it again.
Only this isn’t Nadal.
It’s Mitch Landrieu, the former mayor of New Orleans and current co-chair of Joe Biden’s reelection campaign. Landrieu, like so many progressives looking for another Obama moment, cannot understand why so many people are choosing Trump over Biden. It’s like there is an invisible, Don DeLillo-esque cloud hanging overhead with the words, “How are we losing to him?”
Make no mistake, Landrieu is very good at his job and not only deeply understands Biden’s policies — after all, he helped oversee the trillion-plus-dollar infrastructure bill — he’s also a Biden believer. That means he can’t stand Donald Trump. Or, more precisely, he cannot understand why so many people like the former president.
So here he was, playing the anti-Trump hits on stage in Toronto at our US-Canada Summit to a room that just kept shrugging: 34 felony convictions; sexual assault charge; Jan. 6 insurrection; can’t keep staff; Trump’s own attorney general, Bill Barr, called his claims of a stolen election "bogus.” Periodically, Landrieu would look at the crowd, seemingly exasperated by the lack of emotion, and ask, “Why are we normalizing Donald Trump?” But he never asked the more painful question: “Why are our policies so unpopular?” He was like the aging athlete, baffled as to why he is still not winning.
The Dems’ case against Trump has been made countless times, but it simply is not working. At Eurasia Group, we have the odds of Trump winning at 60%. David Axelrod, the former Obama campaign guru and current CNN political commentator, was with us watching Landrieu. As I wrote last week, I asked Axelrod whether Democrats need to spend more time reflecting on why their policies are not connecting with voters and less time trying to convince people that Trump is a big baddy.
“Absolutely,” he responded, going on to describe how Democrats have lost touch with large swaths of the American public, content with lecturing them in condescending tones about how to be better citizens and “more like us” — meaning the folks who run around Washington telling people what to say and what not to say. Democrats are like the kid in the front of the class with his hand up all the time. He may have the right answers, but no one likes him.
“Strong and wrong beats weak and right,” Axelrod said, repeating a Bill Clinton line. And Biden looks weak. Not only that, Axelrod made the point that Democrats focus too heavily on what they have done in the past, not what they will do in the future.
What’s next beats what was, and progressives are losing on that score. Anew poll from the American Survey Center found that “Nearly six in 10 (58 percent) say America’s best days are behind it. Forty percent say America’s best days are yet to come.” This marks a huge change since 2020 when most Americans were optimistic about the future.
As Daniel Cox writes, while most candidates run on optimism, Trump runs on pessimism because it’s connecting with his large constituency — primarily white male voters. “Forty-three percent of Americans who believe people are not to be trusted have a favorable view of Trump compared to 28 percent of those who say people are generally trustworthy,” he writes. It’s not morning again in America, like under Ronald Reagan; this is Trump’s American carnage, reflecting how many people actually think.
Incumbents around the world are facing “Thelma & Louise” moments right now: If they keep doing what they are doing, they will drive off a cliff. So it’s not just progressives. In the UK, Prime Minister Rishi Sunak is already airborne and plummeting toward the ground. Narendra Modi got punished in India. Emmanuel Macron is floundering in France, and Canadian Prime Minister Justin Trudeau is in even worse political shape.
A new Ipsos poll done for Global News found that 68% of Canadians want Trudeau to step down. Snowstorms poll higher than that in Canada. “This is as bad as we’ve seen it for Trudeau,”Ipsos CEO Darrell Brickertold Global. “It’s close to rock bottom.”
On June 24, Trudeau will face a major test with a byelection in what has long been one of the safest Liberal ridings in the country, St. Paul’s, in downtown Toronto. The Liberals should win easily, but it’s going to be close, and if they somehow lose, Trudeau will feel more heat than from today’s weather bomb to step down. (Conservatives don’t want him to go, preferring to run against a weakened Trudeau in the next election.)
Still, the point remains: Progressive ideas are not connecting. If the policies were actually working — a case both Biden and Trudeau are trying to make — poll results would look rosier. But they don’t.
Trudeau’s signature tax on carbon to deal with climate change is now a shield — not a sword — issue. His attempt to change the narrative by igniting a class war with his new capital gains tax on the rich has done little to reframe the narrative, but the poorly explained policy has alienated lots of centrist voters. In politics, the old saw “Explaining is losing” has always seemed trite to me — policy often takes time to be understood — but if the explanation is bad, then, yeah, you are losing.
Biden is trying to boost his image by offering undocumented spouses a pathway to permanent US residency and his student loan forgiveness. Both may be popular, but neither has really improved his polling. Why?
Trudeau is facing a change wave, and Biden an age wave, but the issues are deeper than that. The fundamental premise that progressives pitch — that their social and economic policies work to improve people’s quality of life — is losing its plausibility, weakened by inflation, a world in crisis, and a long-term, low-growth environment. Trump may not have solid answers — his self-absorbed victimization narrative lacks facts, optimism, and generosity — but his dark view of the world reflects a mood, and people mistake that for truth. Trump reflects how many people feel; Biden is promising things many no longer believe are possible.
Populism always has an angry protest strain to it, but the response to it is usually clear: Show growth. Build things that work: roads, hospitals, opportunities. Don’t go broke. And finally, get stuff done, and be seen to be getting it done. People have to feel better about their lives. And they are not.
Progressives keep looking in the mirror, and they only see opponents they believe are unfit for office. They have to start seeing themselves and figure out why their promises and policies are not connecting more widely. Self-reflection is hard, but tearing down the other guy only works for so long, especially for an incumbent. They need to reinvent themselves as credible leaders promising something better in the future, not just recycled defenders of their past glory days. They must prove their big new promises are doable in short periods of time. Otherwise, they risk looking like those aging athletes who criticize the skills of the new generation of competitors but keep losing. In politics, the past ain't prologue. It just doesn’t work that way. Just ask Rafa Nadal.
Former U.S. President and Republican presidential candidate Donald Trump speaks to the media following meetings with Republicans on Capitol Hill, at the National Republican Senatorial Committee (NRSC) headquarters in Washington, U.S., June 13, 2024.
Trump holds “pep rally” on return to Capitol Hill
Convicted former President Donald Trumpreturned to Capitol Hill on Thursday — the first time since his supporters attacked Congress on Jan. 6, 2021 — to deliver a behind-closed-doors speech to GOP legislators. Rep. Matt Gaetz described the mood as a “pep rally” meant to unify the Republican Party ahead of what is sure to be a grueling election.
Trump made reference from the podium to the divides within his own party, reportedly asking far-right Rep. Marjorie Taylor Greene, of Georgia, to take it easy on House Speaker Mike Johnson. Greene ousted Johnson’s predecessor for working with Democrats to pass a spending bill and attempted to do the same to Johnson in April.
The occasion also marked the first time Trump and Senate Minority Leader Mitch McConnell have been in the same room since the Jan. 6 attacks. McConnell previously said he held Trump “practically and morally responsible for provoking the events” of that day but now says he intends to vote for him — and to step down as the GOP’s Senate leader later this year.
Trump’s speech hopped from China (“they’re ripping us off”) to trans athletes (he’s anti) to border security (not happy), but he had a clear message for the GOP on abortion: Chill out! He reportedly said that Republicans keep losing because they endorse extreme positions on the issue and said he supported abortion policy that includes exceptions for rape, incest, and the life of the mother. We’re watching for signs the GOP takes his more moderate tack, and whether that helps them at the ballot box.
Iran without Raisi: What's next?
Ian Bremmer shares his insights on global politics this week on World In :60.
What's the fallout from the death of Iran's president?
Not that much in the near term because he doesn't actually run the country. There will be a new election in 50 days. It'll be a hardline or a loyalist to the Supreme Leader. Almost no one will turn out to vote because people don't see this as legitimate. But the country is still a strong and repressive theocracy and that is not changing with or without President Raisi.
How will allies respond to Zelensky urging them for direct involvement in the war?
We're seeing more of this in part because you have the Americans, the French, increasingly talking about the fact that they might want to send people, boots on the ground, to engage in training. As soon as Zelensky hears that, especially because his troops aren't doing so well on the ground right now, he wants maximum support from everyone he can get in NATO. Also, if you want to be in NATO, that means you've got to have trip wires, that means that NATO has to be involved if the Ukrainians are losing more land. This helps with that. But all of this means that the upcoming 75th anniversary of the NATO summit in Washington in July is going to be a really tough one to navigate. Zelensky wants a lot more than NATO allies are prepared to give him.
Is India's recent rise in Russian oil imports a concern to the West?
Not really. The Indians are actually importing more oil from Russia than China, even though, overall, China's trade is going up faster. But American policy, NATO policy is, squeeze the Russians but not so much that it hurts the Americans and the Europeans, it doesn't hurt their economy that much. What that means is that the Russians continue to export oil, and gas, and uranium, and food, and fertilizer. They basically reveal preferences that the United States isn't prepared to do all that much ultimately for Ukraine, especially not if the American economy takes a hit. That does, of course, matter when you look at what's happening with Russia around the world.
That's it for me. I'll talk to you all real soon.
Smooth sailing for LNG amid Biden’s pause, Trudeau’s hesitation, and Johnson’s political gamble?
If you thought America’s liquefied natural gas policy had nothing to do with Russia’s war in Ukraine, think again. LNG is all over the news right now, thanks to House Speaker Mike Johnson (R-LA) cooking up a plan to link the issues.
Meanwhile, north of the border, Canada is having its own LNG squabbles as the future of the multibillion-dollar industry is being debated. Tensions between the federal government, which is increasingly weary of fossil fuel mega-projects, and provincial governments keen on resource revenue, are shaping the debate.
And so are considerations about what’s happening down south. In January, the Biden administration suspended pending approvals of LNG exports to countries with which it doesn’t have a free trade agreement. It’s waiting on the Department of Energy to sort out what these exports mean in terms of costs to US consumers and climate impact. The pause came in no small part thanks to the efforts of climate change activists.
Observers suspect Trudeau can’t get too far from Biden on the issue, and cross-border climate activists used Biden’s more aggressive climate policies to try to box in Trudeau. In January, Biden’s LNG pause put Canada’s LNG export policy in the spotlight, pressuring the country to enact its own moratorium (which it hasn’t done) – especially if it hopes to meet its 2030 climate goals. Also, the LNG market is only so big and may be headed for a glut, so US projects or exports – or a lack thereof – shape Canadian calculations.
When the US suspended new LNG approvals in January, President Joe Biden was quick to point out that the pause wouldn’t affect existing exports to US allies in the “near term.” But in the long-term? A lot depends on the global market, geopolitical considerations, and domestic politics, including climate activist pressure on Biden – who faces a reelection battle in November.
Biden was nonetheless keen in January to make everyone aware the US remains the top LNG exporter and that the energy source wasn’t going to stop flowing overnight. In fact, the administration expects export capacity to more than double by 2028, and last year the country’s LNG project approvals were record-setting.
The trade authorization review is important because it calls into question how viable LNG projects and exports will be long term in a world in which climate policies are moving away from fossil fuels, which are facing increasing competition from renewables. But it may also be up for negotiation.
Biden wants desperately to get an aid bill through Congress to fund Ukraine’s defense efforts against Russia. The Senate has passed a bill, but it’s stalled in the House, where Johnson has held it up.
Facing pressure from his own party, who oppose the Ukraine aid package, Johnson – who is also fighting to retain his gavel – has dreamed up a trade that involves putting the aid bill to a vote and backing it in exchange for Biden reopening the LNG taps. Trouble is, that may not be enough for GOP hardliners, or at least not enough of them to get the thing passed, which would compromise not only the Ukraine aid deal but Johnson’s speakership and political career.
The plan wasn’t initially warmly embraced, particularly among the right-wing GOPers more focused on border policy than LNG. On the other side of the aisle, Democrats weren’t super enthusiastic about it either, and climate change activists and politicians are pressuring Biden to reject the deal. On Tuesday, Reuters reported that White House sources said the administration was open to the deal, pending a look at the full plan, but a White House spokesperson said the report was untrue and that President Joe Biden stands behind the pause. All of this back-and-forth and crossed wires suggests Johnson’s deal might be more of an opening bid than a final one.
Noah Daponte-Smith, a US analyst at Eurasia Group, says this is merely “the negotiating stage,” noting that whether the Ukraine package gets through Congress is another matter. Johnson is trapped between his own party and Democrats, both of whom he needs if the Ukraine bill has any chance of passing.
The Democrats want a clean bill – with no extra measures – which means they aren’t interested in LNG additions. Even Johnson isn’t “enormously committed” to LNG, according to Daponte-Smith, but the speaker is running out of options.
“I think he wants to hold on to the gavel and this is something convenient he can put forward to the Republican caucus,” he says.
The border deal is a non-starter for the Ukraine package, Daponte-Smithe says, given that former President Donald Trump has declared it dead.
And it’s not just the US squabbling over LNG.
Last week, Canadian Energy and Natural Resources Minister Jonathan Wilkison said the Liberal government wasn’t interested in funding future LNG projects. Beyond what’s already in the works, no more LNG projects will open in Canada unless the private sector is willing to go it alone. As of December, there were eight LNG projects in development worth over CA$100 billion, which includes the LNG Canada project, which Ottawa sank CA$275 million of public money into back in 2019, calling the project an investment “up to $40 billion” that “will lead to 10,000 middle-class jobs.” How times have changed.
Ottawa is turning its back despite Greece recently expressing interest in buying LNG from Canada – as have Japan and Germany. A few years ago, Prime Minister Justin Trudeau wasn’t convinced of the upsides to shipping LNG to Europe, and Wilkinson’s latest comments suggest the PM hasn’t changed his mind. Of course, just because there’s demand for Canadian LNG today doesn’t mean there will be tomorrow, and the IEA expects slower demand growth in the years to come.
LNG opponents suggest the future for the energy source is dim and are calling for Canada not to see any US slowdown on LNG as an opportunity to fill the gap. Since nuclear starts and restarts are on the rise in Asia, and renewables projects are soaring globally, the world faces a potential oversupply of gas.
Neither the US nor Canada are going to fully halt export and development anytime soon. But the fact that the Biden administration and Trudeau government are even the slightest bit weary of LNG projects is a major development in energy and climate policy.
“Everything is political” is personal: the NYC migrant crisis
“Do you know,”
Jhon asked me, shivering slightly in the lengthening afternoon shadows of New York’s Penn Station, “do you know if we can stay here – in America?”
Jhon is a wiry 42-year-old construction worker who fled Ecuador a month ago with his wife and four children. The recent surge of narco-violence there had gotten so bad, he said, that the local school switched to virtual classes for the safety of the students and their parents.
Now, after a trying journey by foot, boat, bus, and train, he was standing in the middle of New York City, bewildered but hopeful.
“I just want to work,” he told me. “I don’t want anyone to take care of me or to rely on anyone else. I just want to be able to work.”
But in those early moments, Jhon and his family did need help – to find their way to New York’s intake center for migrants seeking shelter, to learn to navigate the city’s byzantine health and legal systems, to stay on track with their asylum applications.
In that way, he is like many of the more than 170,000 undocumented migrants who have arrived in New York City over the past two years, most of them on buses from Texas.
The city government says it’s struggling to deal with the influx. Mayor Eric Adams has warned that providing services to the migrants will “destroy this city” and cost more than $12 billion. But a small group of grassroots non-profits has stepped up to welcome, orient, and support the new arrivals.
I met Jhon while shadowing Power Malu, an Afro-Puerto Rican activist from New York’s Lower East Side, whose Artists Athletes Activists organization is one of the subjects of a new report I’ve been working on for our TV show “GZERO World with Ian Bremmer.”
Nearly every day and night for almost two years, Power’s been at Gotham’s various bus and train stations, welcoming migrants like Jhon, giving a guiding hand to people who arrive in a city of millions after a journey of months and simply don’t know whom to trust or where to go.
Over the past few weeks, we’ve spent many hours with Power and other activists in New York – like Adama Bah, a formerly undocumented migrant from Guinea who has built the largest Black-oriented migrant services network in the city (a big deal given that migrants from Haiti or West Africa are chronically underserved by systems geared mainly towards Latinos), and Ilze Thielmann, who started a free “store” that gives clothing, strollers, and toiletries to recent migrants.
Along the way, we met people like Igor, a refugee from violence in Burundi who left behind a cushy job as an IT manager and traveled through Mexico on foot with his pregnant wife to get to the US. He finally got asylum several weeks ago.
Or Brandon, from Venezuela, who braved the treacherous Darién Gap and the constant gauntlets of extortion, kidnapping, and violence in Mexico on his journey to New York, and who now works with Power to welcome others who followed the same route.
Why did my producer Molly Rubin and I pick this subject? Migration is now the top political issue in America. A recent poll showed close to three in 10 voters say border policy is their primary concern, topping the list for the first time since 2019, and outstripping other perennial contenders like “the economy,” “inflation,” or the always exciting “crime.”
But when it comes to the crisis at the southern border and its impact on Northern cities, the gigantic numbers can dull your sense of what is actually happening here: A story about “millions” of migrants crossing the border, or the “billions” of dollars it will cost, is still a story about individual human beings, with names, who have lived stories of tremendous suffering, perseverance, and dedication.
“Everything is political,” we often say at GZERO. And that’s true. But everything political is ultimately personal too. If it’s not, why would it matter at all?
This is one story that Molly and I hope will drive that home. You can check it out here, and let us know what you think.
Learn more about the organizations mentioned in this report:
Biden and Trudeau face headwinds … from Gaza
Last Thursday, after Joe Biden promised during his State of the Union to build a pier to deliver aid to Gaza, Colorado Sen. Michael Bennet shook the president’s hand, congratulated him on the speech, and urged him to push Israel to do more on “humanitarian stuff.”
Biden, caught on a hot mic, nodded in agreement and said he was pressing Israeli Prime Minister Benjamin Netanyahu. “I told him, Bibi, don’t repeat this, but we are going to have a come-to-Jesus meeting.”
The next day, in the multicultural Toronto suburb of Mississauga, Justin Trudeau's International Development Minister Ahmed Hussenannounced that Canada would resume funding the United Nations Relief and Works Agency for Palestine Refugees. Israel has alleged that 12 employees were involved in the Oct. 7 attack on Israel, leading most Western countries to withdraw aid.
Unhappy progressives
Both Biden and Trudeau are responding to pressure to shift their positions on the war in Gaza, which has rattled their electoral coalitions, posing serious challenges for them as they head toward elections in November in the United States and 2025 in Canada.
The White House is aware of the problem. Biden’s aides have had to take steps to avoid pro-Palestinian protests, booking him into smaller venues and holding back event details until the last minute to keep protesters from being able to disrupt him. That is making it hard for him to get his message about student loan relief out on university campuses.
The horrible death toll in Gaza, where thousands of civilians have been killed since October, has led to despair and anger among progressives, not just among people with roots in the Middle East, but among young people and people of color.
There has been a significant generational shift in public opinion. A December New York Times poll found 46% of 18-to-19-year-olds are more sympathetic to Palestinians, compared to 27% who are sympathetic to Israel.
“I tell people all the time, 50 years ago when we had a demonstration from the White House it would be 50 people, all of whom had an Arabic accent, and today it’s tens of thousands of people, and it's a group as diverse as America that's showing up,” says James J. Zogby, founder of the Arab American Institute.
Michigan in the balance
In February’s Democratic presidential primary in Michigan, 13% of voters chose “uncommitted,” sparking similar protest movements in other states, a way for progressives to signal their unhappiness with Biden’s support for Israel in the Gaza war. But unlike the other states, Michigan, home to about 500,000 Arab Americans, is vital if Biden hopes to stay in the White House.
“Michigan had a huge impact because it is difficult to come up with a map where Democrats win the White House without Michigan in the mix, and the percentage of Arab voters in Michigan is high enough to make the difference,” says Zogby.
While the fear isn’t that these voters would flip sides for Donald Trump, the threat is real, says Clayton Allen, US director for the Eurasia Group. “Michigan is a great example where if you see the decline in Arab-American support hold through the election, that would be enough votes — if they would not show up to vote … — that would be enough to erase what had been his margin of victory in 2020.”
Nobody on Trudeau’s side
The situation in Canada is similar. Progressives are so frustrated with the Trudeau government’s position on the war that urban areas once considered safe for the Liberals may now be out of reach for the party.
Trudeau’s fence-sitting on the Gaza war has not endeared him to pro-Israel voters either.
“The Liberal Party has lost, largely, both communities, because they’ve tried to have it both ways,” says pollster Quito Maggi, of Mainstreet Research.
“For electoral purposes, it’s not really great to have nobody on your side,” says one Liberal organizer.
The Liberals have been behind in the polls for so long that some would like to replace Trudeau before the election, but a leadership race while the war continues could be dominated by arguments over Gaza, potentially damaging the party.
The war is not causing similar problems for conservatives in either country, because their coalitions don’t include progressives who are angered by the bombing. They can sit back and watch as their progressive opponents struggle to keep their coalitions together.
Both Biden and Trudeau appear to be in no-win positions. They are angering their progressive bases but would anger other constituencies if they move too far the other way.
“Outside of that young progressive block, most US voters, in total, support US military backing of Israel,” says Allen. “So Biden does bear a risk if he skews too hard to the left. Everyone else can attack him for abandoning Israel. I think that's been one of the limiting factors. It's why we see Biden try to walk this tightrope.”
Both leaders would benefit from bringing the temperature down, which will only happen after the bombs stop falling on Gaza. Few outside Canada have much reason to be greatly concerned about Trudeau’s position, but the United States provides $3.8 billion in military aid to Israel every year, which gives Biden leverage over Netanyahu.
He may need to use it soon to give himself time to win back the progressives whose votes he needs to keep Trump out of the White House.