Is There Any Point in Negotiating With Trumps America?

I spent the better part of fifty years leading negotiations, resulting in dozens, if not more, agreements. None of them ended in failure or even a rejected agreement once a settlement was reached at the bargaining table. There were two immutable conditions underpinning those negotiations: both parties had an interest in reaching an agreement; and certainty that, once reached, an agreement would be honoured even when the outcomes might prove different from what was originally contemplated. The other significant element was that the parties had continuing relationships that predated the agreements and would continue after. This experience makes it particularly frustrating for me when I encounter other types of negotiations, for example when I’m trying to buy a car and the salesperson always goes upstairs with what I think has been agreed to only to regretfully inform me that someone in higher authority has said “no” and I will have to increase my offer. Same thing selling or buying real estate. Part of me always feels the other party is bargaining in bad faith when, in fact, I’m engaged in a type of negotiation completely different from what I’m most familiar with. It’s important to keep this in mind when confronted with other, unconventional negotiating styles such as that of the U.S. government today, and not to react in anything but a calm and thoughtful way. The simple fact is they will do what they will do to paraphrase an old negotiating colleague of mine and there’s very little we can do to control that. We must continuously focus on what we can control, a message the Prime Minister is wisely repeating over and over.

Negotiations between the U.S. and Canada are currently at an impasse because of Donald Trump’s tantrum over an Ontario ad that played in America and that quoted President Ronald Reagan decrying the use of tariffs. At least that’s the official version although it really doesn’t hold water and it’s more likely the Americans were simply looking for an excuse to stop the negotiations to bring more pressure to bear on Canada. This “pause” is a good time for Canada to consider whether there’s any point in pursuing an agreement at all with America today? I raise this as someone who has supported closer economic integration between Canada and the U.S. since the 1960’s with the then Canada/U.S. Auto Pact. With the benefit of hindsight all the free trade agreements that followed led Canada into an increasingly vulnerable position until we find ourselves where we are today. They were a mistake. John Turner was right and Brian Mulroney was wrong.

These negotiations should mostly fit in the mold of the negotiations I’ve engaged in so the first task is to see whether the underlying conditions for agreement exist now or in the future? Do the Americans believe it is in their best interest to reach an agreement with Canada? To listen to the President and some of his Cabinet, it would seem the answer is “no”, at least for any agreement that would do anything other than impose greater disadvantages upon Canada. Many will say “well, they don’t really mean what they’re saying” but, after nine months of this administration, is that really credible? Yes, the Americans need Canada for many things including oil, potash, steel, lumber and aluminum but there are powerful lobbies in America where the costs of forgoing at least the steel, lumber and aluminum are outweighed by the increased profits resulting from the tariffs for those vested interests. In other words, the American people be damned as long as the select industries can increase their wealth even if it means increased costs for American consumers.

But, quite apart from what Canadians may believe to be in America’s best interests, it’s been my experience to usually believe what the other side is saying even when it seems to contradict common sense or known facts. It’s their beliefs that count, nothing more. Of course that encounters push back when dealing with a serial liar which President Trump has proven to be but, hidden in whatever obfuscation he’s launching on any given day, there are surely grains of evidence of what’s really going on.

There is one area where the Americans have been consistent and where they are proceeding to strip Canada of its industrial capacity and that’s the auto industry. This strikes close to home for me. I worked for the UAW in Windsor/Detroit in 1971, just a few years after the Canada/US auto pact had been agreed to and as the countries’ two auto industries were moving to full integration in response to what was considered an existential threat from Japanese, and to a lesser extent, German auto makers. And that’s why today’s North American auto industry is so closely integrated and why Donald Trump’s dismantling of that, complete with tariff walls and eschewing the move to electric vehicles, is going to leave that industry a stranded albatross that is increasingly uncompetitive and dying. It will be rough, but Canada must use this moment to find new auto maker partners and position itself as a global leader in new automobile technologies. The alternative is a complete hollowing out of Canada’s auto industry, one that goes back a century, with dire negative economic consequences for communities in southern Ontario and Quebec.

Aside from autos, the tariffs are weighing heavily on softwood lumber in B.C., Quebec and the Maritimes. Aluminum tariffs are negatively impacting Quebec and B.C. while the steel tariffs are mostly affecting Ontario. In other words, vast areas of Canada are having economic warfare waged against them and there’s little reason to think any agreement will result in reliable relief.

So, I return to the question: do the Americans want an agreement with Canada? At this point I think the answer is probably “no” and that may also apply to the renewal of the Canada/US/Mexico free trade agreement. And it doesn’t matter what we think should be in their best interests or that they are mistaken. All that matters at this moment is what they believe. So, for starters, one of the two fundamental anchors for any successful negotiation is missing.

And that brings me to the second anchor. Even if there is some renewed interest from the Americans, can we ever truly believe they will honour any agreement they enter into? What is almost certain is that, after one too many Big Macs, Donald Trump will wake up in the middle of the night, turn on his computer and wreck chaos across the agreement landscape. He’s already done so repeatedly and specifically with Canada with his so-called fentanyl tariffs and there is no reason to believe he’s going to change in the final three years of his Presidency.

Just to complicate the conversation further, it’s clear the tariff stick is not just going to be used to address trade issues. Time and again, Trump is using it to meddle in other countries’ internal affairs, including Canada’s. We’ve already blinked once, on the digital services tax, so why wouldn’t he use it over and over again to influence Canadian domestic decisions. In fact, he already has with the Ontario anti tariff ads. This, of course, pales in comparison to what he’s doing tariffing Brazil because it has the temerity to prosecute its former President for attempting to foment a military coup after his election defeat, or his threatened tariffs agains Columbia after its President expressed concern over the bombing of boats in the Caribbean and Pacific.

So, what does Canada do now? Well, much of what it is already doing, although with a better understanding there may never be agreements with this administration and we can survive that. In negotiations theory we use a term “Best Alternative to a Negotiated Agreement”, or “BATNA” which basically means what it says. It’s one of the basic tools in preparing for and conducting a negotiation. It allows for a true comparison of any agreement on offer. Canada’s BATNA right now is pretty much what the Canadian government is doing. Respond to the threats and tantrums from down south with a firm “we’re ready to talk when the Americans are”, while getting on with the serious business of re-orienting Canada’s economy away from one dependent upon free trade with the United States. There will be increasing economic pain and it won’t be shared equally across the country but the federal and provincial governments can take steps to mitigate it and, most importantly, to ensure the rise of a new industrial base with displaced workers given first shot at participating in it.

Canada is a very special place and it’s worth doing whatever is necessary to ensure it endures and prospers. It’s just possible in ten years we may look back and thank Donald Trump for waking us up and starting us on yet another journey of nation building in The True North Strong and Free.

Just sayin

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Is It Over America? Did China Win Without Even Firing a Shot?

Several decades ago speculation began about a new cold war, this one between America and China, with the newly emerging state capitalism of China confronting the then only remaining superpower, the United States. Those of us in the west were reassured by history, or at least the recent history we were most familiar with, where western ideas, economic organization and ideology had always triumphed, most recently against the “evil empire” of the Soviet Union. It seemed likely, or maybe even certain, this would also happen with communist China where, we were told, the dynamism and creativity needed for a truly successful society would ultimately come crashing up against the stultifying rigidity and need for control of the centralized communist state. The brutal crushing of student activism in Tiananmen Square a decade earlier seemed proof the Chinese model could never compete successfully, let alone endure, against the dynamism of western democracies and capitalism with their at times chaotic free flow and exchange of ideas. China’s domination of much of Asia for centuries before the emergence of the western European empires was nothing but a footnote, or so we thought. And to be completely honest, this was supported by the persistent racism directed at the Chinese by westerners over the preceding two centuries.

Future historians will spend their careers trying to understand what happened next. For reasons beyond the understanding of most of us, Americans turned against the model that created and maintained their prosperity and dominance, and that they mostly built for just that purpose. Instead of supporting and celebrating that model, many Americans came to feel put upon by it as they bought into the elitist narrative of American decline as exemplified by the hollowed out communities that had been the centre of American industry. I say “elitist” because it was a narrative favoured by wealthy vested interests in America as it enabled them to resist changes that would have affected their bottom lines. And what better person to personify this than Donald Trump? In not one, but two, separate elections they chose him and his ideology, if you can call it that, that promised to undo the very foundations of American greatness and with it the western world order. His 2016 election could be viewed as an aberration given the relative numbers with the popular vote, but his 2024 victory was an unmistakable statement that a majority American voters supported him and what he represented, whatever that might be.

In only nine months he has led an assault on almost every pillar of American greatness. Perhaps first amongst these is his drive to destroy the international trading system that has developed since the Second World War. With no distinction between friend and foe, he has attacked trading partners using tariffs as his cudgel. This shouldn’t have been a surprise as he has long publicly held the view that America was being “ripped off” by its trading partners and that tariffs were the remedy. Never the less, the speed and aggression employed caught almost everyone off guard.

His approach to negotiations with other nations reflects a view that may have been effective in New York real estate but that, in international affairs, guarantees fallout that will last generations. Put simply, if a negotiation is a “one of”, where the parties have no continuing relationship, it is possible to aim for a settlement where one party demonstrably wins and the other loses. And, in fact, it is even possible to crow about your success afterwards without damaging long term relationships and your own interests. I say “possible” because even in such a straightforward and transactional negotiation, nothing occurs in a vacum and, if nothing else, you emerge with your reputation sullied, although a sullied reputation is clearly not something Donald Trump cares about. But when you are negotiating with nations with whom you will have an enduring relationship, it is an entirely different matter. And that’s what’s happening now.

And it’s not just trading relationships that are being affected as the threat of tariffs is mobilized to interfere in the internal affairs of other nations. With Brazil, Trump is using tariffs to attempt to end the prosecution of his ally and former Brazilian President, Jair Bolsonaro, who has been charged with attempting to remain in power after losing an election by inciting a coup (sound familiar?). With Vietnam, the threat of tariffs was used to force the Vietnamese to accept and pay for, a golf club that benefits the Trump family. With Canada, the threat to end any negotiations on the tariffs was used to force it to abandon its digital services tax. With South Africa, tariffs are being used to try to force the government to repeal laws that might transfer agricultural lands from white South Africans to black South Africans. And, perhaps most damaging of all, his attack on India for importing Russian oil almost certainly guarantees a fundamental realignment of great powers that will not benefit the west.

Although this approach might lead to some short term “wins” for America, it will fail spectacularly in the long term as the barely dormant view of the “ugly American” re-emerges. America’s status as a superpower is significantly strengthened by its ability to rally the advanced western and Asian democracies behind it as force multipliers. The negative views fostered by the trade shakedowns will profoundly undermine that. Even with Canada, America’s closest neighbour and ally, the fracture will poison future relations for generations. Of course Canada will continue to help America when it experiences disasters but, when the day comes America needs allied troops beside it in places like Afghanistan where Canadians fought and died beside Americans, things will be different.

There’s something else going on under the guise of trade negotiations that everyone who cares about economic freedom and free enterprise should be concerned about. Of late, Trump has been announcing trade deals with private companies where the government takes significant ownership stakes in the companies in return for permitting them to conduct business both in the United States and with the rest of the world. In other words “pay to play”. This is the antithesis of the American free enterprise that drove its economy for well over two centuries. It’s the kind of state control evident in countries with authoritarian regimes that believe government and central planning is always the best way to organize an economy. This, despite the experience of the twentieth century, where time and time again, those economies failed to compete with the capitalist and democratic west and Asians. China may be an exception in this regard because of it’s long and very different history from the west, but do Americans really want to trade their freedom for the type of state control effectively practiced by the People’s Republic of China?

And it’s not just trade policy that’s undermining America’s status in the world. Terminating it’s premier foreign aid program, USAID, not only is having devasting effects on some of the most vulnerable and impoverished people on earth, it’s showing a callousness that completely undermines any claim to moral authority by America. Of course, it’s pretty obvious Donald Trump doesn’t give a fig about moral authority, apparently not understanding how it strengthened America in its past battles for the hearts and minds of people around the world.

America’s greatness was not just a result of it’s wealth and power; nor its democratic example; nor the moral clarity it often brought to international relations. It was also the result of the untrammelled intellectual freedom, scientific exploration, artistic freedom and, at times, almost chaotic internal debates over it’s direction. And now all these are under assault from forces that would prefer a much narrower, closed and static society. Using the pretext of antisemitism, Donald Trump has begun a full out assault on some of America’s greatest institutions of higher learning, seeking to bend them to his control and will. And some of them are bending. Even at the level of schools states controlled by MAGA supporters are banning books and, in one case at least, applying a filter against “wokeness” when assessing whether or not to hire teachers.

In the fields of medical and other scientific research the U.S. government is moving aggressively to end funding and to rollback supports for medical advances that don’t fit its narrow view of what is or is not correct. The research is being warped to fit the pre-conceived beliefs, and so advances in many areas crucial to human health and progress are being slowed or stopped, this under the Health and Human Services Secretary, Bobby Kennedy Jr, who is single handedly dismantling the great centres of medical research and management. His father must be rolling in his grave.

Even in the areas of arts and entertainment Trump and his allies are moving to defund and stifle the extraordinary creativity that has been the hallmark of American arts for at least a century. The perfect example is his takeover of the previously non partisan Kennedy Centre where he has now assumed the role of board chair and is actively intervening to ensure productions reflect his mudane tastes. This at the same time the government is cutting funding for public broadcasting in the United States.

And then there’s the existential issue of the effect of man made climate change on the world. Donald Trump and his supporters deny man made climate change because, to borrow a phrase from the documentary on the subject, it is a very inconvenient truth for those who prosper from the continued despoiling of the planet. After accepting massive donations from the petrochemical industry, the Trump administration has moved quickly to dismantle the supports and incentives for a transition to clean energy, casting them off as exemplars of woke liberalism and, particularly, of the administration of President Joe Biden. They have also withdrawn from international efforts to coordinate and accelerate the move away from carbon based energy. This, as the climate warms and the consequences appear as massive floods, hurricanes, firestorms, droughts and sea rise. I thought once the climate effects began to impact Americans, particularly those in red states, public opinion would change. But, thus far at least, apparently not, despite the advent of completely unprecedented disasters costing billions in damages and hundreds of lives. It’s probably a disservice to lemmings to draw a comparison between them and climate change deniers in the United States but it is oh so tempting.

So, while America turns increasingly inward and away from its great traditions of freedom, science, collaboration and progress, China just waits. It’s unlikely anyone would have predicted so many Americans would embrace a suicide pact that by any rational measure, is contrary to their own interests. But here we are. China is forging ahead with the technologies that will define the future while America looks longingly at a mythical and, for many, dark past. And although it is possible America may choose a different direction in 2028, that’s an eternity in the changing world we now inhabit. Increasingly, other nations will be pulled into the Chinese orbit, attracted by its wealth, military might and order, and repelled by the culture of blackmail and shakedowns increasingly characteristic of America’s approach to the world.

Is this the end of the “western moment”? I’m not sure but it does seem to be circling the drain. And the great tragedy is it is all so unnecessary and self inflicted.

Just sayin

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Little Donald is Playing With Matches Again

Several days ago Donald Trump woke up in the middle of the night and decided to send a letter to Canada threatening thirty five percent tariffs on its exports to the United States. This was followed a few days later by similar letters to the European Union and America’s trading partners in Southeast Asia. Somewhere along the line Mexico got one too, and then there was Brazil where he has promised to apply fifty percent tariffs unless the Brazilian government and judiciary stop the prosecution of former President Jair Bolsonaro. Bolsonaro is on trial for trying to stay in power after losing the Brazilian election (sound familiar?).

In my (I stress) limited experience, little boys play with matches for several reasons best commented on by trained psychiatrists and psychologists, but one is blindingly obvious: little boys play with matches to get attention, usually the unwanted kind from adults, but attention none the less. Parents are legitimately concerned that little Johny, Donny or Mikey might hurt themselves. In the current context I could care less about that but then there is the serious concern he might light a fire that burns down the entire house or neighbourhood or world (you get the picture). And for reasons still eluding most of us, seventy seven million of our American neighbours gave little Donald seemingly unfettered access to the world’s largest supply of matches. And boy is he enjoying playing with them.

A whole new cottage industry has sprung up trying to make sense of Donald Trump, all predicated on the never quite stated view that something complicated, even sophisticated, is going on. Fortunes are being made or enhanced as former Trump associates and officials swan across the world’s TV screens (for a fee of course) to offer their unique insights into this consequential figure. And make no mistake, he is a consequential, perhaps even unique, figure in American history, if not the world’s (well, there was Nero, but that was a really long time ago).

Little boys playing with matches usually get their comeuppance when adults step in and put a stop to the behaviour, likely accompanied with some kind of remedial punishment. Unfortunately, with the current arsonist in chief the next opportunity for adult intervention isn’t until the U.S. midterm elections in November, 2026 and then only if enough American voters decide they’ve had enough of this roller coaster and elect at least one house of Congress capable of applying some breaks. And that assumes America will still be capable of holding free and fair elections. I’m not holding my breath. So for at least another seventeen months the pyrotechnics will continue and we’ll all have front row seats.

Governments from one end of the globe to the other are scrambling to get anything that might look even a little like “normal” back into the relationships with the world’s biggest economy and mightiest military power. And that is especially so with Canada where two hundred years of increasing cooperation and integration is out the widow.

Canadians elected Mark Carney as Prime Minister in April largely in response to the bellicose behaviour of Donald Trump and his government, whether threatening expropriation or economic ruin for Canada. With one exception, I think he’s doing as good a job as possible in the cirumstances. The exception is the move to remove the Digital Services Tax (“DST”) in response to Trump’s threats. While I didn’t support the tax and am glad it was removed, I was surprised at how that was handled. Just a few days earlier the government was insisting the tax would go ahead despite the very strong objections of the Americans but as soon as Donald Trump threatened to end the negotiations the tax was dropped. I know a few things about negotiations and this was an unforced error by Canada’s negotiators. Knowing the American position, the Canadians negotiators should have pre-emptively paused the tax until the negotiations were concluded, probably then trading it off for something in the negotiations. A quibble? Perhaps, but it reinforced Donald Trump’s view that bullying works and allowed his always charming and thoughful spokesperson to tactfully say “Carney caved”.

Aside from the DST though I think the government is doing most of the right things: moving to diversify Canada’s trade; eliminating interprovincial trade barriers; embarking on nation building projects that will use Canadian products while strengthening our ability to sell resources to nations other than the U.S.; encouraging “buy Canadian” programs domestically; committing to massive increases in Defence spending; building and strengthening relations with countries in Europe and Asia; and trying to achieve some kind of agreement that will stabilize our relationship with America. It’s the last of these that poses the greatest challenge because, aside from the diametrically different views on tariffs, does anyone really expect any agreement with America under Donald Trump is going to be faithfully executed and honoured? It’s a virtual certainty the time will come after an agreement is reached that Donald Trump will wake up in the middle of the night, need some attention, and fire off a tweet threatening or imposing tariffs on Canada despite whatever the agreement might say or require. This doesn’t mean we shouldn’t try for an agreement and, if the basic terms of one are achieved, it shouldn’t be accepted, just that our eyes need to be wide open to the limits of this process as long as the current occupant of the White House is in power. To the extent possible, the economic and political relationship should be stabilized and, yes, that will likely mean accepting some level of tariffs and I’m glad the Prime Minister has begun preparing Canadians for that.

And then we just get on with our lives as best we can, all the while hoping the little boy in the White House doesn’t burn the entire neighbourhood down.

Just sayin,

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Make China Great Again (MCGA)

In the nearly three months since his inauguration Donald Trump and his administration have taken a wrecking ball to the U.S. federal government, cultural institutions, academia, schools, immigration policy, military alliances, health and human services, the federal civil service, law enforcement and justice. Although there seems little strategic thinking behind these moves, their end result will be a weaker, poorer and unstable America. But, he did win the election with over seventy million Americans voting for him and, if current polling is correct, still largely supporting him. And Americans were “warned” during the campaign with the disclosure of the Project 25 plans, so whether they simply disbelieved the warnings or supported the direction, they are getting what they voted for. As for the rest of us, that’s another matter altogether.

For eighty years since the end of the Second World War America has been the indispensable nation, leading the democratic west and providing an economic engine for much of the rest of the world. This did not happen by chance. It was the result of a deliberate strategy implemented with the creation of institutions like the International Monetary Fund, the World Bank, NATO and the United Nations, and resulted in decades of remarkable and unprecedented peace and prosperity for much of the world, especially the United States. The stability of that system began to weaken as it moved, perhaps inevitably, towards freer trade causing domestic disruptions in the more advanced economies, including the United States and, while it is true that free trade has added greatly to the prosperity of the advanced economies, it is also true that prosperity has not been shared equally across their populations and that is the starting point for some of the unravelling we are witnessing today.

On April 2, which Donald Trump called “liberation day”, he and his government blew all that up, imposing tariffs on friends and foes alike, and blasting through the norms of alliances, international diplomacy and good economic tradecraft. Stock markets around the world plummeted, losing trillions of dollars in assets. I’m not an economist but, if the vast majority of economists are to be believed, this is not going to end well as it ignites a trade war and will likely cause recessions in the United States and much of the rest of the world.

One of the more notable features of the tariffs is how high they are for some of the weakest and poorest economies on earth, which is consistent with Trump’s other actions showing no empathy for the poor and downtrodden . Although there are any number of guesses out there, no one seems to have a coherent theory of why and what the U.S. government is doing, and it is possible there isn’t one. The justifications being offered contradict each other and almost always go against prevailing economic wisdom. Comparisons are being drawn with The Smoot-Hawley Tariff Act that, in 1930, attempted to build a tariff wall around the United States and contributed significantly to the Great Depression that only ended with the Second World War. It also ended Republican dominance in the American Congress for decades and forever linked the name of President Herbert Hoover with economic failure and collapse.

Trying to make sense of all this has become something of a cottage industry. My best guess is there is no coherent game plan in Donald Trump’s head, just a collection of partially formed ideas animated by long held biases and grudges. I suspect the real planning is being done and executed out of sight by the authors of the Project 25 Plan who want to radically change American society and America’s place in the world. Their ideal world is encapsulated in a distorted memory of the 1950’s where, if you were a straight white male, things looked pretty good, at least if you weren’t born then and with the benefit of hindsight. I also suspect these shadowy figures placate Donald Trump by applying a patina of his worst prejudices when implementing the new policies. Donald Trump is not the sharpest knife in the drawer, and increasingly, he will be used as a tool to further the agenda of these extremists.

As well as the figures behind the agenda there are also the Cabinet Secretaries and other senior officials who were chosen not for their experience or skill but for their capacity to flatter and imitate Trump. When I read of the Signal Chat debacle where a number of them were meeting to review the actual bombing plans for Yemen, it struck me how inexperienced and juvenile they all were, showing sophomoric one upmanship in their language and attitude, as well as a complete lack of understanding of history.

Aside from the advisers, there’s another possibility. Look carefully at who is making money through the machinations of this government. Of course we know Trump, his family and coterie are monetizing the Presidency in ever more outlandish ways but that may be the least of it. Even if there is a recession and massive stock market losses, some, perhaps with inside information, will be able to take advantage of the chaos to fatten their own bank accounts and that includes the extended Trump family. It doesn’t matter that these people are already rich beyond the comprehension of most of humanity because the goal is always to get more and more and more, filling an unquenchable thirst in a morally bankupt existence. Check out how often Trump praises the singular goal of getting richer as if it is the holy grail for all human life, which I guess for him and his circle, it is.

While Democrats in the U.S. may see the economic chaos as helpful politically, providing the issue they need to stage a comback in the midterms in 2026 and the 2028 Presidential election, anyone who thinks that will cause the post Second World War international order to resume is mistaken. America has shown it cannot be trusted, and it will take a very long time, if ever, for other nations to place their faith in the word of the United States again. Canada, its closest neighbour and one of its best and oldest allies, was the first to learn this. That message has now been conveyed to the entire world. What this means is the Western World as it has existed and generally dominated since the seventeenth century is no more. For those of us who live in the so-called Western World, this is very bad news although, for others, it’s probably anything but. It is possible some new alliance of democratic nations will emerge, one that continues free trade amongst its members and collaborates on defence but the chance of that completely replacing the alliances with America at the centre are slim. America will remain the dominant economic and military power for some time, although its recent actions will accellerate its relative decline and the move to a world order that is not America centric. The principal winner in all this is China, whose rise as a rival to America has triggered anxiety in Washington and, ironically, prompted policies and actions that will do the opposite of what is needed or intended. All China has to do now is wait patiently on the sidelines, something it has a long history of doing successfully.

Also, what shouldn’t be ignored is that the kind of economic instability Donald Trump has unleashed often has led to open conflict between nations, not trade wars, real wars. Whether major but local conflicts or, worse, a third world war have become much more likely in the past ten days. The “greatest generation” is mostly gone now, but if they were here they would weep at this grotesque folly putting paid to their sacrifice.

As a student of history I have often been puzzled at some of the choices earlier nations and empires made, choices that, with the benefit of hindsight, led to their collapse. Now I’m living it in real time.

“plus ca change, plus c’est la meme chose”

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Donald Trump: Time to Confront the Unthinkable

Several weeks ago I published a blog in which I said I was beginning to feel like The Netherlands in 1938. Some of you suggested I was being alarmist and paranoid. I wish you’d been right.

The latest information from the discussions between the Prime Minister and the President suggest several alarming things for Canadian sovereignty. Most significant is the American view that the treaties establishing the border between Canada and the United States can be easily withdrawn from or broken. This in the context of Donald Trump referring to the border as an “imaginary line” that should be erased and Elon Musk saying “Canada isn’t a real country”. Several of Donald Trump’s advisers are now being quoted as saying the border should be “redrawn”.

These comments have been viewed as either a joke or as raising the possibility of an American takeover of all of Canada which would require an enormous American military commitment, and that doesn’t even account for the continuing costs of occupation. That’s provided some comfort to Canada. But what if the threat is less ambitious but every bit as deadly to the continuation of the Canadian state? What if a unilateral re-drawing of the border by the Americans severed Canada from some of its most important territory? For example, what if the Americans decided they no longer wanted to share the Great Lakes? And while at it, what about the St. Lawrence Seaway? Or what if America decided it needed a contiguous land connection to Alaska? Or wanted complete control over the Columbia River? And then there’s the arctic. America has never recognized the Northwest Passage as Canadian water. This, despite it being surrounded on all sides by Canadian land. What if America decided to unilaterally establish a military base up there, on Canadian land, from which it could look across the Arctic Ocean at its new ally, Russia?

Alarmist? Paranoid? After the last few weeks? Actually, this is right out of the Russian playbook. We are all familiar with Russia’s overt aggression against Ukraine since 2014 when it annexed Crimea, but we should also remember it has being trying to chip away at Ukraine for years, not to mention the other states on its periphery where it has fomented discontent and uprisings before intervening directly. Oh, and how many times have we heard Russians saying “Ukraine is not a real country”?

It’s unclear whether Donald Trump is in thrall to Russia for whatever reason or whether he just admires the kind of thuggery Vladimir Putin practises at home and abroad. Either way, the Russian model might look very attractive to Trump when he looks at Canada.

Canada, after nearly two centuries of sitting safely behind three oceans and next door to a friendly ally, is now more akin to 1930’s Poland, stranded between Russia and Nazi Germany. Except, in Canada’s case, there is no one to come to our rescue. Although millions of Canadians crossed the Atlantic to defeat fascism and defend democracy in Europe in two world wars, it is unlikely any European nation will go to war with the United States to defend Canada’s sovereignty, especially as the Russian bear threatens Europe from the east. In other words, we’re going have to handle this one on our own.

Before anyone panics it’s worth noting what Canada has available to it. It has the seventh largest economy in the world; a population of forty two million people which is highly educated and skilled; access to vast resources including minerals and oil; and is one of the breadbaskets of the world. Canada also has an impressive military history although that capability has been degraded through the neglect of Liberal and Conservative governments going back generations. And, despite any internal differences, I think it’s clear now, if it wasn’t before, Canadians are fiercely loyal to their country.

I am certainly no military expert so I offer the next few thoughts with that qualification. It strikes me as good strategy to develop our military capabilities so we can defend against isolated incursions and so that the cost of a larger invasion to an invading power is too great for it to bear. From my limited reading on the issue, I expect we need to rapidly and effectively spend hundreds of billions of dollars enhancing our defence capabilites, including a massive campaign to recruit and train new personnel. We should reexamine the contract with Lockheed Martin for the purchase of over seventy billion dollars worth of F35 fighter jets. Apparently, even when those jets are fully in possession of the Canadian Airforce, the Americans will retain the technical ability to disable them. For all the obvious reasons, this is clearly unacceptable and, if that vulnerability cannot be eliminated, the contract should be canceled and replaced with one with a European aerospace manufacturer. Canada should also proceed rapidly to replace its submarine fleet, avoiding American arms companies, and sourcing them from Europe or Asia. And, while on the subject of submarines, perhaps we should also be purchasing some that are capable of carrying and firing nuclear armed missiles. Those of you who have known me for a long time will realize how difficult it is for me to even contemplate a nuclear armed Canada but the blinkers are off and we have to create deterence that is real and effective, even to the most powerful nations in the world. Everthing must be on the table.

Aside from a military buildup, Canada must strengthen its economic position by diversifying its trading partners and making internal changes that make doing business easier in Canada. So far, the early signals on this front are good and, while it would have been good had we embarked on this path years ago, better late than never. We also must continue communicating with Americans, making the point over and over again, Trump’s policies towards Canada are, in the words of the Prime Minister and The Wall Street Journal, dumb.

Keep calm and carry on Canada.

Just sayin

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Trump vs. Canada: Round One

On February 1, Donald Trump signed an Executive Order authorizing 25% tariffs on all Canadian exports to the United States, except fuel, effective Tuesday, February 4. It also authorized 25% tariffs on Mexico. The “carve out” for fuel was only partial, with a ten percent tariff applied, presumably to lessen the impact on fuel prices in the United States. As recently as Thursday most commentators and advisors had been reassuring Canadians the tariffs wouldn’t happen or, if they did, would be much more selective and smaller. This, despite very clear messaging from Trump the tariffs were coming at the level implemented. The Executive Order also stated that if Canada or Mexico retaliates with their own tariffs the United States may increase the level of these tariffs.

The Government of Canada responded with 25% tariffs on a range of American products imported into Canada, as well as announcing additional tariffs on a much larger group of products effective in twenty one days.

On February 3, Trump announced a thirty day “pause” in the tariffs following conversations with Prime Minister Trudeau. This followed a similar deal with Mexico announced earlier in the day. Both these postponements were linked to “progress” in enhancing security at the U.S./Mexico/Canada border. In Canada’s case, it seems to be recognition of the border security initiatives the Canadian government announced last year, along with the appointment of a “Fentanyl Czar” and a commitment to increased cooperation between the two countries combatting drug smuggling at the northern border. How these tiny additions to the 2024 border security package would justify the threat and then removal of the nuclear option of a trade war remains a mystery and it’s hard not to feel Canada gave very little to achieve the pause. That said, Trump’s spokesperson, as well as the herd of devoted Trump supporters in the media, are trumpeting it as another great win for the President (right after beating up on little Colombia). Whatever I might think of that, it makes little sense to poke the bear at this point.

Now the conversation has turned to: “why are they doing this to us?”. Certainly, nothing in Trump’s statements justifies this level of action against Canada. The claims it is justified by the fentanyl epidemic in America, or the flow of undocumented immigrants into that country, simply don’t hold up when the data for Canada is consulted. Only a tiny percentage of fentanyl and undocumented immigrants come across the Canadian border, not to mention the flow in the other direction of undocumented immigrants, drugs and guns into Canada.

Trump also cites the trade imbalance between the two countries as part of his claim Canada is ripping off America. But, again, the data simply doesn’t support that. First, the numbers he quotes are wildly inconsistent with the facts even as documented by the United States government itself and, second, that doesn’t take any account for America’s huge surplus in services imported by Canada. Also, much of the disparity in goods is the result of America’s purchase of oil from Canada, oil it purchases at a significant discount by the way and, to be clear, America is not purchasing this oil because it wants to help Canada. It’s purchasing it because it makes good economic sense for America. If it wants to stop, it can and Canada will sell it elsewhere.

Some are now claiming America’s tariffs are designed to precipitate an early re-negotiation of the U.S./Canada/Mexico free trade agreement, although it’s not at all clear how that works. Why, if that is the goal, wouldn’t America simply have advised Canada and Mexico it wants to re-open the treaty early, allowing them to respond, perhaps positively, without the enormous disruption of a trade war? Also, with these actions, America is giving a clear signal to the world its signature on an agreement is worthless. What’s the point of negotiating an agreement with Donald Trump’s America if you don’t believe it will be honoured?

As someone who knows a fair bit about negotiations, I’m pretty sure this has little if anything to do with some kind of grand American negotiation strategy. It just doesn’t fit. At a minimum in any negotiation you want your opposite to have a good understanding of your objectives in the negotiations. Otherwise there is absolutely no path forward. And at this point Canadians are left to speculate on what the Americans want with almost no clarity coming from the other side.

From the day he won the election, Donald Trump has been saying he would like Canada to become the 51st state of the United States. I’m sure he does although I’m equally sure he hasn’t thought through the implications both for America and Canada, relying instead on some simplistic notion of “Manifest Destiny” or, more likely, fantasies of unlimited resources and water up north.

Canadians are experiencing a whole range of emotions in response to Trump’s aggression although I think anger, tinged with disappointment, has now become dominant. In one form or another, Canada has had a free trade agreement with the United States since the 1960’s. I remember the debates on the wisdom of linking ourselves so closely to the behemoth to our south; the concerns about Canadian sovereignty, Canadian culture, and Canadian values. But the first sixty years seemed to go pretty well, although the addition of Mexico in the 1990’s introduced new challenges and complexities for both Canada and the United States, and likely lit the spark that flared into American and, to some extent, Canadian opposition to free trade. But it is undeniable, although many try, that the North American free trade agreements led to economic growth and prosperity in all three countries. And for Canada at least, the fears about American hegemony faded until they were almost invisible.

It’s no exaggeration to say America and Canada have more in common than any other two sovereign nations in the world. And that commonality has lured Canadians into a dangerous disregard for the ultimate rules of relations between nations. First Lord Palmerston, and then Charles DeGaul, were clear that nations don’t have friends, just interests, and that, to the extent friendship does exist between two nations, it is never eternal. Because of the similarities between our two populations, our proximity, and the decades of peaceful, successful, co-dependence it’s not surprising Canadians lapsed into a rose tinted view of the relationship, something, by the way, the Americans never really did. At best, Canada was an afterthought, if any thought at all, a gentle, friendly and harmless giant to the north, one that could easily be dismissed with a stereotype of being the nice, but boring, cousin. The truth is Americans have never appreciated what an enormous advantage it was to have Canada on its northern border. Canada: safe, reliable and peaceful.

And if we needed any proof, the reactions south of the border to Trump’s outrageous provocations and insults provide it. Where are our American friends? The silence is deafening. Almost no American political leader (with the exception of the Governor of Michigan, Gretchen Whitmer) has voiced outrage over Trump’s behaviour and proposals. That’s also true for American columnists even in the most liberal American papers. Their criticism is almost exclusively focused on any potential damage to the United States of a resulting trade war. Not a word of solidarity with their Canadian friends, neighbours and cousins. So, Canada, it’s time to wake up.

No one is going to come to our rescue. Not the British Empire this time. Not our Commonwealth buddies. And certainly not NATO tip toeing around the vulgarian Trump. Yes, there will be statements. You know the kind: expressing concern, calling for dialogue, offering support for a rules based international order. And even these will tread oh so carefully around the fragile ego in the White House.

So, what should Canada do? For starters understand what we are dealing with. All efforts to find a reasonable, rational approach by America will fail. We are facing an insecure narcissist whose very existence depends upon endless validation and praise. Some may remember, shortly after Trump was elected, he was asked about Canada. He smiled and said something to the effect “we’re going to have some fun with Canada”. Most ignored it, but here we are. So, to be clear, there is no straight line forward. It’s not about border security; or trade imbalances; or defence spending; or claims American banks aren’t allowed to operate in Canada; or even about Canada becoming America’s fifty first state, and any effort to address any of these, whether through correcting misinformation or taking steps to seemingly address his imagined grievances will simply lead to new complaints; new lies and new exaggerations. As long as we play that game, we lose.

And the thirty day “reprieve” on tariffs is just that, a reprieve, leaving the threat ready to be resurrected as often as Trump wants. In other words, his “fun” with Canada could find us in a perpetual national crisis with each new threat causing us to ramp up our outrage and run frantically for cover. Eventually we’ll be exhausted and may even end up accepting things we should never accept.

There is a better way. It needs to be quietly and carefully developed and implemented. It may include playing for a bit of time to allow us to be better prepared to face each outrage, in which case the thirty day reprieve may be extended by months although most likely not years, but it also includes realizing the time will come when we must call his bluff. And, as any good negotiator knows, you don’t call a bluff unless you are ready to live with the worst possible outcome.

There’s another piece that no one is talking about: increasing spending on defence. Thus far, any discussion of this is around meeting the minimum NATO expectations and perhaps molifying Trump by doing so. But there’s a much more compelling reason for massively increasing Canada’s spending on defence: the actual military defence of our homeland. We have long realized there was a threat of some territorial dispute with a revanchist Russia, or China interested in the Northwest Passage. Well, now it’s time to add a new possible adversary and, as unthinkable as this would have been even a few weeks ago, America is on that list. As appalling as it is to acknowledge, it is not out of the question Donald Trump’s America could launch a military challenge to Canada’s sovereignty and, while even at the best of times it would be a David and Goliath contest, Canada must be prepared to respond militarily if necessary. That requires massive increases in the Defence budget and a refocussing Canada’s spending priorities. And it needs to happen quickly.

Mine is the last generation with any real connection to the Second World War. Prior to that war Canada was a largely rural country with a population of about ten million. Yet when challenged those people, my parents generation, rose and created one of the mightest militaries in the world, contributing greatly to the defeat of fascism and the victory of democracy.

They did it then. We can do it now.

Just sayin

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Fasten Your Seatbelts. It’s Going to be a Bumpy Four Years

One of the comments I received in response to my last blog where I opined on the risk to Canada of a new Trump Presidency described me as “a paranoid imbecile”. Imbecile maybe. But paranoid?

Two days ago private citizen Donald Trump sent out a post on his ‘”Truth Social” social media platform in which he said he would impose 25% tariffs on all imports from Canada and Mexico until they take steps that stem the flow of fentanyl and illegal entrants to the United States. And he said he would do this on the first day of his new administration, January 20, 2025. Never one to be bothered by facts, Trump seemed to believe there was a huge problem with drugs and illegal immigrants coming from Canada. Or did he?

In an earlier conversation, Donald Trump laughed and suggested it was going to be fun dealing with Canada in his new administration. That was the same conversation where he said he loved tariffs as somehow the answer to all the problems that are plaguing America. Clearly he has a thing about Canada and it’s not good. None of us really knows why although the gratutitous shots Prime Minister Trudeau has taken at him over the years, particularly since his 2020 defeat, have not helped. That, combined with the seeming consensus amongst his Cabinet nominees and closest advisors that Canada is some kind of socialist threat where the woke policies they hate and reject are firmly in place, undoubtedly contribute to his views as he assembles what is likely to be the American government most hostile to its northern neighbour in at least a century. And that is something we have little control over. What we can control is our response. Having spent nearly half a century negotiating contracts, most of them asymetrical, i.e. with one party more powerful than the other, and usually representing the weaker of the parties, I certainly have some thoughts on how Canada should be responding.

Even before the explicit threat, some of our politicians were auditioning for the role of supplicant in chief to the golden throne of King Donald. Premier Doug Ford’s public musings on throwing Mexico under the bus and Premier Danielle Smith’s initiatives to cut some kind of a side deal on oil exports surely opened the door to the kick we received a week or so later. And once it arrived Chicken Littles appeared everywhere. First, we have Premier Ford fulminating on how insulting it is to be grouped in with Mexico. Aside from the implicit racism in that statement, it is also profoundly stupid if we want to develop a coherent and effective strategy to deal with the bully about to be reinstated in the White House. Not to be outdone, Premier Smith stated how difficult it would be for Alberta to be part of a united Canadian front given the presence of Prime Minister Trudeau. Also worthy of mention is Saskatchewan’s Premier Moe who, just in case we forgot, wanted the world to know he agreed with Alberta and, what’s more, agreed with Donald Trump that there was a huge problem with illegal immigration and fentanyl imports across the northern border despite all evidence to the contrary. By comparison, the federal government was mostly restrained, but not completely, with the Prime Minister immediately initiating a panicked phone call with Donald Trump and expressing gratitude he took the call, and then saying Canada would “prefer” a settlement that included Mexico which doesn’t exlude the possibility of him joining the “throw Mexico under the bus” mob at some point down the road.

All this is music to the ears of Trump and his advisers. We could practically hear the laughing and high fives at Mara Lago all the way up in Vancouver. The bully got the response he wanted and I guarantee he will now return to that playbook over and over again. He wants Canada to abandon supply management of dairy products, something I agree with by the way, so he threatens massive tariffs on the Canadian economy if we don’t. He wants Canada to end the digital service tax so, again, he threatens massive tariffs. He wants Canada to massively increase spending on defence so, again, the threat of massive tariffs. The list goes on and on and only includes the issues we are already aware of. What if, for example, America decides to engage in yet another unjust war somewhere and wants Canada’s support. Well, you know the drill.

So, what should Canada do? Well, for starters, shut up. There’s no need to respond to every provocation from Donald Trump except to say we are aware of it and we are working with our partners to ensure a careful and effective Canadian response. And, by the way, those partners must include Mexico. Canada imports approximately $485 billion of goods from the United States annually. Mexico imports approximately $455 billion. Canada is America’s second biggest market and Mexico isn’t far behind. Except for China, no other nations even come close. Between Canada and Mexico, nearly a trillion dollars of U.S. goods flow into those two countries. So, that’s a starting point. Some perspective.

No one would win an all out trade war and it’s likely Canada and Mexico would suffer more than the United States, but all would feel considerable pain. So, how do we calibrate just the right amount of push back while, simultaneously, showing the Trump administration this is not a path they want to go down? Well, for starters we don’t begin by offering terms of “surrender” before we even find an appropriate negotiating forum. And that is a problem right now. Donald Trump is not the President of the United States, Joe Biden is and will continue until January 20th so deciding how to engage with Trump is complicated but not impossible. In fact, in some ways, that’s the least of the problems.

In anticipation of the negotiations wherever and whenever they occur, Canada must assess what the Trump administration really needs and also what Canada’s core objectives in the negotiations are. We must also determine where Donald Trump is vulnerable and over what time, remembering there are mid term elections in the United States less than two years after he takes office. And, most important, Canada needs to game out any number of strategies and outcomes from the best to the worst and then plan its response to each. Oh, and never forget, the all out war approach always favours the more powerful party.

In parallel with this strategizing, we should reach out to allies, starting with Mexico with whom we need very close coordination, and including American business leaders, states potentially most damaged by the tariffs or by countervailing duties from Canada and Mexico, and friendly voices within Trump’s orbit.

And in the meantime, as the clock is ticking down to January 20, we must exude calm and confidence. Thanks to the initial reactions from some Canadian political leaders, we are already on our back foot and that’s unfortunate but not fatal, at least not yet. I don’t underestimate the difficulty of getting the Canadian choir to sing from the same songbook but, if Canadians generally support this approach, most will fall in line and the rest will just have to be marginalized.

And so I end with the British motto from the Second World War: “Keep calm and carry on” while the hard work is occuring out of public view.

Just sayin

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