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Canada's finance minister quits over Trump tariff dispute with Trudeau
Seems like Trudeau is floundering for some ways to keep his job and his head economist didn't approve. I'm not sure why Trump wants to mega tax Canada but it certainly can't have helped. This may end up bringing down the Trudeau government.
I wonder to what extent Trump's win will inspire regime change in western Allies.
The panic in Canada, Mexico, and Europe over Trump's tariff proposals has revealed how weak these countries are in relation to the U.S. It's basically a meme at this point. "While you were relaxing in cafes and expanding pension benefits, we were mastering the
bladeLLM. And now you have the audacity to come to US for help!?"Why should the Trump administration open U.S. markets to regimes who fought his election, in some cases quite directly?
They backed the wrong horse, and now its time to pay the piper. Trump's tariff threats are pretty savvy, and I think he will be able to extract valuable concessions on migration and defense. But better yet would be if these countries join the movement themselves, align their policies with the (IMO more forward thinking) American policies, and get better treatment as a result.
I assume you mean heavy tariffs against china in a futile bid to turn back the time and reindustrialize. I don't understand how diminishing trade between US and allies is supposed to convince them to end their trade with china. When one supermarket's closed, you go to the next one.
If you don't understand, it would probably help to work on the metaphor.
A tariff barrier is not a closing of a supermarket, not least because tariff barriers already exist between American allies. That is what the EU common market is- a trade barrier between the European group of allies and their other allies, including the Americans, the Brits, and so on.
Even more relevantly, a threat of tariff barriers is not a closing of a supermarket either, particularly when everyone (should) understand that the threat is conditional on [insert trade / political concession here]. The conditionality is critical because it can be used to create and either-or dilemma of which supermarket the consumer goes to, as opposed to the consumer has no choice.
The rise of deglobalization and the multipolar world order is not a close off of markets entirely, but a process of choosing / forcing choices of which markets to associate with. Globalization may have been a 'choose any supermarket you want' dynamic, but deglobalization is a mutually exclusive membership program, where association with one supermarket will lead to increasing limits with the other.
The issue for some countries, of course, is that the two supermarkets are not anywhere near to competitive in attractiveness. The European Family, for example, is not going to fine any meaningful offers from ChinaMart on in the 'expeditionary armies to fight in your defense' market, particularly when ChinaMart is close business partners with 'WeSwearWeWon'tBlackmailYou' Russian Discount Gas, which is currently in a special hostile takeover operation against the cousin down the street.
It’s a supermarket simultaneously raising its prices while rolling out an anti-competitive new policy where you can’t buy there if you also buy from the competitor. It assumes that the supermarket has infinite leverage, that it is so unilaterally indispensable that the customer has no choice. This kind of blackmail works until it doesn’t, like russia banking on europe’s gas dependency.
Psychologically, people prefer a less competitive supermarket to being coerced in that way. I think you overestimate your leverage, and how “rational” your customers are. I’m way more pro-american than average, and even I think US allies should tell trump to take a walk.
Who knows how "rational" Europe is in this scenario but the US has a lot of leverage. In a world where
Europe is now
The only way for Europe to collectively mitigate these problems is to build a large military, quickly, or to develop European autarchy, relieving the need to trade with China (or possibly both!) But Europe hasn't demonstrated the ability to do that. Building a conventional navy is extremely expensive and the requisite nuclear capability is fraught (I can absolutely see Russia attacking Poland if they try to develop nuclear weapons). And this is assuming Europe can pull this off in perfect harmony instead of getting locked in another European arms race or getting dominated by the only European power with nuclear weapons (France – I doubt England splits from the US and I'm counting Russia as its own thing.)
I dunno the exact numbers involved so who knows how the math plays out. But to me it seems like the supermarket has a lot of leverage.
The relative cost of this goes down the more nakedly transactional the US gets in US-European relations. If your choices are to get bent over a barrel now by the US or maybe get bent over by a barrel later by China, cutting a deal with China is going to start looking a great deal more appealing.
A large part of US power is that it doesn't demand very much of its allies (occasional Article 5 moment aside); the more the US tries to treat its allies like vassals or tributaries, the weaker that soft power grows. And if you're stuck dealing with a transactional superpower, you might as well go with the one offering money instead of demanding it.
Give me your scenario for a US-EU war.
Yes, I agree with this. I just think that trading with China is more expensive than it seems up front because it raises a lot of vulnerabilities that need to be mitigated against (or Europe can ignore them and then risk the outcome). But who knows, maybe it's best to run the risk and not mitigate in the long run since you can ramp up profits in the short term!
Well, my point here is more that if the US and EU (broadly) aren't allies, the EU would need to plan for a potential conflict with the US, otherwise they are at the mercy of US coercive diplomacy. (I'll just add that the EU pivot to China is me accepting Tree's scenario - I'm not sure how likely this is.) I don't foresee a near-term US-EU war (in part because I am not sure "the EU" will end up being unified enough to be a military alliance) but I don't think adopting a policy of non-defense is the wisest long-run strategy - even if the United States doesn't take advantage of it, others might. I will add that at least one German defense commenter I've read has spoken about the need for Europe to secure itself against the US militarily - I am not certain if that's remotely within the Overton window, possibly it's just literally one guy. But it's an interesting perspective to read.
But, hedging aside, scenarios are fun, so, a hypothetical:
The year is 2039. It's been a bad decade for American relations with Europe, between the President's 2026 revelation that FVEYS had been aware of Ukraine's plans to sabotage Nord Stream, the 2027 "annexation" of Greenland - accomplished without Danish consent via a referendum in Greenland - and the 2029 Sino-American war, which ended as abruptly as it began when the United States retaliated against a devastating Chinese conventional first strike on its naval and air assets by using nuclear weapons against the Chinese amphibious fleet in harbor.
It's also been a bad decade for Europe generally. Since their pivot to China, they've been subject to escalating tariffs from the United States. Their new chief trade partner is still finding unexploded mines in its coastal areas, and has been spending money on domestic disaster clean up - as devastating as the US nuclear weapons strikes were, the fallout from Taiwan's missile attack on the Three Gorges Dam was more devastating, even if it was not radioactive. And Russia, still licking its wounds, has not been inclined to forgive or forget the EU's support for Ukraine - which still weighs down Europe considerably, as Russia's destruction of its energy infrastructure has resulted in Ukraine drawing power from the European grid, starving it of resources.
Perhaps it is to distract from the economic malaise and renewed impetus for Catalan secession that Spain has been pushing the issue of Gibraltar harder than usual, and in 2039 a long-awaited referendum takes place. To everyone's surprise, Gibraltar votes - narrowly - to assert its sovereign right to leave English governance, opening the door to its long-awaited return to Spanish territory. However, England refuses to recognize the referendum, citing alleged voter irregularities, possible Russian interference, and the facial implausibility of the results given past elections, and moves to reinforce Gibraltar with additional troops. The EU makes various official statements, resolutions, and pronouncements that England is to respect the will of its voters.
When England refuses to respond to Brussels, the Spanish military overruns Gibraltar's tripline defense force. England responds with airstrikes from its naval task force, only to lose her only operational aircraft carrier to a Spanish submarine. Deprived of air cover for a surface fleet, England plans to conduct a far blockade of the Strait with nuclear submarines and, to facilitate this, launches cruise missile strikes on Spanish maritime patrol aircraft. Spanish intelligence assesses that US recon assets were involved in facilitating the strike, and retaliates by announcing the Strait of Gibraltar is closed to US traffic, contrary to international law.
The United States, which has already provided material aid to England during the conflict, declares a state of war exists between the United States and Spain (again!). With US naval assets depleted due to the war with China, Congress issues letters of marque and reprisal, authorizing the search and seizure of any ship that is or may be carrying military or dual-purpose goods to Spain.
In practice, this is nearly any ship with a European destination, and US venture capitalists have a very broad definition of what constitutes "dual-purpose goods" and "Spanish destination." It's not long before all of continental Europe of smarting under the humiliation of having their ships boarded and cargoes seized by American privateers, who within six months are operating effectively in both the Arabian Sea and the Atlantic. With Spanish naval assets tied up in a game of cat-and-mouse with British nuclear submarines, Europe must decide whether to continue enduring the consequences, or commit its naval assets to breaking the Anglo-American stranglehold and restoring its freedom of navigation.
(Do I think any of the above is likely? Not particularly. But it was fun to write up! I'd be interested to hear your scenario.)
That was a fun read!
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