You all know how it begins:
“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair.”
Dickens’ comparison of London and Paris on the eve of the French Revolution has an uncanny twin today, between Canada and Mexico. Dickens’ basic theme was that injustice and cruelty only spiral ever-further downward, and can only be stopped by not responding (or better still by responding with compassion and love).
Injustice, poverty, and hatred were the causes of the violent cycles in Dickens’ novel. With respect to Mexico and Canada today, it is Donald Trump (“what’s the difference?” you ask–point taken). Both countries have a long list of Trumpian grievances. Trump basically tore up the USMCA (aka CUSMA or T-MEC) trade agreement which he previously called the “largest, fairest, and most balanced trade agreement ever negotiated,” and which he negotiated. He routinely referred to Canada as “the 51st” state and the Canadian Prime Minister as a Governor. He said drug cartels–not the Mexican government–are in charge of most of Mexico. Canadian Prime Minister Mark Carney noted ominously that he had reviewed contingency plans in case the US attacked Canada; several senior US government sources have confirmed Trump directed the Pentagon to produce plans for direct attacks on cartels inside Mexico. Trump began his first campaign for the White House by saying Mexico wasn’t sending its “best people” but rather criminals and rapists to the United States; he said Canadian leaders were “nasty people” who feel entitled. I could go on, but the point is, there is no clear winner in who was more aggrieved by his words and actions.
And yet, US bilateral relations with each are in radically different conditions. And that is due to different takes on what leadership is, and how to separate the personal, the political, and the professional. Let’s start with Mexico. If you had to predict which country was in for the roughest treatment by the first Trump administration back in 2017, Mexico was the clear loser. Trump ran on the challenges posed by unrestricted drug-smuggling and illegal immigration, both focused on Mexico. In Mexico City, Trump faced a socialist/populist in Andres Manuel Lopez Obrador (AMLO), then his hand-picked successor Claudia Sheinbaum, a woman with a Ph.D in energy engineering. The personal and political friction points were large and numerous. Yet somehow, these odd couples found ways to work together.
AMLO and then La Presidenta (as she is known) learned to ignore some Trumpian comments, regardless of how crass or offensive they were. Both leaders recognized the historical fact that living next to the American behemoth was more often a blessing but occasionally a curse, and better not to prolong the latter. When Trump said something out of bounds, they responded primarily to their own people, objecting without engaging in reciprocal rhetoric. Mexico’s socialists threw fits at their failure to taunt back, but both leader’s approval ratings remained strong.
More importantly, AMLO and Sheinbaum listened to the substance of Trump’s complaints, and even when they disagreed with that substance, they responded to it. Both curtailed the immigration flow north by intercepting the migrants and offering them haven in Mexico. AMLO disputed the notion of Mexico being a cartel state, as did Sheinbaum, but she went after the cartels with “more than hugs” and even started extraditing more convicted Mexican drug cartel leaders to the United States, a previous sticking point between the nations. Both leaders quietly increased cooperation with US law enforcement and intelligence elements, improving security conditions remarkably. Most importantly, Sheinbaum avoided a tariff war, moving to get more of Mexico’s products under the existing trade agreement tent, safe from tariffs (in general). Sheinbaum even instituted controls to prevent China from evading American tariffs by repackaging products through Mexico.
The results? While Trump still rails on at times, he is quite complimentary about Presidenta Sheinbaum. Plans to attack the cartels are on hold, even as opinion polls in Mexico show a majority looking favorably at anything which reduces cartel control in some areas. Economists are mystified by the “SuperPeso,” a currency which has been gaining value against the dollar, when Mexico is clearly under-performing economically and over-spending politically. Analysts suggest it demonstrates the fundamental view that Mexico’s leadership is positioning itself well in a turbulent, uncertain future.
North of the border, things were quite different. Trump’s taunts at former Prime Minister Trudeau led directly to the defeat of a more conservative candidate with a Trumpian “Canada First” slogan, and the rise of Mark Carney in the Liberal Party. Carney was an international banker and mainstay of the liberal democratic order: degrees from Harvard and Oxford, Goldman Sachs managing director, Governor of both the Banks of England and Canada, and UN Special Envoy for climate and finance! But Carney campaigned as the antidote to Trump’s threats, a polished international operator who would not be bullied. This was the key to his success, but also boxed him in.
When Trump announced his “Liberation Day” global tariffs, most of the world simply accepted them or tried to negotiate them down. Only two countries retaliated: China and Canada. China was very successful, going head-to-head and eventually backing Trump down. Canada just dug in. Carney initiated a policy outreach based on the notion the Americans were no longer stable partners, and the middle powers of the world had to band together, treating the US as just another aggressive power. This played well in the liberal/social-democratic precincts of the world, even as those same countries pleaded for more US support against Russia, China, Iran, etc. It played even better in Canada, where previously quiescent national pride awakened. Carney’s gambit continues: America and Canada have embarked on another round of tariffs, Canadians are boycotting America and its products, and the government in Ottawa is seeking a “special relationship” with China and “associate membership” in the European Union. All this to protect Canadian independence and sovereignty. Read those last two sentences again.
The results are far more uncertain. Yes, Canada has protected its dairy industry, but opened the door to Chinese autos/EVs, which have devastated European competitors. Most analysts have doubts Canada will do better than Volkswagen did. The extremely integrated North American supply chain has frayed, and about 40% of Canadian producers are considering moving production to the US. Canada is considering cancelling military orders for US-produced equipment, yet it has not found a means to cover the military spending commitment it has pledged to NATO. Future Canadian leaders face the challenge of more than doubling defense spending, requiring some combination of tax increases, social spending reductions, and/or deficit spending. And that’s just for its defense commitments.
Some Canadians like Ontario Premier Doug Ford are goading (Trumpian-style) the Ottawa government to go further: cut back on oil exports to the US, or restrict electricity sent south across the border in power-sharing agreements. This is an excellent example of both the depth and incoherence of Canadian popular anger. America does not import Canadian oil for internal use; it imports the raw (sour) Canadian crude to refine it for resale, in a mutually-beneficial arrangement. American refineries can get similar crude in bulk just as easily from Venezuela, but the pipelines come from Canada. Canada can not just as easily find new refineries and sufficient supertankers to move the crude. Likewise, some of the Canadian power lines transit America, so cutting them off would also turn off some Canadian users. Not to mention, the power sharing is two-way: Canadian hydro-power comes south to fuel New England’s summer air conditioning, while New England’s excess goes north to heat Quebec during the winter months. Guess which is more critical?
Canadian popular opinion is if anything more solidly behind Prime Minister Carney than when he was elected, although I would note he is nowhere near as popular as Presidenta Sheinbaum. But the effects of Canada’s policy stance are only now coming into effect. Welcoming China into your economy is a silly way to secure economic growth; it has never worked for any country. Likewise pledging fealty to the European Union is an odd way to show that your country is fiercely independent. I won’t even bother to explain why a “Middle Powers” approach to national security is ridiculous.
None of the foregoing is to suggest Canada or Mexico shouldn’t be offended by the many slights of President Trump. They have every right to respond, as proud, sovereign nations. What I am pointing out is there is a smart way that may feel less proud but is way more effective, and a rash way which is far less so. The Three Amigos have not always been friends, but they learned to live and work together to their mutual benefit for most of the last century. The Trump administration is an aberration in that history (and in the very nature of diplomacy), but it needs be only that: a spat, not a permanent divide. Mexico it seems has realized that and is preparing for what comes next. Canada has embarked on a separate path: suggesting the US is no different than China, and beginning to emplace real economic and diplomatic policies that might prevent a return. Prime Minister Carney has formally called out that goal repeatedly. Perhaps he is just playing to the sway of popular opinion, but perhaps not.
Having staked out the position as the man who could stand up to Trump, Carney has now doubled down on it, and he can hardly abandon the course, consequences be damned. Thus far those consequences are minor. For the US, foreign tourism (especially from Canada) has declined, but it represents less than one-percent of US Gross National Product. Economists point out that while Carney’s counter-tariffs are popular, they represent the same ridiculous self-taxation that Trump’s tariffs do! Foreign policy types opine that Canada’s searching to replace America as an economic and military patron is doomed to fail. And while it is smart to diversify a nation’s economic relations, it does not make sense to ignore comparative advantage in the process.
One day in the not too distant future, the Trump era in America will be over. The North American continent will remain the same, and the need for stable relations will be unchanged. “Elbows up” is a great hockey slogan; not much of a national policy.
