Number one, there is a rupture. Number two, it's permanent. Number three, that requires hedging behavior. So, I'm on board with all of that.
Welcome to Good Question. Canada's trade relationship is obviously top of mind when it comes to the United States, but these days it feels like just one of the risks America poses to Canada's well-being. So, let's get into it with someone who measures risk for a living. Ian Bremmer is CEO of the Eurasia Group and founder of GZERO Media. Ian, great to see you.
So, let's start with trade because it is a preoccupation in Canada, although as I say, it sometimes feels like we should be worried about other things. It feels as though we are very far apart in terms of getting somewhere that will represent kind of economic stability for Canada.
Well, so much is relative context. I mean, Canada and the US remain a lot closer together than the US with a lot of other countries around the world. The US-Mexico-Canada Agreement, or KUSMA from Canada's perspective, continues to allow for the exemption of most goods that are traded between the two countries. So the effective blended tariff rate between the US and Canada is a lot lower than the headline tariff rate that has been threatened. And that's why despite the disagreements, we haven't seen the United States suddenly throw Canada into a deep recession. So yeah, I agree that clearly the unilateral decisions by President Trump specifically and by Secretary of Commerce Lutnick have been difficult for the Canadians to effectively navigate and respond to. And there's no amount of hedging with middle powers that is going to suddenly right that ship, right? Because the US is overwhelmingly not only the most powerful but also the most integrated trade partner with Canada in tourism and technology and all the rest. But you know, I wouldn't overstate the level of uncertainty that comes from that unilateralism.
Well, let's hang on that for a second because it feels—it's clear actually, it feels like it because it's true—that our last round of close negotiations, we got pretty close to getting somewhere. And as I understand it, the reason Canada pulled back is because that kind of ability for unilateral 301s or 232s was not going to be taken off the table, and that was something that we could not... Should we give in on that, Ian? Should we say, in order to get kind of the majority, we will sacrifice certainty?
It's not for me to say, first of all, that this is about Canadian sovereignty and national interest and preferencing. So I mean, there are trade-offs. These are serious trade-offs that involve the well-being of the Canadian people. But I would say that Trump is about to lose midterm elections, or at least his party is. And I expect that's not just the House, but also the Senate will actually flip to the Democrats. And I do think that there are an awful lot of politicians in the United States, in states that really rely on consistent access to Canadian tourism and Canadian trade and Canadian commodities and energy, that will be very upset about a policy that they believe puts Trump above the interests of the American people. And an effective response to Trump for a Canadian prime minister who will be in office well beyond Trump is to focus on engaging those political leaders, Democrat and Republican. So I think that long-term there is less at stake here with pushing back harder against Trump. And certainly at some level, I mean, if the Americans are saying that they want to have essentially veto power over Canada's trade relations with other countries, I mean, there are very few countries around the world that would accept that. And Canada, not only because they have leverage, but also because Canada's a very wealthy country—I mean, Canada's not Ukraine, Canada's not Laos if you want to look at Chinese influence. Canada's, you know, itself a G7 country. And they're an energy superpower and they've got extraordinary resources and they're an advanced industrial democracy. So I think that there is less at stake here. Even though for all of the Canadians who live just above the United States and therefore are massively impacted by America's information environment, political environment, not just its economic decisions, this feels very urgent, but I wouldn't overstate it. I wouldn't overstate what is being decided in the near term as we think about America's relationship with Canada going forward.
I think that's helpful—that's helpful dialing down. I like it. I actually, there's a lot to unpack in what you have said. I want to start with whether you believe the polls, because we've seen polls to be obviously woefully wrong in recent years. There is this sense that the Democrats will do well, as you say, both House and Senate. Do you believe it?
We've got polls. We've got prediction markets. We've got the reality of how Trump is doing on key issues that matter to the American people. He's been very effective on border security. He's been very effective on Latin America. He's been a disaster on affordability and on the Middle East and on Europe. And Americans are unhappy with him. Midterms are generally anti-incumbent, and they are generally low turnout, high information, voter consolidated. And right now Trump's approval—blended approval ratings are about 36.1%, which is the lowest of either of his two terms. They are particularly low on the economy, where he had been reasonably stable and high for the entirety of his first presidential term. And not only that, but the level of support among his supporters is very weak. And that implies that there are just going to be far fewer Republicans actually turning out. And I know he's promised $5,000 checks for everyone in the country if he actually is able to keep the House and Senate. I, for the life of me, I don't know why he didn't say $5 million checks, because they would be equally likely to appear. I mean, which is zero. This is magical thinking, right? And that's why it's not moving the polls. People don't believe—people voted, many, many people, including independents, many people voted for Trump because they were angry about a two-tier judicial system, a two-tier legal system in America where a small number of moneyed elites close to power could do anything they want, could write their own rules, and everybody else was screwed. And they believed that Trump was going to drain the swamp. They believed that Trump was going to go after those interests and wouldn't be enriching himself at their expense. And what they've seen is that Trump has enriched himself wildly at their expense. They believe that there wouldn't be new wars under Trump, that he would end them and there wouldn't be costs from that. He wanted to get out of Afghanistan and gave the store to the Taliban so that Americans would no longer be fighting. And now he started his own war. We're eight months in and he said, 'Well, that's not going to end until at least after the midterms.' It's costing the average American not just at the pump, but at the grocery store and everywhere else. So they're angry that Trump has failed, that Trump has been incompetent and out for himself. And that does not imply that they love the Democrats, but it is going to really hurt him in the midterms. No views on 2028, but for November, he's going to get pounded. And I think there is no October surprise that is going to hoist him out of that trouble.
So, and it's interesting because you will have observed, as many have, that while that kind of disaffection, that sense of injustice may have got him to power, you know, we know many wealthy Americans on both sides of the aisle and entrenched Republicans who know better, who have supported Trump because it was in their interest to do so. Whether that was sort of tax treatment for the wealthy or just kind of riding a popular movement by entrenched Republicans. Do you see those things changing now? I guess what I want to know, Ian, is will Republicans in government start to do what they might have done, which is check him a little bit?
I'm going to answer that, but I need to push back first.
Because you said 'who knew better'—'who otherwise knew better.' I don't know what that means. I mean, if you're a wealthy American voting for Trump, you know what your revealed preference is: it's that what you care about is your financial well-being, yours and that of your family. And that matters much more to you than anything else. And so if that's how you're spending most of your time—I mean, most of your waking time is working in favor of a mission that you may not be aligned with on values, but it's making you money—then I mean, why would your political approach be any different? I mean, that's the big problem we have in America right now: is so many of the richest and most powerful Americans turn out that is literally the only thing that they care about. And that the American dream and American values for the most powerful has not been about liberty and freedom of speech. It's about money. That's the one thing that we can say has become the dominant American value: is cash and the status that comes with that cash. And certainly for a relatively small number of extremely powerful Americans, Trump has facilitated that for them. Now, I do think that an 80-year-old Trump who is deeply incompetent on matters of policy—very intelligent, but deeply incompetent on matters of policy—and not willing to take advice from those around him that are more capable in their areas of expertise as he was in his first term, I think that a lot more Republicans are going to bolt from him, in part because they have a longer-term perspective of their own political careers than the two years that are remaining for Trump, and in part because Trump's own policies have now been conflicted in terms of the benefits that some of these people are not getting from them. I mean, tariffs have hurt a lot of wealthy American donors to Trump. The Iran war has hurt a lot of them. And so I think that there is a growing amount of friction that will lead to a lot of Republicans publicly jumping ship after midterms are over, when so far it's been foreign leaders that have pushed back, but American Republicans that have found a way to get along.
I guess what I mean when I say 'know better'—and you're right to call me on it because it's a value-laden expression—I think they should know better. I guess it seems to me that in the past, while financial interests of course motivate the wealthy, perhaps even more than anybody, but they motivate everybody. We know elections are won and lost on how people are feeling about their pocketbook. It does seem to me in the not-too-distant past that Americans of all stripes understood that caring for one another was good, that immigration on balance was good, and that even illegal immigration can be managed in a way that can be humane. All of these sort of things that we seem to have moved away from, and I guess I wonder whether we move back. Is this a temporary blip or is this a new way of thinking about these issues in America?
So I think that what will be temporary is a president who consistently puts his own interests above those of the country. I don't think there's anyone on the Republican or Democratic side that will do that the way that Trump has. Whether we're talking about, you know, sort of ensuring that TikTok is aligned with buddies of his and that that's the most important thing he wants from the Chinese for a year, or whether it's crypto deals with Pakistan, flipping the importance of that relationship over that of India for the White House, or whether it's the amount of time that's being spent on getting his name on the Kennedy Center or building a ballroom in the East Wing, and on and on and on, right? And I mean, these have been the preferences of Trump at the expense of America's long-term national interest. I don't think any Republican or Democrat that replaces Trump in 2029 will do that. Then you have the broader structural conditions that many Americans, like many Europeans, increasingly oppose comparatively open immigration regimes—certainly illegal, but legal as well. That is something that I don't care who you put in. You're going to have a recognition that a Biden immigration policy is a loser, and they're not going back to that. Free markets, supporting open trade, that is a loser for Democrats and Republicans. And instead, you're going to see consistent focus on industrial policy and support for tariffs. Even if it's a Democrat that comes in in 2029, that will be consistent. Burden sharing for collective security, an unwillingness to promote foreign aid and promotion of rule of law all over the world—those things are changing. And that's been growing for decades. And that is one of the three major antecedents that led to the rupture, as my friend Mark Carney puts it, or the G-Zero world, as I put it back in 2012. Now, that's going to be consistent. So I said what's going away, and I said what's staying. And then there's a third bucket, which is what we're not sure about. And what we're not sure about is the ideology that underpins US foreign policy. So here there's a big question for Europe. The Europeans have been deeply worried that President Trump does not support a strong EU. In fact, he supported Brexit, and he supports the AfD in Germany. He supports the National Rally, Le Pen's party in France, Viktor Orbán in Hungary. And some of this are just people he happens to get on with. But some of it is this idea that really was infused in the national security strategy last December that was written by Michael Anton in the White House. And that is a more civilizational orientation to American foreign policy. And that what makes America great is not the values that underpin universal citizenship. It's not a melting pot, but rather it is an ethnic, a cultural, a religious identity that certain political parties in Canada and Europe are interested in upholding and others are destroying. And JD Vance made this point clearly when he went to the Munich Security Conference a couple of years ago and refused to meet with the German chancellor but did meet with the head of AfD for dinner. Marco Rubio made this point clearly when he was speaking in Athens last week. And so I think there is a really open question about the future of American foreign policy under a more MAGA-oriented civilizational ideology, or whether a return to a conception of the United States that is more universalist and based on, let's say, indispensable human values—that's of course, you know, sort of what drove the Americans to create the United Nations after World War II.
And in this context, I mean, you obviously—Mark Carney's Davos speech was a reference to this unfolding. Canada is, as you referred to, the middle powers. I mean, it wasn't that long ago that people didn't want to refer to Canada as a middle power. We're busy kind of coalescing support with Europe, finding, you know, new friendships with India and China. There are risks in all of that for us. But would you consider that the right thing to do? Is that the right strategy for Canada, given that the US may have this lasting shift in how it wants to play its role in the world?
Well, number one, there is a rupture. Number two, it's permanent. Number three, that requires hedging behavior. So I'm on board with all of that. There is permanent damage that's being done to America's relations with not just Canada, but many allies around the world—much less so in Latin America, much more so in the Gulf and Europe, and Canada in between with the Asian allies. Having said that, the most powerful middle power in the world is the European Union, and they are enormously impacted by three different geopolitical drivers of rupture. Now for the Canadians, you look at rupture, you look at the G-Zero, and what you feel is the United States is unpredictable and unreliable, and that's affecting you the most. You know, even saying, 'Well, we're basically at war right now with the United States,' which of course is not true, because there'd be tanks across the border. But certainly it feels that way given how close and how aligned they've been. I mean, you know, having said that, the G-Zero has been caused by three things. One is America no longer wanting to lead the way they have historically. Second is China becoming integrated in the global order but not aligning with political and economic values and systems, and instead still being a consolidated authoritarian state capitalist. And the third being Russia never being integrated into G7, NATO, or EU, very angry about it, and becoming a revisionist power. And if you are Europe, all three of those things are deeply problematic for you. All three. And furthermore, the 27 countries of the European Union do not equally prioritize those three things. So it is very hard for Canada and the Europeans to create a middle power alignment that other countries around the world would get behind, since the Canadians are most concerned about the US and the Europeans are most concerned about everything. And the Europeans, as much as they are making progress in defense spending and in consolidating capital markets among the E6, the largest European economies, and developing more industrial policy, they are also facing significant internal ructions from the rise of the AfD in Germany and most worryingly from the real potential—probably a coin flip at this point—of Le Pen winning in France. And if that were to occur, the limitations, the constraints of a Canada middle power strategy will become much more apparent in very short order. So again, the variable geometry—different countries aligning on different things as middle powers have both the power and the interests coordinated. Yes, of course, the idea that you want to engage more with the Indians—that relationship was pretty broken, even with the Chinese in certain areas, certainly with the Japanese, certainly with the Europeans—all great, but all incremental and very limited. It's not a holistic strategy. It's important. It's overdue. If the Europeans had had a middle power strategy 30 years ago, we would be in a different place, right? Because they wouldn't have been just riding a peace dividend that was going away. The G-Zero tells you that you've got to stop believing in the peace dividend. And the G-Zero tells you, hey Europe, you need resilience, you need defense, you need industrial policy, you need technology, you need productivity, you need growth, you need a more integrated EU. And yet they were utterly unconcerned about that for decades. And so the fact that it is the Canadian prime minister who is the first to put his flag in the ground on G-Zero, and the Europeans are still like trying to figure out what the hell the EU is—27 or bust—that is a real challenge here.
So, we're a couple of weeks away from a meeting in Montreal where I think we'll get some more clarity on what this sort of associate membership status that the EU will bestow on Canada, whatever it means. Can you drill down a little bit into what you're talking about in terms of what it will mean if—because France is one of the EU countries that hasn't ratified our trade agreement. Of course, I mean, there's still lots of signs of lack of cohesion where Canada's concerned. I know there's lots to concern ourselves with in terms of how Europe comes together, especially around Russia, and I do want to talk about that. But from Canada's point of view, will it be symbolic only, given everything you said about their own internal kind of fractiousness?
I think that associate membership doesn't matter very much. I've not been particularly interested in that title. I don't think that the prime minister is either. I think that was more the interest of Ursula von der Leyen, and she pursued it. But other Europeans have taken it up because it looks good that the Canadians want to join in some way, right? They're still attractive. And then they've had some wins too. Let's—I mean, let's recognize Orbán, who's been the most fractious anti-EU member, more aligned with the Russians, more aligned with the Chinese, was drummed out of power for his personal corruption, for putting himself above the Hungarian people, and replaced with a true right-wing populist, but who believes in the EU, with Péter Magyar. So I mean, there it's not all negative. But I think that the importance of the Canadian outreach and alignment with Europe is much more about strategic pillars that the Europeans have, that the Canadians have, like for example the commodities capability, the energy production, the ability to site and source data centers, for example, education—that if aligned, if put in service of mutual benefit, will make both stronger. I mean, what we lack is supranational governance. We lack supranational resilience. And I think that Mark's effort to better integrate Canada with the single most successful supranational governance experiment that the world has seen so far, in focusing on those pillars, will be to Canada's national advantage long-term and will make Canada a stronger ally for the United States when the US decides to come back and start repairing some of these relations, which it will do. I mean, again, even if the Americans decide that they're going to turn to a civilizational foreign policy in 2029, that president will want to repair and rebuild bilateral relations with Canada. And a Canada that at that point has strategically better aligned itself with the bastion of rule of law in the world today, which is not the United States, it's the EU, right? Even if they don't have the growth and the productivity, that will redound to Canada's benefit, that will ultimately redound to America's benefit as well.
Between now and then, it sometimes feels, Ian, as though we have these conversations here and in the US and elsewhere. The threat from what's happening in Russia feels kind of existential, and it feels like it could blow up into something that will have all of our attention for some time. And maybe you think I'm overblowing that, but it does feel as though we're at the risk of plunging into a third world war of some kind, and it will be one that we've not seen because of the technology. What's your take on where we stand and how volatile that is? Because the US is playing a very dangerous—to my mind, a very dangerous role.
I'm much more worried about Russia than Iran. I think in Iran, the Americans and the Iranians are trying not to lose. I think that the Russians are trying to win, and they are clearly escalating. They're throwing everything that they have against Ukraine, and they are effectively building up their industrial war base to destroy the Ukrainian regime. They want to take more land. They want Zelensky out, probably preferably dead. And the Ukrainians know it, and so they're hitting Russia back hard, and it's affecting Russia's economy. It's affecting Russia's citizens, even wealthy elites in Moscow and Petersburg. The fact that President Trump has thrown in his lot increasingly with Putin in the last days, first of all, shows Trump's frustration that things are going badly for him at home, but also shows that Trump really does not care about rule of law, about human rights. Is utterly indifferent. He said at the UN, he said, 'To the victor goes the spoils.' He was talking about Venezuela specifically, but he believes that with Iran, with Russia, Ukraine, basically if you're stronger, you get to write the rules. And that's why he talks about the Chinese and America as a G2, because from his perspective, China is the only other country out there that has kind of global status and power. And it doesn't matter that they're a repressive authoritarian regime. They're the most powerful, so that's just who you deal with. And you know, the fact that Trump has been telling the Ukrainians, 'You've got to stop hitting Russian refineries.' He said nothing to the Russians about needing to stop killing Ukrainian civilians. And frankly, I think if the Ukrainians were to stop hitting Russian refineries and instead start killing Russian civilians, Trump would be happier with that, because he doesn't value the lives of these people. He just wants the price of diesel to come down. And you know, most of the reason diesel's gone up is because of his own failed war in Iran, but some of it is because the Ukrainians are actually trying to defend themselves against the Russians, that they're just hitting out however they can, and they still are actually trying not to engage in war crimes. You know, that's unacceptable to Trump. And it is kind of staggering, right? I mean, that the US president who, you know, in principle, you know, at least many Americans have believed that the US had been the leader of the free world, that America had been the exporter of democracy—not consistently and frequently hypocritically, and certainly not effectively all the time—but nonetheless there was that aspiration. You can't look at what Trump is doing and saying on Russia-Ukraine today and think that that bears any relationship with reality. And so as much as we have all of this, you know, overhang of integrated military relationships and economic relationships and diplomatic relationships and institutional memory, the reality is that as of today, the behavior of the American president is much more consistent on the global stage with things you would expect to see from an authoritarian leader indifferent to rule of law than what you would have historically seen from the United States. And that's one of the reasons it feels so traumatic for the Canadians.
And probably everybody else. I mean, the latest notion that—
Not the Ukrainians, not the Europeans, not—
Certainly not Latin America, who are much more concerned about security and have been voting in that direction and were very supportive of what Trump did in Venezuela, for example, right? Not so the Asian allies, because as much as they don't like what they're seeing from the US, they're much more concerned about China's capabilities, and so they will find ways to get along with the US no matter what. So that's my point: is that yes, you can talk about variable geometry, but recognize that the antecedent reasons for rupture for the G-Zero are very different for different countries. And so yes, the Ukrainians are feeling this right now principally because the Russians are attacking them. But yes, also, look, I was with Zelensky and members of his cabinet just a couple of weeks ago in Kyiv when I was invited by your prime minister to spend a day with the cabinet. And at that point, the Ukrainian perspective was, 'Hey, we're good with the Americans.' And they weren't good with the Americans, but they were good with the Americans compared to their existential issue, which was Russia attacking them. So they tried to do everything possible to say, 'Yes, yes, yes, we've got great relations, and we really appreciate the intelligence, and we really appreciate the weapons, and all that.' And then just in the past few hours, I've seen President Zelensky say that there was an attack from Russia into Ukraine and that the Ukrainians did not get a heads-up from the US in advance, implying that the intelligence had been suspended, even though his own foreign minister said that intelligence had not been suspended. So that is a level of frustration that comes from Zelensky feeling the pressure from Trump having essentially flipped on him once again in a way that he hadn't really seen since a year ago April, when he was thrown out of the White House and suddenly his intelligence and defense support was suspended by Trump.
And this, of course, administration to buy diesel from Russia, thereby arguably fueling the war. Ian, if—
