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Trump is Being Confronted by his Worst Nightmare
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These are not the Canadian trade negotiators
Canadian Prime Minister Mark Carney is Donald Trump’s worst nightmare: a banker with political power.
Let’s start with the banker part of this nightmare. For thirteen years, Carney worked on international finance at Goldman Sachs; for five years, he headed the Bank of Canada as they responded to the 2008 financial crisis; and for eight years he was in charge of the Bank of England as the UK debated, approved, and negotiated the terms of Brexit. And in all that time, Carney developed and honed his analytical skills.
Bankers are big on two things above all: hard data and binding commitments. If you want a loan from a banker, you can pull out all your glossy PR pieces around with all their gauzy pictures of how wonderful the future will be if you get this loan, but until you show the banker hard numbers, you aren’t going to get that loan. Similarly, bankers want to see how you have handled your binding commitments in the past. Have you paid previous loans according to the terms of the agreements? Have you lived up to your past promises, or have you tried to wiggle out of them through imaginary loopholes or simply walking away from them?
You can see why bankers are Trump’s biggest nightmare. As a private businessman, Trump’s failure to show hard data that would back up his glossy PR and his objective record of not living up to the terms of the agreements he signed led to bank after bank showing him the door. “No, we’re done. If you want a loan, go find some other sucker to give it to you.” It wasn’t envy or personal animus, but basic banking logic. Trump had proven to be a double failure through his dependency on fuzzy numbers and his overall untrustworthy in living up to his contracts.
As bad as that is for Trump, it is the addition of Carney’s political power that makes Trump really sweat. Where Trump blusters and threatens, Carney has a way of being able to work with others by leaning on that insistence on hard data and binding commitments. He and his Liberal allies are miles (or kilometers) apart from Ontario’s Premier Doug Ford and other Conservative leaders on a lot of policy issues, but they both know that if they can justify their positions with solid numbers and can come to an agreement with each other, they will live up to whatever was decided together.
In Carney’s late Friday announcement describing the downfall of negotiations, one piece has gotten precious little attention from the media. There’s been a lot of talk about various items that became dealbreakers, especially as Carney laid them out in his Saturday speech, but not much notice of his earlier point when he told his negotiators to come home. From the CBC:
Carney said Canada went into the trade talks fully aware the U.S. had changed its spots and had embarked on a mission to reshape its trading relationships to one where it used previous “economic integration as a weapon.”
He noted that the Trump administration has justified tariffs on Canada with a continually changing rationale that began with fentanyl and since moved to wildfire smoke, dairy quotas, the certification of U.S. aircraft and Ontario Premier Doug Ford’s anti-tariff ads that quoted former U.S. president Ronald Reagan, all of which violate the Canada-U.S.-Mexico Agreement.
Through the Trump administration’s actions, Carney said, Canada has come to realize “that sometimes, its signature was written in pencil.”
This is not hyperbole, but a cold assessment of hard data on past commitments. Leaving aside the bankruptcies and broken contracts that litter Trump’s private business track record and looking solely at his actions as the US president, that cold assessment does not look good. Trump unilaterally tore up NAFTA in his first term, only to realize that the US still needed it, so Trump tweaked it a little and rebranded it USMCA. In his second term, Trump tore up USMCA, wondering what kind of idiot negotiated such a bad agreement. (Yes, self-awareness is not one of Trump’s strengths. Why do you ask?) Then there’s Trump’s backing away from NATO’s firm Article Five commitment to mutual aid of all its members, unilaterally tying the US commitment to Trump’s perception of whether the nation attacked has “paid up”. Trump made the unconditional terms of the NATA treaty conditional. Again and again, Trump record is to break agreements.
Bankers don’t like that kind of screwing around with contracts. International diplomats and politicians don’t like that abdication of national commitments, either. So Trump shouldn’t be surprised that Carney — a banker with national and international political clout — will not look kindly on Trump’s dealmaking.
The NYT has a longish story outlining their research into the breakdown in trade talks between the US and Canada [gift link], and a couple of things stand out. First, while the Canadian team was relatively united (including consultations between Carney and the provincial leaders), the Trump team was bifurcated between US Trade Representative Jamieson Greer and Secretary of Commerce, Howard Lutnick. Greer’s portfolio did not cover all aspects of US/Canadian trade, and required Lutnick’s participation in the negotiations.
This did not go well.
Last Monday afternoon, with the talks still underway, Jamieson Greer, the U.S. trade representative, and Dominic LeBlanc, the Canadian trade minister, dodged reporters waiting in the Washington humidity as they left a roughly two-hour meeting at the Commerce Department.
Canadian negotiators were used to working closely with Mr. Greer, who oversees U.S. trade deals and helped negotiate the United States-Mexico-Canada Agreement during Mr. Trump’s first term. But many of the issues that Canadians cared about most were instead the purview of the man who stayed inside in the air conditioning: Howard Lutnick, the secretary of commerce.
Mr. Lutnick, a hard-charging former bond broker who has known Mr. Trump for decades, oversees the administration’s tariffs on cars, trucks, steel and aluminum. And in the coming days, he would take a hard line on those topics, issues that ultimately took down the talks.
Second, this division stood in harsh contrast to the Canadian side of things. It’s not that the Canadians didn’t have internal disagreements – Carney, the Liberal PM, and the Conservatives leaders across the country had different negotiating priorities, but these were nowhere near as divisive as those between Lutnick and Greer. What Greer and the Canadian negotiators had worked toward, Lutnick blew up.
But what finally tanked the talks, and what will make things difficult for Trump going forward, is that Carney has the backing of ordinary Canadians of all political stripes. For example, look at the shift in Canadian vacation and travel spending:
For decades, heading south meant one thing for most Canadians: the United States. That has changed dramatically over the past year and a half. Frustrated by tariffs, “51st state” rhetoric, and a political climate that feels increasingly hostile, Canadian travelers have redirected billions of dollars away from American hotels, theme parks, and shopping malls toward destinations that feel warmer in more ways than one.
This isn’t a quiet, temporary dip either. It’s one of the most sustained and statistically documented travel boycotts in recent memory, and the money hasn’t disappeared, it’s simply gone somewhere else. From the Caribbean to the Canadian Rockies, entire tourism economies are now feeling the ripple effects of a shift that started as political protest and turned into a genuine reshaping of how Canadians vacation.
This kind of broad backing from the Canadian people is what made it possible for Carney to order his negotiators home. My Canadian friends tell me that if Trump could somehow get a trade agreement that got Canadian liquor stores to put Kentucky bourbon back on their shelves, those bottles would sit there gathering dust.
Will there be economic hardship for the Canadians? Absolutely. But here’s the thing: Canadians take their national anthem seriously.
Last winter, I was watching an hockey game and chills went up my spine as I watched the pre-game ceremonies. This wasn’t a match between the US and Canada national teams, nor an NHL playoff match. It was an ordinary match played in Canada between one of the NHL’s Canadian teams and a team from the US. It was being played when Trump’s bluster attacking Canada was very much in the news, with Trump’s repeated remarks that Canada should be the 51st state, references to “governor Carney,” and escalating on-and-off-again tariff threats.
Before matches like this with teams from two countries, both national anthems are sung. That night at that hockey game, the singer was a local television personality, and when she sang the US anthem, it was obvious she had a very nice voice as well. Her solo voice was greeted not with boos, but with a respectful silence for the anthem of the visiting team. After it was over, and she prepared to sing “O Canada,” the whole feel of the room shifted.
Canadians love singing their anthem at games like this, but that night they were in full voice. The singer was amplified, but the crowd’s combined voices were just as strong, and grew stronger as the song moved along. The singer could feel this, and so as the anthem approached its end, she pulled the microphone away from her lips and became a conductor of sorts for the crowd as the last lines burst from every throat:
God keep our land glorious and free!
O Canada, we stand on guard for thee.
O Canada, we stand on guard for thee.That’s when the difference between the two anthems became stunningly obvious to me. Musically speaking, the US anthem tells the story of outnumbered and outgunned Americans being inspired by the flag that continues to wave despite all the enemy’s bombs and rockets. The Canadian anthem, on the other hand, is a promise made by the Canadian people to their nation. Yes, the US anthem can be inspiring, but the Canadian national anthem is a commitment between the singers and their country. *We* stand on guard for our nation, says the song, say the singers. (I searched long and hard to find video of that evening, but came up empty – sorry!)
And this wasn’t just one exuberant song sung one night a couple of month ago, as recent numbers back this up:
Three-in-four Canadians are endorsing the Carney government’s decision to walk away from trade negotiations with the United States late Friday night, confirming that long-expressed national resolve and desire to see Canadian negotiators take a “hard line” with Washington was more than theoretical.
Yes, folks in BC in the west have different priorities than the Quebecois in the east. Yes, the folks in the oil fields have different priorities than the timber workers and the auto workers. But they sing the same anthem and share the same commitment to standing guard for their country. Yes, the various politicians are pressing Carney’s government for more information and proposing different approaches going forward. But they *all* take that anthem seriously, especially the promise at the end.
Trump has seriously misjudged Carney, perceiving his quiet, bankerly negotiating style for weakness. He’s learning — too late — that Carney is not Doug and Bob McKenzie in a suit. What Trump is learning is that this banker/politician is his worst nightmare, because Carney and other other political leaders of all stripes in Canada know they have the backing of overwhelming numbers of ordinary Canadians. Trump can only wish for support like that, and his living nightmare is that he knows he doesn’t have it.
The post Trump is Being Confronted by his Worst Nightmare appeared first on emptywheel.