The North American [Trade?] War
This is a conflict over imperial sovereignty, in which Canada is mediaeval Scotland. Trudeau and Sheinbaum are delusional to think that the corpse of the post World War II will save them.
US President Donald Trump announced 25% tariffs on all Canadian and Mexican goods, with a lower tariff for Canadian oil of 10%, on 1 February. In retaliation, Canada announced its own tariffs of 25% on USD30 billion of American goods, starting on 4 February, with another batch on $155 billion worth of goods, coming in after 21 days. Mexico did not announce specific retaliatory measures as at the time of this writing, but promised to do so. The Mexican and Canadian leaders held a phone conversation to coordinate their responses.
Grievances
Trump’s grievances are that Mexico and Canada are being used by China to smuggle fentanyl, establish businesses that evade tariffs, relabel Chinese products as Canadian or Mexican, and gain access to American markets. Furthermore, both countries refuse to police their borders with the US properly. The situation with Canada is worse in some respects, given Canada’s access to the Five Eyes intelligence community. With Mexico, the main risk is the cartels, which are now more similar to insurgents than to organised crime groups.
With Trump accusing the Mexican government of being allied with the cartels (which is accurate, and is a point about which we have briefed clients), he is in essence saying that there is a proxy war being fought in Mexico and America, where Mexico is siding with China. Another way of looking at this is through the prism of the Cuban Missile Crisis, or the Russian invasion of Ukraine. In both cases, a country that is too close to an imperial core was seen as befriending a hostile empire, resulting in catastrophic consequences for the country in question.
Historical Context
Canada’s situation is analogous to that of mediaeval Scotland. Like Scotland, which regularly sided with France against England, Canada has been siding with China against the United States, especially under Prime Minister Justin Trudeau.
Like Scotland, Canada must be brought to heel for the US to be able to confront its imperial rivals, China, Russia, and, in the future, Turkey and perhaps even Mexico.
Once that point is understood, it becomes evident that this is NOT a trade dispute. This is an imperial conflict over who is sovereign in North America, intended to discipline what are perceived as imperial dependencies and provinces. Once the trade conflict starts, and the dust settles from Trump’s revolutionary changes to American governance, all the tools that are used in warfare will become available to American policymakers.
By imposing retaliatory tariffs, Trudeau and Sheinbaum are acting under the delusion that the post World War II order is alive, when it is in fact dead. They are appealing to sovereignty and international law, when their countries are seen by America as no more than uppity, ungrateful, imperial vassals. They are modern day Melians.
With Canada under Trudeau casting itself as a post-national state, and having most of its children born to foreigners, its ability to resist is far weaker than Mexico’s. If Canada is like historic Scotland, destined to be absorbed by the growing empire on its southern border, then Mexico is closer France - there will be a long and bitter struggle, the Americans will have many victories and some defeats, but they will never decisively win.
Escalation pathways
We have argued in the past that the future is racist - that is, states will operate first and foremost with due concern for the interests of their own blood, not those of migrants, or those from different ethnic and religious backgrounds. This is not a statement about morality, but about human nature. The short-lived colour blindness was always going to be a historical exception. It has now died with DEI.
Canada
From that perspective, America will treat Canada far more kindly than it will Mexico. The US will likely reach out to local premiers in Canadian provinces that are highly dependent on America, such as Alberta, with an offer to relieve them of tariffs in exchange for recognition as US states. Those that accept will get American bases, and will force a political crisis in Ottawa that overwhelms the government. America may even offer Quebec a new independence referendum.
America will also have other economic levers available to it. These include refusing to bail out the Bank of Canada in a future financial crisis - triggering far worse inflation. There are many ways in which America can wage economic war against Canada, and Canada is not able to resist or adequately retaliate. Canada sells oil to the US because it refuses to build additional infrastructure to export oil. And if Canada were to, for example, build infrastructure with Chinese capital to support the Chinese economy, this would escalate the conflict into the military sphere. Canada is stuck.
America’s may aim to break up Canada into pieces and absorb it slowly. In an extreme scenario, the US may launch a quick military operation to surround key Canadian cities and impose its terms, or to seize critical energy infrastructure. The Canadian military is far too weak to challenge this. Canadian politicians, however, appear divorced from reality.