1 00:00:02,400 --> 00:00:09,480 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. I'm Stephen Carol and 2 00:00:09,600 --> 00:00:11,960 Speaker 1: this is Here's Why, where we take one new story 3 00:00:12,000 --> 00:00:14,000 Speaker 1: and explain it in just a few minutes with our 4 00:00:14,040 --> 00:00:15,640 Speaker 1: experts here at Bloomberg. 5 00:00:20,000 --> 00:00:22,479 Speaker 2: What I'd like to see Canada become our fifty first 6 00:00:22,560 --> 00:00:25,000 Speaker 2: day when you get rid of that artificially drawn line. 7 00:00:25,040 --> 00:00:27,600 Speaker 2: Somebody drew that line many years ago with like a ruler, 8 00:00:27,720 --> 00:00:30,479 Speaker 2: just a straight line right across at top of the country. 9 00:00:30,560 --> 00:00:32,640 Speaker 2: And to be honest with you, Canada only works as 10 00:00:32,680 --> 00:00:35,199 Speaker 2: a state. It doesn't We don't need anything they have. 11 00:00:35,560 --> 00:00:38,400 Speaker 2: One of the nastiest countries to deal with is Canada. 12 00:00:38,560 --> 00:00:40,640 Speaker 2: We have a right not to help them with their 13 00:00:40,720 --> 00:00:44,080 Speaker 2: financial difficulties. Canada is very tough. They're very, very tough 14 00:00:44,120 --> 00:00:46,919 Speaker 2: to do business with, and we can't let them take 15 00:00:46,920 --> 00:00:49,919 Speaker 2: advantage of the US. Canada gets a lot of freeviews 16 00:00:49,960 --> 00:00:52,200 Speaker 2: from US, by the way, they should be grateful also, 17 00:00:52,240 --> 00:00:55,200 Speaker 2: but they're not. Canada lives because of the United States. 18 00:00:55,280 --> 00:00:58,920 Speaker 1: Remember that, of all the places the US president has 19 00:00:59,000 --> 00:01:02,160 Speaker 1: lashed out US, he reserved some of his strongest language 20 00:01:02,280 --> 00:01:05,720 Speaker 1: for Canada. For months, Donald Trump has been lobbing tariff 21 00:01:05,720 --> 00:01:08,679 Speaker 1: threats and insults at the country and its Prime Minister, 22 00:01:08,760 --> 00:01:12,520 Speaker 1: Mark Carney. The offensive from its nearest neighbor has pushed Canada, 23 00:01:12,640 --> 00:01:17,360 Speaker 1: under Carney's leadership, to rethink its approach to trade and diplomacy. 24 00:01:17,680 --> 00:01:21,000 Speaker 3: Now, Canada can't solve all the world's problems, but we 25 00:01:21,120 --> 00:01:23,960 Speaker 3: can show that another way is possible, that the arc 26 00:01:24,040 --> 00:01:29,199 Speaker 3: of history isn't destined to be warped towards authoritarianism and exclusion. 27 00:01:29,640 --> 00:01:32,920 Speaker 3: It can still bend towards progress and justice. 28 00:01:33,000 --> 00:01:36,839 Speaker 1: Here's why Canada is pushing an alternative to Trump's world. 29 00:01:39,560 --> 00:01:42,400 Speaker 1: The host of Bloomberg's Big Take podcast, David Gora, joins 30 00:01:42,440 --> 00:01:44,760 Speaker 1: US Now for more. David, good to talk to you. 31 00:01:45,200 --> 00:01:47,920 Speaker 1: First of all, can you put in context for us 32 00:01:48,040 --> 00:01:51,480 Speaker 1: how much the relationship between the US and Canada has 33 00:01:51,600 --> 00:01:52,880 Speaker 1: changed under Donald Trump. 34 00:01:53,040 --> 00:01:56,280 Speaker 4: It's rannically different. And you visit with people along that 35 00:01:56,360 --> 00:01:58,320 Speaker 4: northern border of the US used to have kind of 36 00:01:58,360 --> 00:02:02,280 Speaker 4: easy transit and friendships across the border, and those relationships 37 00:02:02,320 --> 00:02:06,040 Speaker 4: have changed dramatically in the last few months. Eurasia Group, 38 00:02:06,080 --> 00:02:09,200 Speaker 4: the kind of global political risk consultancy, noted that there's 39 00:02:09,240 --> 00:02:12,480 Speaker 4: been this long standing relationship between the US and Canada 40 00:02:12,480 --> 00:02:17,880 Speaker 4: built on economic integration, security, partnership. They've declared that over 41 00:02:18,200 --> 00:02:20,040 Speaker 4: and I think in the early months of President Trump's 42 00:02:20,040 --> 00:02:23,520 Speaker 4: second term there was this feeling that the breakdown in 43 00:02:23,560 --> 00:02:27,320 Speaker 4: this relationship was perhaps irreparable. But since then, the President 44 00:02:27,320 --> 00:02:29,880 Speaker 4: has not back down. The rhetoric has continued. He's recently 45 00:02:29,880 --> 00:02:32,480 Speaker 4: threatened to block the opening of this bridge that goes 46 00:02:32,480 --> 00:02:35,960 Speaker 4: from Detroit to Windsor, Ontario, named for Gordy how the 47 00:02:36,160 --> 00:02:38,840 Speaker 4: Canadian hockey player who played for the Detroit Red Wings. 48 00:02:39,280 --> 00:02:41,239 Speaker 4: And Canadians who have been outraged by President Trump's trade 49 00:02:41,240 --> 00:02:44,080 Speaker 4: policies and the rhetoric that he's used have been watching 50 00:02:44,120 --> 00:02:48,120 Speaker 4: as the US captured Nicholas Maduro. They've heard the President's 51 00:02:48,160 --> 00:02:51,840 Speaker 4: comments on Greenland and maybe most significant, Stephen. They've kind 52 00:02:51,840 --> 00:02:53,760 Speaker 4: of seen the contours of what's come to be called 53 00:02:53,800 --> 00:02:57,000 Speaker 4: the Donroe doctrine, the President's designs on having more influence 54 00:02:57,000 --> 00:03:00,480 Speaker 4: in the Western hemisphere coming too starker relief. The realism 55 00:03:00,560 --> 00:03:02,960 Speaker 4: of all of that has really colored this relationship dramatically. 56 00:03:03,600 --> 00:03:07,000 Speaker 1: So how has Mark Karney as Prime Minister responded to. 57 00:03:06,960 --> 00:03:11,480 Speaker 4: This forcefully and seriously. I remember hearing Mark Carney when 58 00:03:11,480 --> 00:03:13,639 Speaker 4: he was on the campaign trail say over and over 59 00:03:13,680 --> 00:03:16,120 Speaker 4: again that when he would hear President Trump talk about 60 00:03:16,120 --> 00:03:18,200 Speaker 4: Canada becoming the fifty first state in the United States 61 00:03:18,240 --> 00:03:20,280 Speaker 4: of America, he didn't interpret that as a joke. He 62 00:03:20,600 --> 00:03:24,240 Speaker 4: wasn't taking that as the president making a job. He 63 00:03:24,280 --> 00:03:27,680 Speaker 4: treated it very seriously. I remember Mark Karney telling our 64 00:03:27,680 --> 00:03:30,400 Speaker 4: colleague Mitchell Husain that he didn't become the Prime minister 65 00:03:30,480 --> 00:03:32,840 Speaker 4: because of President Trump. But I think that his election 66 00:03:33,080 --> 00:03:36,040 Speaker 4: and that rhetoric and those threats really did a lot 67 00:03:36,120 --> 00:03:39,600 Speaker 4: to propel him to the premiership. Those threats on Canadian 68 00:03:39,640 --> 00:03:41,680 Speaker 4: soemntin in particular, I think really resonated with a lot 69 00:03:41,840 --> 00:03:44,800 Speaker 4: of Canadians. It has also shaped a lot of policy 70 00:03:44,880 --> 00:03:48,440 Speaker 4: during Mark Carney's tenure as Prime Minister thus far, domestic policy, 71 00:03:48,480 --> 00:03:52,040 Speaker 4: foreign policy as well. And in recent weeks we've seen 72 00:03:52,160 --> 00:03:54,400 Speaker 4: the Prime Minister take a number of trips. I think 73 00:03:54,440 --> 00:03:56,440 Speaker 4: he's been in office less than a year, but he's 74 00:03:56,440 --> 00:03:58,960 Speaker 4: been on the road almost two months of that. He 75 00:03:59,040 --> 00:04:00,960 Speaker 4: was in China where he broke heer to a new 76 00:04:01,000 --> 00:04:03,320 Speaker 4: strategic partnership with that country. He was in cutter after 77 00:04:03,320 --> 00:04:05,520 Speaker 4: that they committed to a new deal those two nations. 78 00:04:06,160 --> 00:04:08,080 Speaker 4: The first time a Prime minister from Canada has been 79 00:04:08,280 --> 00:04:11,760 Speaker 4: to Cutter. What Mark Carney has said is that Canada 80 00:04:11,840 --> 00:04:13,800 Speaker 4: is engaging broadly, going on a lot of these trips, 81 00:04:13,800 --> 00:04:16,600 Speaker 4: looking at its relationships anew and it's no longer waiting 82 00:04:16,640 --> 00:04:19,640 Speaker 4: for the world that it wants to be. It's taking 83 00:04:19,680 --> 00:04:21,400 Speaker 4: a very realistic take on on certain the way the 84 00:04:21,440 --> 00:04:22,000 Speaker 4: world is today. 85 00:04:22,600 --> 00:04:25,640 Speaker 1: And is this a uniquely Canadian approach or is it 86 00:04:25,680 --> 00:04:28,440 Speaker 1: a model that other countries who find themselves and Donald 87 00:04:28,440 --> 00:04:31,000 Speaker 1: Trump's crosshairs could follow as well. 88 00:04:31,080 --> 00:04:33,840 Speaker 4: I think that's still unclear. That the Prime Minister has 89 00:04:33,880 --> 00:04:37,080 Speaker 4: fashioned himself as kind of a spokesman for what he 90 00:04:37,120 --> 00:04:39,640 Speaker 4: sees as a model as you describe it. But there 91 00:04:39,720 --> 00:04:42,920 Speaker 4: is some uniqueness, I think to Canada's circumstances. Certainly geographically 92 00:04:43,279 --> 00:04:45,560 Speaker 4: it's right there next to the United States of America. 93 00:04:45,600 --> 00:04:48,720 Speaker 4: It's proximity is important here. And I also think that 94 00:04:48,600 --> 00:04:51,080 Speaker 4: the Prime Minister's background is unique as well. He is 95 00:04:51,080 --> 00:04:53,400 Speaker 4: somebody who quite expertly, I think, over the last year, 96 00:04:53,680 --> 00:04:56,359 Speaker 4: has been able to draw from the experience that he 97 00:04:56,440 --> 00:05:01,040 Speaker 4: has working with big multilateral institutions, working as a traditional 98 00:05:01,040 --> 00:05:02,960 Speaker 4: policymaker with the Bank of Inland, the Bank of Canada, 99 00:05:03,720 --> 00:05:06,560 Speaker 4: take that and sort of apply that to this new world. 100 00:05:06,600 --> 00:05:08,720 Speaker 4: So as he talks about the need for Canada to 101 00:05:08,760 --> 00:05:10,560 Speaker 4: improve itself and change the way that it looks at 102 00:05:10,560 --> 00:05:13,279 Speaker 4: the world, he has an intimate understanding of the way 103 00:05:13,320 --> 00:05:14,880 Speaker 4: that nations have operated historically. 104 00:05:15,680 --> 00:05:18,440 Speaker 1: So in Davos, Mark Carney made a pitch for this 105 00:05:18,600 --> 00:05:21,520 Speaker 1: so called middle powers of the world to band together 106 00:05:21,640 --> 00:05:26,200 Speaker 1: to save the liberal order, multilateral institutions and free trade. 107 00:05:26,680 --> 00:05:29,640 Speaker 1: That's a pretty massive set of ambitions, is it realistic? 108 00:05:30,320 --> 00:05:33,280 Speaker 4: This is a speech that continues to reverberate around the world. 109 00:05:33,320 --> 00:05:35,760 Speaker 4: I think it'll continue to do so. And what the 110 00:05:35,800 --> 00:05:38,880 Speaker 4: Prime Minister did in those remarks is he encouraged everyone 111 00:05:38,920 --> 00:05:40,680 Speaker 4: in the world to wake up to the way that 112 00:05:40,720 --> 00:05:42,960 Speaker 4: it's changed and is changing. He used a lot of 113 00:05:43,000 --> 00:05:45,640 Speaker 4: real talk. He talked about a rupture in the world order. 114 00:05:46,400 --> 00:05:50,320 Speaker 4: He also interestingly gave license to other middle powers like 115 00:05:50,400 --> 00:05:54,279 Speaker 4: Canada to be proud or feel proud or feel like 116 00:05:54,320 --> 00:05:57,599 Speaker 4: they have agency in this new world, to recognize that 117 00:05:57,800 --> 00:05:59,920 Speaker 4: both independently and together. And we talk about middle power, 118 00:06:00,080 --> 00:06:03,720 Speaker 4: we're talking about countries like Brazil and India and Saudi Arabia, Australia, 119 00:06:03,760 --> 00:06:07,440 Speaker 4: South Africa. I mentioned how Prime Minister Karney has visited 120 00:06:07,520 --> 00:06:12,000 Speaker 4: China and Cutter. He's advocating for this new asymmetrical geometry, 121 00:06:12,040 --> 00:06:13,800 Speaker 4: as he calls it. I've also seen that referred to 122 00:06:13,880 --> 00:06:16,359 Speaker 4: as kind of fluid coalitions, and I think we'll have 123 00:06:16,400 --> 00:06:19,680 Speaker 4: to see if what the Prime Minister has proposed that 124 00:06:19,720 --> 00:06:22,919 Speaker 4: being these middle powers working with other middle powers is 125 00:06:22,960 --> 00:06:25,200 Speaker 4: going to lead to something new, kind of new relationships 126 00:06:25,200 --> 00:06:26,640 Speaker 4: among them. We're going to see them kind of building 127 00:06:26,640 --> 00:06:28,280 Speaker 4: on what they've done before. There have been a number 128 00:06:28,279 --> 00:06:31,000 Speaker 4: of economists and policy makers who have cautioned that maybe 129 00:06:31,000 --> 00:06:32,720 Speaker 4: there's a limit to how much power they could have 130 00:06:32,760 --> 00:06:35,159 Speaker 4: absent the kind of traditional multilateral institutions they've been a 131 00:06:35,160 --> 00:06:38,280 Speaker 4: part of in the past. I think that it is realistic, 132 00:06:38,360 --> 00:06:39,640 Speaker 4: but it is going to be difficult. 133 00:06:40,200 --> 00:06:43,600 Speaker 1: So Canada at the same time is preparing to renegotiate 134 00:06:43,720 --> 00:06:47,360 Speaker 1: its trade treaty with the United States. We're hearing rumblings 135 00:06:47,360 --> 00:06:50,679 Speaker 1: from the White House on this. Could the bolds dance 136 00:06:50,760 --> 00:06:54,080 Speaker 1: that Mark Carney has taken backfire, so this. 137 00:06:54,040 --> 00:06:57,240 Speaker 4: Is a huge concern. Stephen the US Trade Representative Jamison 138 00:06:57,240 --> 00:06:59,200 Speaker 4: Greer has said that some of Mark Karney's comments have 139 00:06:59,320 --> 00:07:04,120 Speaker 4: made renegotiating this deal more challenging, and Bloomberg has reported 140 00:07:04,160 --> 00:07:07,960 Speaker 4: that President Trump is privately musing about exiting the USMCA. 141 00:07:08,040 --> 00:07:10,040 Speaker 4: It has to be renegotiated by July the first of 142 00:07:10,080 --> 00:07:13,200 Speaker 4: this year, what the US has said officially, so it's 143 00:07:13,200 --> 00:07:18,440 Speaker 4: going to negotiate terms bilaterally with Mexico and Canada independently. 144 00:07:18,960 --> 00:07:20,520 Speaker 4: We'll see what happens here. But I just want to 145 00:07:20,760 --> 00:07:23,640 Speaker 4: remind everyone that this deal, it's an agreement that Donald 146 00:07:23,680 --> 00:07:26,400 Speaker 4: Trump was Party two. He signed this during his first term. 147 00:07:26,480 --> 00:07:29,760 Speaker 4: So bottom line is Canada. Once this deal extended, so 148 00:07:29,880 --> 00:07:32,800 Speaker 4: does Mexico. And I should say, by the USMCA being 149 00:07:32,800 --> 00:07:36,000 Speaker 4: an effect, Canada has kind of insulated itself from some 150 00:07:36,080 --> 00:07:37,840 Speaker 4: of the more punitive tariffs that the president may have 151 00:07:37,880 --> 00:07:38,720 Speaker 4: wanted to put in place. 152 00:07:39,120 --> 00:07:41,880 Speaker 1: What about the politics behind all of this in Canada 153 00:07:41,920 --> 00:07:44,720 Speaker 1: as well? I mean, people are usually pretty pleased when 154 00:07:44,720 --> 00:07:47,680 Speaker 1: they get to describe it a love actually moment of 155 00:07:47,720 --> 00:07:50,760 Speaker 1: a world leader standing up for their own country, particularly 156 00:07:50,800 --> 00:07:54,920 Speaker 1: in the face of a superpower. Are Canadians, though, thinking 157 00:07:54,960 --> 00:07:58,480 Speaker 1: realistically about what this could cost if their relationship goes sour? 158 00:07:59,000 --> 00:08:01,240 Speaker 4: I love your description of that, and you saw Mark 159 00:08:01,280 --> 00:08:04,240 Speaker 4: Carney return from Davos to if not a hero is 160 00:08:04,280 --> 00:08:07,360 Speaker 4: welcome at least a substantial bump in the public opinion 161 00:08:07,360 --> 00:08:10,120 Speaker 4: polling in Canada. His approval is the highest it's been 162 00:08:10,200 --> 00:08:12,480 Speaker 4: I think since he's been been Prime Minister. But I 163 00:08:12,480 --> 00:08:14,000 Speaker 4: think that he's aware of the fact that he doesn't 164 00:08:14,000 --> 00:08:16,600 Speaker 4: have unlimited time here. Cost of living is still a 165 00:08:16,680 --> 00:08:20,000 Speaker 4: huge issue in Canada. Food inflation remains very high, the 166 00:08:20,040 --> 00:08:22,200 Speaker 4: cost and availability of housing is still a huge issue 167 00:08:22,240 --> 00:08:25,160 Speaker 4: he has to deal with. And as the Prime Minister 168 00:08:25,560 --> 00:08:27,520 Speaker 4: really speaks to the world about the way in which 169 00:08:27,520 --> 00:08:30,760 Speaker 4: it's changed, he certainly focused and has to focus on 170 00:08:31,360 --> 00:08:35,400 Speaker 4: domestic economic circumstance in Canada itself. So there is that 171 00:08:35,480 --> 00:08:37,320 Speaker 4: which is going to be a huge challenge for him 172 00:08:37,440 --> 00:08:40,280 Speaker 4: in the months ahead. And then also just this prospect 173 00:08:40,320 --> 00:08:44,320 Speaker 4: of disentangling Canada and Canada's economy from the US as 174 00:08:44,320 --> 00:08:46,559 Speaker 4: he tries to forge these new relationships with other nations. 175 00:08:46,559 --> 00:08:48,720 Speaker 4: This is not going to be something that's easy. 176 00:08:48,720 --> 00:08:52,719 Speaker 1: Stephen Okay, David Gora, host of Bloomberg's Big Take podcast. 177 00:08:52,920 --> 00:08:55,680 Speaker 1: Thank you for more explanations like this from our team 178 00:08:55,679 --> 00:08:58,360 Speaker 1: of three thousand journalists and analysts around the world, go 179 00:08:58,360 --> 00:09:03,320 Speaker 1: to bloomberg dot com slash explainers. I'm Stephen Carol. This 180 00:09:03,440 --> 00:09:05,560 Speaker 1: is here's why I'll be back next week with more 181 00:09:05,800 --> 00:09:06,560 Speaker 1: thanks for listening.