The Broken Transmission Belt of Policy: Tariffs Edition

Since Trump returned to power, I have been talking a lot about the broken transmission belt of policy.*  In ordinary times, if a person, firm, or association had a problem, they could complain to their Congressperson or Senator, and that person would put heat on the President to reverse the policy or stop it before the policy took effect.  That is the transmission belt of policy--taking the preferences and concerns of individual and collective interests and connecting them to the actors making the big decisions.

Since Trump came back, that belt has been broken. Very little of what Trump does is popular, much of it is annoying or worse to many voters, firms, and sectors.  But Republican Congresspeople and Senators have largely been unresponsive--they have not pushed for legislative changes and they have not pressured Trump that much.

Why?  Because they range from cowards to co-conspirators.  Mostly, the former.  Trump has two things going for him that help cement his control over the party: a) he is quite willing to throw any member of his party under the proverbial bus and his followers go along with it with Musk's money as a big hammer; and b) MAGA violence is a real threat to Republicans who stray.  My fave example is Joni Ernst, who initially opposed Pete Hegseth's nomination for SecDef since he stood against what she stood for--women serving in combat and fighting sexual assault against women who serve. She folded quickly.

I return to this topic today because the trade war for Canada is terrible for many American companies and sectors.  For instance, Canada is the most important provider of potash to American farmers--85%.  The trade war will have several impacts on Americans and American firms:

• the price of various goods will go up as taxing Canadian imports, yes, increases the prices Americans pay for Canadian goods.  
• the price of various goods will go up as taxing Canadian imports, yes, increases the prices of Canadian goods so American companies that compete with Canadian imports will raise their prices as they face less competition.
• American firms will become less competitive as key inputs for their products will get more expensive--American cars, agriculture, etc. all rely on Canadian inputs.
• American firms that export to Canada will lose business as taxes on their goods--tariffs placed by Canada in relatiation--get more expensive.

In ordinary times, these kinds of folks are important political actors, offsetting those firms who benefit from a protected market--this is the stuff Helen Milner wrote so persuasively long ago. Globalization of production made it less politically attractive to be protectionist.  What has happened?  Trump doesn't care, as he has largely been immune from the impacts of his policies.  Well, his popularity isn't immune, but the GOP whine rather than legislate.  Party discipline, caused by fear and greed, has broken the transmission belt.  I still wonder about the tech firms who seem so important and rely so heavily on foreign markets, but I guess the combo of being too big to regulate or fail and being run by eugenicists and other awful people means they don't care.

Does this mean that things will change if the Dems win back both houses?  I am not so sure, as the transmission belt of policy works if the executive respects the legislature and the Constitution.  Right now, we have Trump's minions defying the very basic rules of the system--not spending money that Congress has allocated.  I am not sure they will stop when the Dems hold some power.  

So, maybe it is not just cowardice and greed that block the transmission belt, but the end of the rule of law?

Anyhow, we shall see if Trump tacos on this, as the trade war is really bad for Americans.  To be clear, the trade war is really bad for Canada, but Carney is only getting more popular as Trump has thoroughly inflamed Canadian nationalism.  Canada is united.  The US?  Not so much. 

 

 

 

 

 

* I thought I had written a post about the broken transmission belt of policy, but I can't seem to find it.

Another Day in Trumpian Foreign Policy: Snatching Defeat from the Jaws of Maple Victory?

Bargaining with someone of bad faith is likely to go badly.  So, yeah, the US-Canada trade relations were most fraught.*  Because Trump can't keep his word (see his divorces, his bankruptcies, his many bluffs and retreats), Canadian negotiators had to be most wary.  Yet, because of the extreme leverage the US has over Canada--so many jobs in Canada are dependent, one way or another, on trade with the southern neighbor--Prime Minister Carney and his team were willing to make significant compromises.  But when the US made more demands, that blew up the deal apparently.

As I have posted here, since Trump is of bad faith, one should only negotiate over things that you are willing to do anyway.  The best example of this is: sure, put the F-35s in the deal, as Canada was (is?) still going to buy them anyway.  But don't give away much more than that, because Trump will just ask for more.  

The history here is illustrative.  Trump came into office demanding that NAFTA be revised even though it was a pretty good deal, and it reshaped markets in all three countries, making any big change very costly.  So, Mexico and Canada agreed to USMCA or CUSMA or NAFTA 2.0, which didn't really change much but gave Trump the ability to say he made a deal. Which, after all, is mostly what Trump wants--credit for making a deal, no matter what is in the deal.  Then Trump became President again** and decided to coerce Canada into another agreement, this time demanding many things that Carney couldn't really compromise on:

• Dairy access. Supply management is super annoying to me and many Canadians as it means higher prices for eggs, milk, cheese, etc, but the dairy cartel is very powerful here. So, there was no way Carney could give it up, especially for a promise by Trump to .... stop yammering at Canada for a few weeks.  
• Booze. In retaliation for all of Trump's bullshit--the tariffs and the 51st state stuff and the like--the provinces (not the federal government) decided not to buy American wine and liquor for their stores.  Since Ontario owns all of the beer and liquor stores, it happens to be the largest single purchaser of Americcan booze. Or was, until Trump pissed off Conservative premier (governor) Doug Ford.  Federal-provincial relations in Canada are complex, and, I believe the technical term is fucked.  The provinces didn't give the feds info about who got the covid vaccines even though the feds gave the provinces the vaccines.  Anyhow, Carney can't make the provinces change their stances.  However, it would have been fun to see the provinces return to the status quo ante and see most Canadians refusing to buy American booze.  
• Dropping all retaliatory tariffs while the US maintained the right to tariff anytime it felt like.  Disarming oneself while the other side maintains its weapons pointed at you is a non-starter.

Carney would have faced a big blowback had he surrendered on this agreement.  The news was already full of stories about angering compromises on taxing the big tech firms that have been trying to colonize Canada's information space and other areas.  So, yes, he has his own domestic politics that matters a lot.

But again, the core of this is this: if Carney gave in, Trump could at any point hit Canada again and again.  Trump has already been violating past agreements with Canada, so why would anyone think this one is binding?  With the Trumpers, including JD Vance shitting on Canada in the last few days, having no credibility to keep a commitment, Carney could not gamble here.

So, now we are in a trade war.  Americans will pay higher prices for Canadian goods and for goods that compete with Canadian goods (people forget that when tariffs increase the costs of importing, domestic producers will raise their prices to almost match the new prices).  Nice move before the midterms, Donnie.  

And no, Canada is not nasty for protecting its interests. Again, heaps of projection here since Canada's real sin for Trump is that it does not bend the knee.  

*  I am not a trade expert--Meredith Lilly, Jen Robson, Jeni Armstrong, and other sharp minds can speak to the trade stuff.  But I do teach US foreign policy, so I have to think about this stuff.

** One of the less fun parts of the Summer Institute this past week was being asked how Trump could win a second time given all that he did in his first term.  Oy. 

CDSN Meets NDHQ, 2026 Edition

The lighting always sucks in this part of DND,
but this is only place we can do this.

 One of the highlights of every year is the Canadian Defence and Security Network's Summer Institute.  Ripping off SWAMOS and BtG, we organize a weeklong workshop to discuss Canadian defence and security stuff with a mixed audience--roughly one third emerging scholars, one third military folks, and one third government types.  The idea is not just to have all of us discuss and learn about these issues, but to learn how the various folks in the defence and security community think about this stuff.  That the exchanges among the three groups are as important as the stuff they hear from our speakers.  It is the hardest thing we do each year as involves lots of planning, herding academic and non-academic cats, and it is a very intense week for our CDSN team.  It is also perhaps the most rewarding thing we do, as we see the lightbulbs go off and we see connections developing.  

Almost since the start, a day at Canada's defence headquarters has been on the agenda.  It started with a couple of talks and now has grown to a full day of briefings and roundtables.  I am as amazed every year with us getting high-level speakers as our participants are amazed at the quality of my cookies.  In most years, we get a chance to speak with the Deputy Minister of Defence, who as a general rule does not do that much public speaking (DM's across the government tend to not speak up that much, which in this realm, puts them at a disadvantage vis-a-vis the Chief of Defence Staff).  I hadn't met Christiane Fox, so it was great to meet her and get her perspective.  We also met folks from the three elements/environments (what Americans call services), getting a good idea of how the Navy, Army, and Air Force folks are thinking about this moment--about the threats facing Canada, about the injection of money as Mark Carney has pushed far more spending towards defence, and, yes, the Trumpness of it all.

I kept asking the same question because I have a book chapter I need to write--what can the Canadian Armed Forces do without any American assistance.  And the answers, as one of the participants pointed out, illustrated a civ-mil divide that Phil Lagassé pointed out a while back: the military sees the moment as rhetoric and wants to continue business as usual and the civilians are identifying a fundamental break and want to operative differently.  Oh my.  Good for the chapter, bad for Canadian civil-military relations.

I must run off to our fourth day of the Institute, where one of our panels is, indeed, on civ-mil.  

 

More Threat Deflation: Hypersonic Missile Edition

 I keep hearing about the threat of hypersonic missiles, and I keep wondering how this changes things?

 My bias: I am a big believer in mutual assured destruction and a big skeptic of strategic missile defense.

Yes, countries are developing missiles that go much faster.   Does this dramatically increase the threat to North America?  I don't believe it does.  The US has not yet developed a reliable, near 100% system for defending itself against ballistic missiles, so the impact of such hypersonics is ... to hasten our deaths in a nuclear war.  We would die faster.

I have heard some folks say that Canada might get hit by Russian or Chinese hypersonics equipped with conventional warheads during a Taiwan or Baltic scenario to discourage our participation.  Let me point out some of the problems with this:

•  the most obvious is: why should either country care that much about Canadian participation in such a conflict?
• any missiles being flung at Canadian cities (which are almost all near the US) would be seen as an attack on the US.  How confident can Chinese or Russian leaders be that the U.S. would not respond upon launch with a nuclear response?  Remember, a key to nuclear deterrence is that you only need a small risk of the worst thing happening to do deter.  So, can Xi or Putin or whoever be 100% the US wouldn't fire back? 

One of the basics of the nuclear era is that offense is easier/cheaper than defense, so any effort to build up defenses will be a waste of money in an offense/defense arms race.  We are seeing this now with drones versus counter-drone technology--that the US has used up most of its anti-missile missiles and Iran has plenty more cheap drones to send at American ships and other targets.  Maybe there will be a breakthrough for a cheaper way to knock down drones.  And, of course, a few conventional drones leaking through is not a huge deal.  A few nuclear hypersonic missiles will absolutely ruin your day.

So, yes, we should not be pleased that missiles are getting faster, but it does not change the fundamental reality that has existed since the 1960s--mutual assured destruction deters nuclear war.  Does it deter conventional war?  Absolutely in Europe--Putin has not engaged in any conventional attacks despite much temptation.  Does it work in South Asia?  Kind of, sort of.  Yes, India and Pakistan have engaged in conflict, but thus far, none has escalated very far.  The two countries fought several major wars before they each had nuclear weapons. 

Anyhow, I keep seeing all kinds of threats being inflated, but the world is scary enough without exaggerating some of them.  The reality is that climate change and far right subversion of democracy are realities that are hurting people every day, and, no, the military can't help us with those.  So, let's focus on the real threats that are doing real damage, and stop fantasizing about the other stuff.