Getty Images for Unsplash+

You think it’s not real. Just a bad dream! But you’d be wrong - it is all too real! However, just so we are clear, for most it remains Lake Ontario. And, believe it or not, this encounter is part of a presumed ‘trade war’, yes trade war between the two countries. Yup: Unbelievable! As presented in the NYTimes, by Erica Green:

“President Trump signed an executive order on Thursday to change the name of Lake Ontario to Lake America, carrying out his threat to rename the easternmost Great Lake as part of an escalating trade war with Canada.”

“During remarks in the Oval Office, Mr. Trump said that the order, which directs the Interior Department to update the government’s geographic name information systems to reflect the name change, was effective immediately.”

“Like Mr. Trump’s order to rename the Gulf of Mexico to the Gulf of America, Thursday’s order most likely requires
only federal entities to recognize the change, but it does not have to be
recognized by other countries. Mr. Trump told reporters that the administration
had “filed all the necessary papers, documents” and “notified all of the
various people that we have to notify” to make the change.”

““So we’ve done everything that you have to do,” he said, “and this is official, effective immediately.””

Also, it would appear for the moment that actual trade continues unabated, notwithstanding the tariffs and counter tariffs. As described in a recent National Bank Report in the Globe and Mail in a piece titled: “Canada withstands tariff upheaval, says National Bank CEO”:

“National Bank of Canada NA-T -4.20% decrease chief executive officer Laurent Ferreira says tariff uncertainty between Canada and the United States will affect businesses and consumers, but the bank’s home market has withstood them continuing trade turmoil over the past year.”

And Alan Beattie in the FT describes some of the reasons why this is:

“Familiar problems beset Trump’s tariff campaign. Canada is principally a supplier of energy and intermediate goods like lumber, aluminium, car parts and potash for fertilisers to the US. Blocking them principally hurts US industries.”

“The other lesson Trump has failed to absorb is that tariff wars don’t actually do much damage, except to the US’s credibility. The research service Global Trade Alert estimates that the steep tariffs Trump is imposing now, unless they escalate to the destruction of the US-Mexico-Canada (USMCA) trade deal, raise Canada’s average US tariff by just 1.9 percentage points to 6.3 per cent.”

“The consultancy Oxford Economics estimates that even including Canada’s dollar-for-dollar retaliation — Ottawa announced reciprocal tariffs on $20bn of imports on Tuesday — the tariffs will reduce Canada’s annual GDP growth over the next year by only 0.3 percentage points and permanently reduce its level by 0.2 per cent. (By comparison, Brexit has recently been estimated to have permanently reduced UK GDP by 6-8 per cent: that’s what a proper trade shock looks like.)”

“Ultimately, even for an open exporting economy like Canada, modern advanced countries are dominated by their domestic service sectors, not goods exports. The Canadian economy is hurt much more by services and product barriers between its provinces than anything Trump has done.”

The real danger is, of course, as pointed out in the Beattie piece that Trump announces the demise of USMCA. That would be destructive.

Now a quick look at a troubling, yet unclear visit, by the director of the CIA, James Radcliffe to Moscow. The trip there was all of eight hours, without a meeting with Putin, before he turned around and headed home. And, oh yes, he also visited Latvia briefly on his way to Moscow. My good colleague, Thomas Wright reviewed this puzzling visit in his most recent piece in The Atlantic”:

“The purpose of Ratcliffe’s visit remains unknown. In an interview with Glenn Beck this morning, President Trump described it as “sort
of semi-routine,” but such trips are rare.”

“A likelier explanation for this latest trip is that Russia is getting more dangerous and the Trump administration wanted to warn it against escalating.”

“Despite making little progress, Russia has continued to take heavy losses. In May, the Russian death toll reached nearly half a million, according to Anne Keast-Butler, the head of GCHQ, the U.K. intelligence agency.”

“Russia’s weakness could be making Putin more reckless. The Wall Street Journal reported a few weeks ago that the U.S. intelligence community is concerned that Russia could carry out a limited attack on a NATO state, possibly even launching a small land incursion. Such an assault might thwart Russia’s own interests, prompting Europe to accelerate its military buildup and target Moscow’s sovereign assets. But Putin may see attacking a NATO country as an unprecedented opportunity to break the alliance, by manufacturing a crisis in which the United States fails to act.”

“On his way to Moscow, Ratcliffe stopped in Latvia. Today, the Latvian prime minister called the trip am “very good signal,” which seemed to imply that Ratcliffe had been there seeking to bolster European security.”

Obviously, at least some alarms are ringing rather loudly in Washington. Let’s hope those following these events are not overthinking the situation. But maybe not. We will keep watching this matter closely.

Getty Images for Unsplash+

A quick note before I focus on this week’s subject(s). I did want to note that the most recent podcast in ‘Shaking the Global Order’ this with Yves Tiberghien of the University of British Columbia, and currently the Distinguished Professor and Dean of the Taipei School of Economics and Political Science, at National Tsinghua University is now posted at the Global Summitry Project (GSP) website. It is a great podcast, Yves examines the state of geopolitical relations today from Europe to China to the Indo-Pacific. Have a listen, you will enjoy.

Now to this week’s Post. I start with a rather sobering view of the global order brought to you by Mark Leonard, the cofounder and currently the director of the European Council on Foreign Relations (ECFR). Within the community of scholars and policy folk, and indeed political types, there is growing dismay over the disassembly of what was the rules-based liberal international order (RBIO). Early in his remarks at Foreign Affairs, (FA), he recalls Henry Kissinger’s classic statement on the international order:

“U.S. Secretary of State Henry Kissinger once asserted that world order rests on two pillars: a reasonably stable balance of power and a set of commonly agreed-on rules about what states may or may not do.”

And as he then goes on to argue:

“Today, both pillars are crumbling, and it is unlikely that they can be fortified or rebuilt any time soon.”

For him, and indeed many others, the global order has fundamentally been altered:

“This moment does not constitute a short interregnum between a U.S.-led order and a Chinese-led one. For some time, the world will be without any order at all—swept by fragmentation, contagion, and strangulation or the temptation to weaponize a wide variety of geographic, economic, and technological chokepoints. Rather than constructing a grand strategy, states will need to develop far more flexible and artisanal responses.”

The United States is still the key player, of course, as he notes but clearly now unwilling to even acknowledge the rules-based foundation or to determinedly protect or even strengthen the elements:

“The United States remains the world’s preeminent military, economic, and technological power. But it is increasingly clear that Washington no longer has the ability to prevent conflicts or ensure the free flow of commerce worldwide; it could not even open the Strait of Hormuz after a militarily hobbled Iran shuttered the waterway.”

“Even before Trump, the alliance system that helped the United States enforce the rules was weakening; China, Russia, and rising powers that didn’t make the rules were pushing against them.”

“Then, Trump launched a rebellion from within against the U.S.-led order, bullying American allies, ditching the World Health Organization, scrapping the U.S. Agency for International Development, and imposing widespread punitive tariffs. His will
to dismantle the order the United States built has been extraordinary.”

“But even after his presidency ends, in 2029, it is highly unlikely that the United States will resume its old role. Americans had already lost interest in being the world’s primary provider of public goods, its police officer, and its free-trade champion. And no other power has the ambition to take up the mantle.”

“In dozens of private conversations I have had over the past year with leaders worldwide, the only thing they agree on is that they do not know what will come next. They are struggling to use history or theory to find their bearings. The briefings they get from their intelligence agencies and diplomatic services no longer give them any certainty.”

“The central feature of these conversations is uncertainty, a sense that the world defies conventions and understanding. Episodes of rule breaking always characterized the rules-based order, but they took place within an overall framework that still held. This is the distinction: in a disordered world, actors violate rules they still recognize. In a world defined by what might be called “un-order,” they act without reference to any common framework at all.”

What then is the way forward if indeed this the global order we see emerging? Interestingly, Leonard offers two models of behavior – the architectural and the artisan, as he calls them. The former, he believes attempts to resurrect the RBIO. Here he describes such behavior:

“Architects develop blueprints for order and try to mold the world to their designs, developing universal norms and anchoring security in multilateral institutions.”

“Although they admit uncertainty, leaders in those places fail to grasp the changes they are facing, and their strategies too often propose maintaining the form of the old order without its substance—the legitimacy and enforcement capacity conferred on it by the United States. They are still scrambling to shore up the rules-based global trading system by attempting to build a carbon copy of the World Trade Organization’s deadlocked appeals mechanism and continuing to lodge complaints against U.S. tariffs at the WTO, the equivalent of shouting into the void.”

But artisans have a quite distinct approach:

“Artisans, on the other hand, don’t assume they have the power or resources to build grand structures from scratch. Instead, they use improvisation and flexibility to cope with a world that doesn’t lend itself to sweeping plans. In many ways, China already behaves like an artisan state.”

“Whereas architects seek stability, artisans prepare for chaos and change. Architects might try to reform the UN Security Council or restore the WTO’s appellate body. They would be wasting their time. Artisans follow the course diplomacy is already taking. China is an observer on the Arctic Council. The EU should likewise apply to join BRICS+, the Shanghai Cooperation Organization, or the Association of Southeast Asian Nations as an observer.” …

“On trade, an artisanal approach would mean investing in new infrastructure nodes built around corridors and ports, such as the Lobito Corridor, a logistics route connecting mineral-rich central Africa to the Atlantic. These promise greater rewards than sweeping trade deals such as those the EU has sought with India or the South American economic bloc Mercosur, which can take decades to negotiate. And instead of competing to nominate their diplomats as UN special envoys, Australia, Norway, Spain, Sweden, the United Kingdom, and similar states should seek to contribute to the more unconventional conflict mediation efforts now being spearheaded by countries such as Pakistan and Qatar.”

“Whereas architects see globalization as a means to transform others, artisans worry about the vulnerabilities that interconnectedness creates.”

In a concluding view of the two approaches Leonard suggests the following:

“Perhaps most important, while architects think about security from the outside in, artisans realize a country must be defended from the inside out. European and Indo-Pacific states must salvage what they can from the old security architecture—by, for instance, drawing on NATO’s command structures for military operations—and become far less reliant on the United States as an eternal security provider for their regions.”

Yes, from the inside out but also with small group efforts around specific initiatives. As Evan Osnos suggest sin his very good recent piece in The New Yorker:

“The likely successor to the American order, then, is not a Chinese order so much as what [Mark] Leonard [European Council on Foreign Relations] calls a period of “un-order”: a jungle in which every country hedges, arms, subsidizes, hoards, and searches for choke points to exploit. In the words of Suisheng Zhao, a China scholar at the University of Denver, it is the makings of a “twenty-first-century Hobbesian struggle of all against all.””

This conclusion is possible but I think overdrawn. It remains likely, in my view that states will continue to fashion plurilateral coalitions where collective action achieves greater protection but also economic advancement and indeed interconnectedness. It should not, and in my view likely will not be just “all against all”. There is a positive aspect to this more threatened global order described by Mark Leonard.

And then there is the immediate and ongoing trade conflict with President Trump – topic two. The immediate end of discussions between the US and Canada, it seems – and decision time - is late tonight - Friday. It appears, for the moment, like a trade deal is coming together – he says with some trepidation. As described by Stephanie Taylor and Tonda MacCharles at the Toronto Star there appears to be two battles for the Canadian federal government led by Mark Carney:

“The first battleground is in Washington, where Canadian negotiators met for hours with American counterparts to finalize what the leaders say is an impending agreement with one day to go before a reprieve that Trump granted on new 50 per cent tariffs expires. At stake, Carney’s officials say, is also the future renegotiation of the Canada-U.S.-Mexico deal that covers about 85 per cent of Canada’s cross-border trade.”

And then there is the other, battle that is:

“The other battleground is in Canada, where Carney faces the task of ensuring premiers agree to fulfil one of the central demands of the Trump administration: returning U.S. alcohol to provincial liquor store shelves.

“Ontario’s Doug Ford and B.C.’s David Eby were conspicuously silent Thursday on their decisions, awaiting more detail on what Canada is giving up in return for accepting lower but still harsh tariff levels on major sectors like steel, aluminum and autos, while Manitoba’s Wab Kinew vented his frustration.”

What appears to be a reality - that is slowly leaking out, is that this difficult tariff battle with the President is critical to the trilateral USMCA. Again as described by the two reporters in the Star piece:

“What became clearer Thursday is that the Carney government is cautioning would-be critics to realize no deal on Trump’s latest additional tariffs would put any chance at getting a renegotiated CUSMA in jeopardy.”

What’s at stake. Well, quite a bit:

“A senior federal official, speaking on condition they not be named in order to discuss the sensitive talks, told the Star that “it’s easy” for Kinew [Premier of Manitoba] and others to say Ottawa should keep fighting, but that the Carney government is weighing more than the impact of Trump’s latest threatened tariffs. The section 338 tariffs would affect not just five per cent of Canadian exports, but some 56,000 jobs according to a government analysis of the data, and $28 billion worth of goods in sectors that the official suggested don’t necessarily have the same ability as steel or aluminum sectors to pivot to new products and markets.”

“More important, the Carney government sees the proposed deal on the table as securing a “pathway” or agreement by the Trump administration to engage in a renegotiation of the Canada-United States-Mexico Agreement (CUSMA), and acknowledgment that CUSMA is in the economic interest of all three parties, weeks after Trump said his country didn’t need CUSMA and might do only side deals.”

“The official added “part of the realistic world” the Carney government is looking at is that the latest tariffs would hit five per cent of trade now “and if we lose CUSMA entirely, it’s 85 per cent of trade” that could be affected.”

There is much at stake. And while I worry it could all fall apart, I am still – optimism is too strong – of the view a deal will be struck. Then the question will be how to mitigate the damage that will accompany the agreement to contain the Trump tariffs. More on that after the announcement.

Photo by Ian Taylor on Unsplash

It is sometimes quite hard to watch Donald Trump roll out his foreign economic and trade policy – not to mention his national security policy. And his tariff bullying and threats are especially dismaying. Yet Trump’s determination to use tariffs notwithstanding it such efforts fail in most instances to benefit the United States are no bar to this ‘Local Bully’. But it seems beyond him to assess tariff utility. It has become his policy signature, along with all other aspects of his local bullying. Yet we should be aware that some of these initiatives do show at least some tactical insights.

Notwithstanding the set back to Trump tariffs by the recent decision of the Supreme Court, Trump is beating again his favorite ‘policy drum’ – tariffs. The President already has imposed tariffs on Canada, and many other trade partners, and now he is raising the threat of further tariff impositions - this on August 19^th. As described by Marieke Walsh and Adrian Morrow at the Globe and Mail (G&M), one of Canada’s major papers, they first describe the tariffs that have already been imposed:

“In addition to the latest tariff threat, the U.S. President has already imposed tariffs of 50 per cent on steel and aluminum, 25 per cent on autos, 10 per cent on lumber and 25 per cent on wooden furniture under Section 232 of the Trade Expansion Act of 1962.”

And now in addition to those tariffs already applied Trump now threatens a whole new set of additional tariffs:

“Mr. Trump has said he will impose 50-per-cent tariffs on $20-billion worth of Canadian goods on Aug. 19. The punitive tariffs apply to a range of goods, including ones that are supposed to be protected by the countries’ free trade pact.”

“The new tariffs would be particularly damaging for industries in Ontario, B.C. and Quebec. They would follow Mr. Trump’s previous tariffs on autos, steel, aluminum and forestry products, making them especially punishing.”

Now, there is reason to believe that this targeting may in fact be more tactically useful than apparent at first glance. So the new tariffs as described by Adrian Morrow and Mark Rendell, again from G&M:

“The new tariffs would be implemented under Section 338 of the Smoot-Hawley Tariff Act of 1930. While they would affect only about 5 per cent of Canadian exports − a range of goods from alcohol to dairy and electronic equipment − they would hit some industries particularly hard, likely a calculated move to get those sectors to put pressure on Ottawa for a deal. The tariffs would be felt most acutely in Ontario, Quebec and British Columbia − while mostly sparing Alberta and Saskatchewan, the two provinces not boycotting U.S. alcohol.”

As the Economist points out, these tariffs under Smoot-Hawley also seem to provide an ‘easier’ executive pathway for Trump than earlier approaches:

“Europe and the rest of the world should take heed. Mr. Trump has form in attacking Canada first with weapons which he subsequently turns on others, both tariffs and threats to territory. This time, if the new tariffs come into force on August 19th, Canada will be the first country ever to be subjected to tariffs under Section 338 of the Smoot-Hawley Tariff Act, a law passed in 1930 that allows the president to respond to perceived trade discrimination. Tariffs under that act, unlike the emergency duties struck down by the US Supreme Court in February, need no congressional approval. “This looks a lot like the future of Donald Trump’s trade policy because it gives him flexibility,” says Eric Miller, head of the Rideau Potomac Strategy Group, a trade consultancy in Washington.”

And as Matthew Winkler notes in Bloomberg:

“Trump’s 50% tariffs, employing a Depression-era provision of the Smoot-Hawley Tariff Act of 1930 that hasn’t been applied or tested in modern courts, exclude energy, potash, fish and critical minerals. They include [however] goods that had previously been protected from import taxes by the USMCA.”

In the face of the looming threat of new additional tariffs, the Carney government has responded in a number of ways including recently to blunt, to at least some degree, these tariffs. Raisa Patel in the Toronto Star describes a rebate programme recently announced by the Canadian government:

“The Carney Liberals launched a $100-million rebate program on Monday to help Canadian steelmakers sell more product at home, as Ottawa stares down a looming deadline to avert a fresh wave of American tariffs.”

“At a CN rail yard in Hamilton, Transport Minister Steven MacKinnon said the federal program will provide a 50 per cent rebate on rail and marine transportation costs for Canadian steel shipped across provincial and territorial lines.”

“The temporary program is one of the Liberal government’s attempts to alleviate more than a year of trade pain that has seen the White House target a range of strategic sectors, including imposing tariffs of up to 50 per cent on Canadian steel in the name of national security.”

“The rebate program launched Monday and is slated to expire next summer, or until funds dry up. A single steelmaker is able to receive a maximum amount of $50 million through the program, which will disburse funds on a first-come, first-served basis.”

The pressure is evidently on to reach a deal that will prove to be acceptable to Trump. Resolution is vital. But Canadian government officials and negotiators also have expressed concern that further tariffs could be a ‘last straw’ in the back to back discussions between the two government. As described again by Walsh and Morrow in the G&M:

“Canada’s top trade negotiator has warned her American counterparts that if the White House imposes new tariffs on Aug. 19, the move would represent a “cliff” that risks halting negotiations with the U.S.”

“The sources said she warned the officials that Ottawa would not be able to rein in or control the public or premiers’ reactions and the federal government will have lost the room to negotiate with the Americans.”

And if that were to occur, well, not surprisingly the following might well also occur:

“A Canadian retaliation would almost certainly provoke a counter-retaliation by Mr. Trump, ratcheting up the bruising trade war even further, one of the sources said, such that Ms. Charette impressed on Mr. Greer that now was the window to reach a deal.”

Nevertheless, US negotiators remain optimistic:

“U.S. officials are optimistic that a deal can be reached by Aug. 19, the source said, but they are worried about the ability to sell the pact in Canada.”

This relatively positive view of the US-Canada tariff negotiation is also described by Raisa Patel in the Toronto Star that has been following these negotiations closely:

“Canadian and American negotiators hope to present U.S. President Donald Trump with a joint trade proposal in the coming days to head off a new round of U.S. tariffs.”

“One source said there are plans to deliver the proposal to the U.S. president as soon as Monday [August 17^th], while another source said a potential pact could come together even earlier.”

“Both sides have been closing in on a “comprehensive” trade deal, the Star has reported, after talks ramped up in recent weeks following Trump’s order last month to impose 50 per cent levies on a wide range of Canadian goods in August. Those tariffs are set to apply to imports covered by the Canada-U.S.-Mexico free trade agreement, which the White House has opted not to renew in its current form.”

“Conversations have revolved around Canada’s willingness to make concessions on a number of trade irritants, including provincial decisions to pull American booze from store shelves, “Buy Canadian” procurement policies, retaliatory tariffs on U.S. autos and Canadian dairy protectionism.”

“One of Mr. Trump’s top demands is for the ban that most premiers have imposed on American alcohol to be lifted. But premiers, in particular from Ontario, Quebec and B.C. have made it clear that they will be the ones to decide when that happens and they have insisted that the 232 tariffs in particular be resolved first.”

Are we close to a ‘cliff’ – it is certainly possible. There could be a strong reaction from the Canadian public. And, several provincial authorities may ‘dig in their heels’ over alcohol sales. As suggested by Walsh and Morrow G&M:

“One of Mr. Trump’s top demands is for the ban that most premiers have imposed on American alcohol to be lifted. But premiers, in particular from Ontario, Quebec and B.C. have made it clear that they will be the ones to decide when that happens and they have insisted that the 232 tariffs in particular be resolved first.”

It is also likely that these tariffs have a strategic element targeting provinces that have opposed US actions most. Again, from Walsh and Morrow:

“The new tariffs would be particularly damaging for industries in Ontario, B.C. and Quebec. They would follow Mr. Trump’s previous tariffs on autos, steel, aluminum and forestry products, making them especially punishing.”

So, in fact there may an element of strategy to the madness. And I am of the view still at this moment that notwithstanding all the shouting and ‘pulling of hair’, a deal can and should ultimately be reached. The bully is here; you can’t miss him. And he is loud, very loud. But is it possible to advance? I suspect it is notwithstanding all the noise.

Finally, just a quick update on the current state of the appointment of the next UN Secretary General. The field is now apparently set. As described by IISD, here it is:

“Subsequently, UN Member States nominated:

· Rafael Mariano Grossi (Argentina), nominated by Argentina on 26
November 2025;

· Michelle Bachelet Jeria (Chile), nominated by Chile, Brazil, and
Mexico on 2 February 2026);

· Macky Sall (Senegal), nominated by Burundi on 2 March 2026;

· Rebeca Grynspan Mayufis (Costa Rica), nominated by Costa Rica on 3
March 2026;

· Virginia Gamba (Argentina), nominated by Maldives on 11 March 2026
(candidacy withdrawn on 25 March 2026);

· María Fernanda Espinosa Garcés (Ecuador), nominated by Antigua and
Barbuda on 11 May 2026;

· Carolyn Rodrigues Birkett (Guyana), nominated by Guyana on 15 June
2026; and

· Olara Otunnu (Uganda), nominated by Uganda on 24 July 2026.”

The selection process is also reasonably clear:

“The tenth Secretary-General will be appointed by the UNGA [UN General Assembly], on the recommendation of the Security Council, in accordance with Article 97 of the UN Charter. Assuming the role in January 2027, the newly appointed Secretary-General will serve a term of five years, which Member States can renew for an additional five years. While technically there is no limit to the number of five-year terms a Secretary-General may serve, none has held office for more than two terms. No woman has ever held the position of Secretary-General.”

In other words, the General Assembly will choose subject to a veto by the permanent members of the Security Council. We will see. The utility of this ultimate multilateral remains all too apparent. But that is for another day’s discussion.

Photo by USGS on Unsplash

Photo licensed under the Unsplash+ License

Europe, it would seem is still committed to enlarged autonomy and a more determined collective effort for greater defense and security in the light of Trump’s waning commitment to NATO and still what seems like a rather feeble commitment to Ukraine. But if recent history is a guide at all there are still many doubts. Still, it would seem that Europe is speeding toward a security statement. As pointed to by Pierre Vimont points out in a CEIP piece, the European Commission is rushing, so it would seem, to get a strategy document out: this to be presented by the President of the European Commission, Ursala von der Leyen this coming September:

“The European Commission’s recent decision to draft a new European Security Strategy has come as a surprise to many. And the desire to deliver it on a very tight timeline, in time for Commission President Ursula von der Leyen’s State of the European Union address in September, a mere four years after the EU’s Strategic Compass, is perplexing to some.”

Vimont spent some thirty-eight-years with the French foreign service, including as ambassador to the United States and ambassador to the European Union. The determination to put out a strategy document may be the result of current difficult European circumstances that can no longer be ignored by Europe:

“But the union’s strategic environment has experienced epochal shifts: Russia’s grinding war in Ukraine, China’s accelerated economic dominance and existential threat to many European industries, as well as the United States’ transformation from most trusted ally to unreliable and sometimes coercive partner. Europe is therefore confronted with a new world order where hard power has become the name of the game. As a consequence, security concerns permeate all policies far beyond the military sector. They shape ongoing debates about economic overdependence—from energy to digital applications or critical minerals—with the risk of being instrumentalized for political purposes.”

As Christopher Chivvis, Milan Vaishnav and Rohan Mukherjee point out in FP:

“Today, Europe cuts a hesitant figure on the international scene. It could become a lonely one if it fails to clarify what it represents, where it wants to go, and which partners it intends to work with. This is where the new security strategy can make a difference. In the end, this process should be about redefining the European identity as it confronts a massive set of issues rarely seen in its history.”

“From that point of view, Europe could go for an inward looking approach or, conversely, choose to lead an alliance of like-minded countries dedicated to the reform of the multilateral order. Equally, it could simply focus on managing the present crises as best as it can or raise its game to a vision of what it wants to be in the long term.”

But as Michael Shear in the NYTimes has described the current context for Europe:

“The Iran war — a conflict that most of Europe never wanted — has disrupted life across the region, driving up the price of gas, groceries and travel. The continent’s leaders have pledged to help secure the passage of oil through the Strait of Hormuz once the fighting ends. And yet, they seem destined to hear about the next stage of the war from Mr. Trump’s social media feed.”

“But like so much else that has happened in the past several years, many of Europe’s challenges are out of its control.”

“Europe has been unable to resolve the war in Ukraine after more than four years of bloodshed. Its achievements in cutting emissions to combat climate change are overshadowed by the actions of the United States and China. The future of A.I. is being shaped largely elsewhere. Right wing populism has risen, fueled by migration, inequality and misinformation.”

““No matter how you look at it, measure it, this is a difficult, unsettling time for Europe,” said Richard Haass, who served for two decades as the president of the Council on Foreign Relations. He said Europe is partly a victim of circumstance, but also is responsible for its lack of authority over its own fate.”

““It’s not just that they’ve under-spent, but they’ve underorganized themselves when it comes to their own security,” he said. “It’s essentially a bystander, with few exceptions, to the A.I. competition. That’s not something that was done to Europe by the United States or China. That was something that was done by Europe to itself.””

As Richard Haass, former President of the Council on Foreign Relations concludes:

“… he thinks the lack of unity underscores the fundamental problem for Europe as it seeks to shape its future.

“The whole,” he said, “is much less than the sum of its parts.””

It is a very troubled European picture. It will take greater unity and determination than has been shown in the last years. But the regional and global environment may be such that Europe will be driven to greater unity – maybe, kicking, dragging and even screaming. We will see.

On the Canada-US side ‘the sparing’ over whether to successfully conclude a North American trade agreement continues – painfully I might add. As Adrian Morrow and Mark Rendell in the Globe and Mail describe it:

“But Mr. Trump’s plan, unveiled last month, to hit an additional US$20-billion worth of Canadian exports with 50-per-cent tariffs starting Aug. 19 lit a fire under Ottawa, according to two Canadian government sources and one U.S. industry source.”

“The new tariffs would be implemented under Section 338 of the Smoot-Hawley Tariff Act of 1930. While they would affect only about 5 per cent of Canadian exports − a range of goods from alcohol to dairy and electronic equipment − they would hit some industries particularly hard, likely a calculated move to get those sectors to put pressure on Ottawa for a deal. The tariffs would be felt most acutely in Ontario, Quebec and British Columbia − while mostly sparing Alberta and Saskatchewan, the two provinces not boycotting U.S. alcohol.”

“Steel and aluminum have been at the heart of Canada-U.S. trade tensions since the first Trump administration, when the President put a 25-per-cent tariff on both metals and left it in place for a year during negotiations over the North American free-trade agreement.”

“The steeper 50-per-cent tariffs have severely squeezed exports of both metals, with shipment volumes heading to the U.S. falling by half in the months after the introduction of tariffs last spring. Aluminum exports have recovered somewhat since then but remain well below 2024 levels; steel exports remain roughly half of what they were in 2024.”

The vocal ‘sharp’ back and forth from both Carney and Trump tells you something about the probable negotiating calculus of both North American leaders. As described by Alex Ballingall in the Toronto Star, in an article titled: “Donald Trump calls Canada’s leaders ‘nasty.’ Mark Carney says trade talks are, too”

““Yes, it’s a tough negotiation,” Carney said in French. “We could change the adjective and say ‘nasty,’ but for Canada it’s a question of jobs, Canadians’ jobs. It’s a question of the future of Canadian businesses.””

“In English, he added, “Yes, we’re standing up for Canadian workers and Canadian businesses, as we always have from the start.””

“Carney was responding to a comment that Trump made in Las Vegas on Wednesday night, when he called out several countries while claiming the U.S. has been “screwed by everybody for years.””

““Canada’s nasty. They are. They’re nasty,” Trump said. “I love the people, but they’re nasty. Nasty leadership.””

As pointed out in this same piece, however, serious discussions do actually continue:

“Meanwhile, for the second week in a row, Intergovernmental Affairs Minister Dominic LeBlanc and Canadian lead trade negotiator Janice Charette were in Washington, D.C. on Thursday for what Carney described as “detailed discussions” with the Americans on a “global” set of issues.”

“In a post on social media, LeBlanc said they had a “constructive and detailed meeting” and that Canada is still pushing for an agreement that “addresses sectoral tariffs” the U.S. has imposed on autos, steel, aluminium and other industries. “

“After Trump threatened the latest round of tariffs in July, Carney pledged that talks would intensify as Canada tries to convince the U.S. — which has ruptured the state of trade with much of the world by using tariffs in a bid to boost American industries — to lessen duties imposed since Trump returned to the White House last year.”

So will they conclude an agreement before August 19^th? Well, as Carney suggested:

““Will we get all of that by the 19th of August? We’ll see. But we have to have pathways in order to get that,” he said.”

Canada and the US, or more precisely, Trump and Carney need to reach a successful outcome, maybe not immediately but I suspect eventually - a successful outcome in the longer term partly because Trump will be so preoccupied in so many other and equally consequential issues and outcomes.

There is the Mideast that won’t go away easily for Trump. And then there is China. And indeed the sign of the continuing China dilemma was revealed yet again with China’s numbers on exports. As pointed out in the NYTimes by Daisuke Wakabayashi”

“Even as countries around the world move to curb the flood of Chinese goods, China’s export machine continues to steam ahead. The country posted a trade surplus of $112.5 billion in July, according to data released Friday by the General Administration of Customs.”

“It was the third straight month in which China’s exports exceeded its imports by more than $100 billion — a staggering sum that puts the country on pace to surpass last year’s record $1.19 trillion trade surplus. In July, China’s exports rose 23.9 percent in U.S. dollar terms, while imports climbed 27.5 percent in July.”

There is a lot of bluster. But events keep pressing on the President and he knows, I suspect, how to reduce at least some of that pressure.

Photo by Markus Spiske on Unsplash

Europe is the midst of a very hot, hot summer. I know since I was recently in Europe, or at least in the UK. There are some very real conflicts that in one way or another draw in Europe – in Ukraine and in the Middle East. These conflicts have, or will likely have, real and enlarging consequences for Europe. In both cases Europe faces Trump administration actions and a growing sense that this President has little clue how to aid in resolving the first conflict between Ukraine and Russia, or to end the war that Trump started along with Israel with Iran and bring to a close what may well be a dramatically harmful outcome to US global leadership.

First let’s take a look at the state of US-European relations most evidently on display this month at the recent NATO Summit in Turkey. There was great concern that Trump was going unravel this key longstanding security arrangement and put at great risk Europe in the face of an aggressive Russia.

Steven Erlanger and Lara Jakes in the NY Times quickly described the evolution of the NATO partnership:

““NATO 1.0 was a clear defense against Soviet aggression and expansionism, and NATO 2.0 was a post-Cold War search for purpose,” he said in an interview, with the alliance looking outside North America and Europe and after Sept. 11, especially, to fight terrorism in Afghanistan and the Middle East.”

“But with Russia’s full-scale invasion of Ukraine in 2022, China’s rising ambitions and Washington wanting to shift resources to Asia away from Europe, Mr. Sikorski said, “NATO 3.0 will mean that Europe will take more of the burden for conventional defense and the U.S. will be more of a cavalry-over-the-hill kind of ally.””

What Europe must now do was at the heart of a piece prepared by Ursala von der Leyen, the President of the European Commission and Mark Rutte the Secretary General of NATO. In an article in The Economist at the time of the NATO Summit they set out what Europe was undertaking, and further what Europe needed additionally to do in the face of Vladimir Putin and indeed of Donald Trump:

“Europe’s era of outsourcing much of its defence is now over. European NATO allies and EU member states are relearning that if
we want to prevent war, we have to be ready for it. They are rearming and
re-energising the defence industrial base so that we can protect our citizens,
our freedom and our security. Defence spending and production are both rising:
new factories are opening, and existing ones are adding shifts and production
lines.”

“It is not just traditional defence companies ramping up. Increasingly we are seeing massive innovation in the sector. New companies are developing the tools and technologies that modern warfare calls for. Drones, unmanned ground vehicles, electronic-warfare systems—these are all necessary for our armed forces to deter, protect and defend.”

“The mindset has shifted. Even civilian car manufacturers are repurposing factories to produce components for the defence sector, including air defence and long-range drones.”

“In this more dangerous world, a stronger European defence industry capable of producing at scale and at speed is crucial to credible deterrence. The only way to get there is through co-operation: combining the efforts of countries and industries, allies and partners.”

As it turned out ‘fireworks’ were avoided at the NATO Ankara Summit, much to the relief of Europe’s governments and the EU. The almost palpable ‘sigh of relief’ by European leaders was described by Mark Leonard, the Director of the European Council on Foreign Relations:

“European leaders breathed a sigh of relief as US president Donald Trump departed last week’s NATO summit in Ankara, Turkey. Despite a few unseemly moments in which Trump reiterated his desire to seize Greenland and nonsensically ordered a halt to all trade with Spain, the meeting went off without any major catastrophes.”

“Most importantly, Trump did not announce any major troop withdrawals from Europe or any moves to leave the alliance. He even had warm words for Ukrainian president Volodymyr Zelensky, and pledged to grant Ukraine a license to manufacture Patriot air-defence missiles domestically. By the end, even Trump proclaimed that there was “love” in the air.”

For Leonard, however, it is not about breathing a sigh of relief and pretending that the alliance remains, all things considered, strong. Europe must now assess what needs to be undertaken going forward to safeguard against an aggressive Russia and an uncooperative Trump administration :

“Instead of spending an arbitrary share of their GDP on defence, they should critically evaluate their capability gaps and adjust their spending to match their needs. Coffers are tight everywhere, but it will be easier to justify expenditures on weapons if they appear less geared toward flattering Trump.”

Tough times are now.

Then, there is the Iran conflict. This is a war that for the moment cannot be concluded, notwithstanding Trump’s optimistic announcements. While the conflict focuses on Iran, the United States and near Mideast countries the shutting down of various waterways to energy and to trade more broadly impacts many including of course Europe.

Notwithstanding Trump’s ‘huffing and puffing’ the Trump hesitancy to move its kinetic strategy forward is apparent. David Sanger just reviewed Trump strategy and his hesitancy and uncertainty of the way forward for the US and its allies. As Sanger wrote in the NYTimes article titled, “Trump Seems Trapped by Iran War, Even as He Wields the World’s Biggest Hammer”:

“President Trump often celebrates his unpredictability, declaring that it keeps allies and adversaries alike off balance.”

“He has discovered limits on his power that he could have scarcely imagined as he began full combat operations on Feb. 28, when he set out goals for a swift end to Iran’s nuclear program and the overthrow of the country’s government.”

“Five months later, those goals remain almost entirely unaccomplished. And Mr. Trump, once confident that overwhelming force would enable him to pursue in Iran what he proudly called the “Venezuela model” — a change of government to one amenable to U.S. control — is now hesitant to plunge back into major combat operations that his intelligence agencies assess are unlikely to work as well in Tehran.”

Sanger then outlines three possible, though unhappy ways forward for this muddled President:

“Five months later, those goals remain almost entirely unaccomplished. And Mr. Trump, once confident that overwhelming force would enable him to pursue in Iran what he proudly called the “Venezuela model” — a change of government to one amenable to U.S. control — is now hesitant to plunge back into major combat operations that his intelligence agencies assess are unlikely to work as well in Tehran.”

“On Friday, after signaling all week that he was planning a return to major combat operations in Iran, he pulled back. In briefings, according to several officials, aides cast doubt on whether a massive bombardment, one that cut off electricity and went after Iran’s resilient missile capability, would result in Iran’s return to meaningful negotiations.”

“Mr. Trump’s second option is to let sanctions sink in, hoping that further crackdowns on oil exports, enforced by the renewed blockade of shipments into and out of the Strait of Hormuz, will have their intended effect.”

“But those are slow, and Mr. Trump has been predicting economic collapse in Iran since he first pulled out of the Obama-era nuclear deal in 2018 and imposed what he called crushing controls on Iran. Eight years later, the regime lives, under a new leader who could be more dedicated to a covert nuclear program.”

“The third option is to declare victory and go home. Mr. Trump seemed to be headed that way a month ago, when he said he had chosen a cease-fire and negotiations because he did not want to risk a depression that would invite comparisons to Herbert Hoover.”

“But exiting comes with costs. If Mr. Trump leaves Iran with its near-bomb grade nuclear fuel buried under rubble and with the Strait of Hormuz under de facto Iranian control, he will have failed to address the problem that triggered his attack and created a vast new one for energy markets.”

Julian E. Barnes, Helene Cooper and Eric Schmitt, again in the NYTimes, and yet again looking at the unpalatable options now left to the US President, put it this way:

“In an odd way, the Trump administration’s current struggles with Iran are at least partly the result of the U.S. success at the start of the war.”

“Iran’s new leaders, he added, want to inflict as much damage on the United States and its allies as it can to deter a future war against their country.”

They conclude with the following:

““The president [according to Nicholas Hopton, now a distinguished fellow with the Royal United Services Institute for Defense and Security Studies in London] of the United States still doesn’t seem to have made up his mind whether he wants a negotiated solution to this or to try for some kind of military conclusion, which all observers who know the situation in Iran and have worked in the Gulf would say is highly unlikely to work,” Mr. Hopton… said in a webinar on Wednesday.”

Unsure yet prone to ‘bullying’ is not a formula for any kind of successful outcome. I think European leaders are looking with growing worry over Donald Trump’s actions and the impact of these Trump actions on European wellbeing. Whereto from here for European allies presents difficult choices for these pressure leaders. But further actions are required. I will follow and report on those actions as they emerge.

Photo by Uran Wang on Unsplash

Yes, this is a picture of Manchester. But, no, I wasn’t there. Nevertheless, I had the opportunity to be in the UK for super family holiday time – in fact in London. And it was indeed, lovely.

So, why the image of Manchester? Well, It’s because the ‘King of the North’, Andy Burnham, the former mayor of Greater Manchester recently took the leadership of the Labor Party and became, asa result, the newest Labor Prime Minister in the UK.

A New and Not So New Politics in the UK

This newest Prime Minister has been received, it seems, cautiously and I suspect not without reason. What is needed for the UK is not really what the UK public desires. Pessimistically ,The Economist reflects on Burnham’s early statements:

“Yet Britain’s new leader wants to wind back the clock. Andy Burnham became prime minister on July 20th after winning the endorsement of 94% of Labour MPs.

“The new man was folksy, and brimmed with the belief that he can get stuff done. But a prime minister’s first address is the moment to tell voters the truth about the
hard choices that a sunnier future demands. Mr. Burnham used his to hawk a
soothing mix of nostalgia and giveaways.”

“Mr. Burnham gets Britain’s malaise back to front. The problem is not that Britons are being lashed by the winds of globalisation. It is that they change jobs, switch between sectors and move home for work less than they used to. Stagnation, not disruption, is the disease.”

“Then came the giveaways. Mr. Burnham says his priority is giving the public “breathing space”, with energy bills and bus fares subsidised by “reprioritising” long-term government programmes. His arithmetic is shoddy and (again) his diagnosis is faulty. To blame high nominal prices for the country’s woes is to look at the wrong side of the ledger.”

“The underlying problem is years of stagnant real wages, owing to weak productivity growth. Mr. Burnham’s prescription—scrapping tomorrow’s reforms for sweeties today—is a recipe for further stagnation. It will do nothing for Britain’s economic funk, but it will feed a cynical politics that tells voters the best they can ask for from their leaders is money-off vouchers.”

“The hardest truth is that Britain is living beyond its means and the bond markets have the Treasury on notice. Sir Keir [Starmer] failed above all because he could not reconcile his promises to avoid tax rises, reduce borrowing and repair public services. Instead of untying this knot, Mr. Burnham is pulling it tighter.”

“The danger is that nostalgia and handouts work for Labour. If Mr. Burnham gets the poll bounce he craves, he will double down. But here Labour’s interests diverge from Britain’s. The road to productivity growth and better living standards lies in reforms that make Britain an attractive place to invest and nurture businesses. Turn backwards, and the rewards from a world moving ever faster will pass Britain by.”

And then there is Brexit. The costs of that action will be tallied for years to come.

Judah Grunstein at WPR, pointed out, as did several others, that achieving sustained growth in the UK, which is a must, while providing ‘goodies’ for electoral success is not likely to end well:

“Burnham must somehow fund all these priorities while under the watchful eye of the bond market, and investors already consider the British government to be over-indebted. With no fiscal room for maneuver, Burnham could possibly redistribute the tax burden from lower-wage to wealthier earners, providing the relief he has promised without resorting to further borrowing. But that risks alienating the wealthy investors ostensibly needed to jumpstart the sluggish
economy, for results that, like the savings on electricity taxes, may not even
be noticed by wage-earners.”

“All of that makes for a very difficult circle for Burnham to square, at a time when Reform UK had been the fastest-growing party in the country (at least until its leader Nigel Farage was tarnished by a recent string of financial scandals). Burnham himself called his premiership Labour’s “last chance” to get it right upon accepting the party
leadership position four days ago.”

“In this, Burnham faces a similar conundrum to France’s Emmanuel Macron, Germany’s Friedrich Merz, and other mainstream European leaders facing challenges from the insurgent anti-immigrant far right. Without growth, popular anger is only likely to surge further.”

Improving and sustaining growth is a must. Unfortunately, the politics there, and indeed in lots of places, makes improving productivity a political reach too far.

Tariffs, Tariffs and More Tariffs

And then there is the continuing tension between the Carney Liberal government and President Trump. Early in the week the Trump administration imposed new tariffs on one of Trump’s favorite targets – the 51^st state – Canada. As described by Ana Swanson and Ian Austen in the NYTimes:

“President Trump on Monday signed orders to impose a 50 percent tariff on a wide range of Canadian goods, claiming that Canada had discriminated against the United States in key industries.”

“The tariffs, which go into effect in 30 days, would be imposed on a range of Canadian exports, including wine, hockey sticks, cement, dairy products, plywood, paper and furniture. Administration officials said the taxes were punishment for Canadian discrimination against three U.S. industries: motor vehicles, dairy and alcohol.”

“The new tariffs will be imposed under an obscure legal provision, Section 338 of the Tariff Act of 1930, which Congress wrote as the Great Depression deepened. The law allows the president to put tariffs of up to 50 percent on imports from countries that discriminate against U.S. commerce uniquely, as compared to other countries.”

The Section 338 tariffs are the newest effort by this Administration to find a legal basis to impose tariffs principally on allies and major trading partners. As the Canadian Prime Minister pointed out, these most recent tariffs:

“… were the latest in a series of U.S. actions that are in “in direct violation” of the trade agreement between the two countries and Mexico.”

“The tariffs will not apply to energy products, potash, certain fish and minerals, or products that are already subject to national security tariffs ranging up to 50 percent, like steel. Yet unlike previous rounds of U.S. tariffs, there would be no exemptions for Canadian goods covered by the United States-Mexico-Canada Agreement, the free-trade deal that Mr. Trump negotiated and signed into law during his first term, a senior administration official said.”

And in fact, according to Raisa Patel at the Toronto Star, there is more than a little conjecture, and suspicion that these tariffs are in part all about the trilateral trade negotiations.

“Nearly one in six products captured by U.S. President Donald Trump’s latest tariff spree are goods Canada
doesn’t export to the United States, Canadian officials recently told Ottawa’s
economic advisory council — something experts say may shed light on the
thinking behind Washington’s strategy.”

“Jean Simard, head of the Aluminium Association of Canada and a member of Prime
Minister Mark Carney’s Canada-U.S. advisory council, told the Star on Tuesday
that officials conveyed to members that 85 of the 555 targeted products are
goods Canada does not sell to the United States.”

“For Simard, that was evidence that Trump’s newest trade escalation had “all the
makings” of a pressure tactic designed to squeeze Canada further.”

Larry Herman, a trade specialist from Canada certainly views the tariff list suspiciously:

“However, despite the seemingly haphazard nature of the list, which also includes products like horsehair and flower bulbs, Herman said he believes the conscious targeting of certain provinces and sectors shows the slate was carefully curated.”

And so does Danielle Kurtzleben of NPR:

“Well, the White House has been straightforward in saying these new tariffs are a way of getting back at Canada.”

“Well, in response to Canadian tariffs on U.S. cars, the administration has a wide range of products they’re targeting. There are some types of plywood, essential oils, even tulip bulbs. I mean, really, across these different tariff proclamations, there are long, very specific lists of goods. For example, digging through, I noticed a few very Canadian pieces of sports equipment being tariffed - hockey sticks, ice skates and fishing rods. But that brings me to something important. There’s a wide range of goods being tariffed and at 50%, which is high, but it’s still not a huge amount of goods.”

Kurtzleben “bottom-lined” Trump administration actions with a view, expressed by Kathleen Claussen, a professor at Georgetown University law school who suggested:

“I think about them as leverage in the USMCA negotiations because these are areas that have been irritants for the bilateral relationship.”

But wait we are not yet done because as we cruise toward the weekend, the Administration has announced a new set of tariffs as the current Section 122 tariffs come to a statutory end. These new tariffs apply now. As described, again by Ana Swanson in the NYTimes:

“The Trump administration will impose tariffs of around 10 percent on goods from more than 80 countries on Friday, its latest effort to put in place an expansive protectionist policy that has been repeatedly challenged in court.”

“The tariffs will range from 10 percent to 12.5 percent and take effect at 12:01 a.m. on Friday, replacing a global 10 percent duty set to lapse at the same time. Mr. Trump issued that earlier tariff in February, after the Supreme Court struck down duties he imposed last year.”

“The duties will be issued under Section 301 of the Trade Act of 1974, which allows the president to impose tariffs on foreign countries that engage in unreasonable or discriminatory trade practices. The administration has cited the failure of foreign countries to pass or enforce laws banning the importation of goods made by forced labor into their own countries, saying that disadvantages U.S. businesses that do follow such laws.”

As for Canada:

“Canada, which will be subject to a 10 percent tariff under the arrangement, already prohibits importing forced labor goods. The European Union, also at 10 percent, has a ban that is scheduled to take effect in December 2027. But Trump officials say that the governments have not effectively enforced those laws.”

Having said that though, there are exemptions applicable to Canada

“The new tariffs will exempt oil and gas and certain national resources, as well as goods already covered under the United States-Mexico-Canada Agreement, or national security-related tariffs Mr. Trump has imposed on cars, steel and other goods.”

It is evident, however, that this Administration is determined to use tariffs, from wherever they may come, to construct the following:

“Testifying in Congress Wednesday, Mr. Greer said that the administration remained intent on imposing tariffs, regardless of the legal approach.”

““The specific authorities this administration is using have changed, but the trade strategy has not,” Mr. Greer said. “We are committed to continuing to use tariffs and to negotiate deals to support the re-industrialization of our economy, protect American workers and increase their wages and shrink our trade deficit.””

Like our friend, the ‘King of the North’, Trump and Burnham wish for industrial rejuvenation. However , no matter how these leaders may long for, and try to secure greater and sustained manufacturing growth, it is unlikely to return. Meanwhile, many will suffer including most consumers from the UK and the US chasing after a world that has, I’m afraid, long departed.

Photo by Samuele Giglio under the Unsplash License

So, an opportunity to meet up with some family in London. What could be nicer! Back in a week or two.

Photo by Marek Studzinski on unsplash.jpg

This week we’ve been watching Trump diplomacy – both with respect to the ‘conclusion’ of the US-Iran war and with Trump’s actions towards his allies at the recent NATO Summit. Both leave me aghast at some of his statements and also some of the actions of the President, even though you’d think I’d become inured to Trump’s diplomatic behavior 2 years into his second term. But I’m afraid I am still bewildered by both his statements and his actions – I mean he is President of the United States after all.

Let’s look at these two potential negotiating spaces - Iran on the one hand and the meeting of the Heads of State and Government at the NATO Summit in Ankara Turkey. First the conflict. Here we are looking at several days of kinetic action by both sides, Iran and the United States though the two supposedly are in a period of negotiation to end the conflict under a mutually agreed MOU. It certainly doesn’t look much like a negotiation and the threat to traffic in the Strait of Hormuz has if anything risen recently. As Ed Luce describes it in his recent article in the FT:

““Iran has never won a war and never lost a negotiation,” tweeted Donald Trump in 2020. “

“Now it seems like Trump has forgotten his aphorism. Six years later, Iran has survived the recent war with America and holds the whip hand over talks. In reality, nothing substantive has been discussed between US and Iranian negotiators since Trump unveiled his 14-point MoU last month in the Palace of Versailles. Dubbed by others “the memorandum of misunderstanding”, the piece of paper is a list of inducements for Iran to reopen the Strait of Hormuz.”

“None of the points were binding. Iran did not agree to give up control of the waterway. It simply pledged a resumption of prewar traffic and a return to nuclear talks. In exchange, it would eventually get hundreds of billions of dollars via unfrozen assets, lifted sanctions and future investments. This was not a deal. To paraphrase Tacitus, Trump baked a dessert for Iran and called it a memorandum. The problem is that Iran has all the initiative.”

“Now, apparently, we are back to square one. Earlier this week, Iran attacked three tankers in Omani waters — one Qatari, two Saudi — and Trump responded with air strikes on Iran. In turn, Iran said it attacked 85 US military targets in the region.”

Now Trump says talks can still continue, though he doesn’t seem to believe success is possible but how do you proceed after Trump’s open distain for Iran leaders:

“Three weeks ago, Trump said he was dealing with “strong, smart people” in Iran who were not radicals and were ready to hold good faith talks. One hugely attended ayatollah’s funeral and several ceasefire violations later, Trump now describes Iran’s leaders as “scum”, “sick”, and “vicious, violent people”. Talk about mood swings.”

David Sanger in the NYTimes underlines the rather unpalatable actions available to this President in an article titled, “As Iran Cease-Fire Frays, Trump Faces a Muddled War and Unpalatable Options”:

“At the NATO summit in Ankara, Turkey, on Wednesday after the two sides had exchanged strikes, he threatened major new combat operations. Those included seizing a key Iranian oil processing island and attacking the country’s infrastructure and desalination plants, which experts have said could constitute a war crime. (Mr. Trump did say he was most hesitant to hit the desalination facilities.)”

“The president could instead reimpose the American blockade of Iranian ports, an attempt to cut off the country’s economic lifeline. But that would require a continued, intense American presence in the region, and while Mr. Trump contended in April that it would lead to Iranian economic collapse, his earlier imposition of it did not.”

“Or he could elect to live in a world of neither war nor peace, an era of episodic skirmishes in the Persian Gulf, punctuated by periodic negotiations, with traffic through the Strait of Hormuz, a key oil-shipping route, greatly reduced from the 130 or so ships that passed through each day before the war. The energy markets would most likely adjust; to some degree they already have.”

But as Richard Fontaine, describes and, quoted by David, suggests:

““The problem is that all the options — endure, escalate or agree — are unattractive in different ways,” Richard Fontaine, the chief executive of the Center for a New American Security and a former aide to Senator John McCain, said on Wednesday. “The likeliest outcome is a continuing series of low-level, tit-for-tat attacks, followed by frantic diplomacy by mediators, the emergence of a new and fragile cease-fire, and then probably another round of strikes.”

“Mr. Fontaine added: “It will be a long oscillation between cold war and low-level hot war.””

As you can tell, notwithstanding the livid Trump threats, the opponent is seemingly undeterred by the President. As Luce, and indeed others, are suggesting that when it now comes to Trump diplomacy:

“But having vowed Armageddon on many occasions in the last four and a half months, Trump’s threats are subject to the laws of diminishing returns. Each time he vows hellfire, his bluster sounds a bit more hollow.”

“To a country that has been so intensively bombed, the spectre of more bouncing rubble is not concentrating Iranian minds. Indeed, at his press conference at the end of the Nato summit in Ankara, Trump seemed to have half-talked himself out of his earlier threats. Negotiators could continue to talk if they wanted, he said resignedly. He doubted they would get anywhere.”

It is certainly not a given but I think there is a growing sense that Trump’s dire threats but his then turns away from such ‘hard’ threatened action undermines Trump’s threats. And if you can call it that, his diplomacy. Ian Bremmer along with his colleague, Firas Maksad describes the repositioning of Middle East partners, for example, in an FP piece:

“For many Middle Eastern states, the problem with the war’s resolution is not only that the United States was unable to achieve a decisive victory against Iran but also that throughout the conflict, it was erratic and unpredictable. This has damaged confidence in Washington’s ability to maintain its role as the sole guarantor of stability in the Middle East. As Washington’s credibility erodes, U.S. partners in the region have resorted to forming new coalitions that afford them greater agency.”

This separating from Trump diplomatic actions is underscored with the analysis provided by my colleague, Dan Drezner in a recent Substack Post in Drezner’s World concerning Trump’s behavior at the Ankara Summit with Trump’s NATO allies.

“Krugman argues that it is due to a shift in perceptions about American power: “Europe’s turn away from Trump also reflects plummeting perceptions of his power. At one time the world feared Trump although it never respected him. The silence that met his renewed demand for Greenland shows that the world no longer takes him seriously…. while Trump is able to run roughshod over Americans, he can no longer bully the rest of the world. Thanks to Trump, the U.S. has seen its global influence plunge.””

In fact the NATO Summit turned out to be less dramatic that some had feared going in, probably not least NATO’s Secretary General Mark Rutte. In fact in the same Substack Post. from Dan, “The Crazy Uncle Trump Effect” the all-in considered ‘positive’ outcome of the NATO Summit was described:

“It’s true that this week Trump has lusted over Greenland, bashed NATO allies for not assisting with Iran, and threatened to cut off all trade with Spain — and yet the summit ended up going better than expected. At
least that was my takeaway from Politico’s Paul McLeary, Victory Jack, and Dasha Burns about what happened in the private portions of the summit:”

“Indeed, Trump’s rhetorical and material support to
Ukraine likely mattered more to European members of NATO than his vituperative
remarks the day before.

So progress was made on several fronts. NATO 3.0, that is NATO Europeanized, made progress and serious defense commitments were had. The willingness, to license Patriot defense production is a major commitment to Ukraine by the US. And this was all accomplished while keeping Trump in the room and seemingly relatively content, probably in part due to efforts by Turkey’s President, Recep Tayyip Erdoğan whom Trump seems to like.

Steve Erlanger of the NYTimes even suggested that in fact there had been two Summits. As he described it:

“The two-day meeting of NATO leaders in Ankara, Turkey, which ended on Wednesday, was a tale of two summits.”

“The first belonged to President Trump, who dominated the news cycle with a steady stream of complaints, grievances and insults aimed at his NATO colleagues, with his unpredictable changes of tone and mood, and with his decision during the meeting to unleash new airstrikes against Iran.”

“But the second summit belonged to the alliance itself, as it worked to show its commitments to more military spending, more trans-Atlantic industrial cooperation and continued support of Ukraine in its war with Russia.”

“That summit was marked by a kind of quiet, steady progress toward a new kind of NATO, the one Mr. Trump says he wants, where Europeans would take primary responsibility for the conventional defense of the continent, letting Washington concentrate its resources on the threat of a rising China.”

European NATO progress will take time and it will, one suspects, not occur without much ill-considered Trump behavior; but it will be progress nevertheless:

“But what is most striking is the divergence between the messages of Mr. Rutte and those of Mr. Trump, said Torrey Taussig, a former official on the National Security Council and a senior fellow at the Atlantic Council. Allies are stepping up with more money and production and support for Ukraine, she said. “But the U.S. and Trump are in their own show,” she said, “with the president showing up to rant at allies.””

“Mr. Trump “has won the argument that Europe has to step up and spend more, and that’s a huge achievement,” she said. “But they can’t land the win, which is to lead the alliance and stay politically engaged and give Europe the consistency and stability it needs to plan. Instead we’re not getting that, we’re getting the Trump show.””

“In the end, she said, “the Americans are shouting in the wind here and the Europeans are moving on.””

““But that doesn’t change the reality that NATO is undergoing and will need to undergo a transformation, and it will come out in a way that rebalances U.S. and European contributions,” he said. “Ideally, we’ll look at a weaker, transformed NATO, but one that is good enough.””

So progress is occurring notwithstanding the ill-considered Trump threats. As is noted above, progress with NATO allies is upon us. We will have to see now if progress with Iran is also possible. It will require I anticipate quiet but strong behind the scene words from US Arab allies. The Trump ‘huffing and puffing’ will no doubt continue in the meantime. But that is Trump foreign policy.

Photo by Valeria Nikitina at Unsplash

USMCA

Given we just passed July 1^st, Canada Day, it makes sense to start out with USMCA. And, yes, not surprisingly, the three North American countries failed to renew the trade agreement. Which, as pointed out by Tonda MacCharles at the Toronto Star means the Agreement will continue until 2036 with annual renewals, unless otherwise terminated:

“The decision at the behest of the U.S. was confirmed during a virtual meeting between U.S. Trade Representative Jamieson Greer, Canada-U.S. Trade Minister Dominic LeBlanc and chief negotiator Janice Charette, and Mexico’s Secretary of the Economy Marcelo Ebrard, thousands of kilometres apart.”

“Greer’s office announced the outcome in a statement, saying the U.S. “did not agree to renew the USMCA in its current form. As a result, the USMCA is not renewed. The United States will continue to engage with Mexico and Canada to address the Agreement’s shortcomings and our trade deficits with these countries. However, the Agreement remains in force pending resolution of these issues or until the Agreement’s termination.””

So here we are at the possible renewal date with the Trump administration, and the President himself making clear – notwithstanding he took the lead in concluding the trilateral agreement – that he’d prefer not to have it, as described again by MacCharles back in June:

“U.S. President Donald Trump said Wednesday that he would prefer it if the Canada-United States-Mexico Agreement on trade “expired immediately,” although he left open the possibility that he could sign a new deal, but would still rather leave it “unsigned.””

““I’d rather have it terminated,” Trump told reporters on the tarmac at Paris Orly Airport, where he arrived after leaving the G7 summit before a dinner hosted by President Emmanuel Macron.” …

“To me, I think it’s better without it,” he said. “I mean, to be honest with you, I’m not a big fan of it.””

So where do the negotiators go from here. Here are comments, as revealed by MacCharles, from Canadian and Mexican officials

“Afterwards, LeBlanc [Canada’s Trade Minister] said in a statement he had
reaffirmed Canada’s “unwavering support for the CUSMA and its renewal” and
noted that the deal remains fully in force until 2036 “and can be renewed at
any time for another 16-year period.””

“Mexico’s Ebrard [Secretary of the Economy] underscored the same. “If (Trump) wanted to leave, the United States would have done it by now,” he said.”

“In the immediate term, the decision to enter a period of annual reviews changes little. But it will contribute to ongoing investment and business uncertainty.”

““The Americans have made it official,” said Brian Clow, a former top Canada-U.S. adviser to the Trudeau government. “They want more concessions from Canada and Mexico, and they want the trade uncertainty to continue before they’ll consider extending the agreement.”

So, the negotiations will go on with the three countries, with heightened uncertainty, and it would appear that such negotiations will at least for now go forward bilaterally among all three Parties. I have no doubt there will be loud noises from President Trump but I also have the suspicion that these negotiations will in the end outlast this President and perhaps the next administration will then have the sense to conclude negotiations among the North American countries.

A Look at NATO

Now a quick turn to NATO. The next NATO gathering is in Ankara Turkey on July 7-8^th, this at the level of Heads of State and Government. Once again Trump has made clear his distaste for this alliance. As pointed out by The Economist back in May:

“Mr. Trump has been casting doubt on his commitment to NATO and its Article 5 mutual-defence clause since the start
of his second term. That has prompted a long-overdue increase in European
defence spending. Yet in recent months he has gone further, announcing unexpected
troop reductions and cancelling the deployment to Germany of a cruise-missile
unit that was to plug an important gap in Europe’s defence.”

“The rapid drawdown has upended Europeans’ assumption that they would have time to build up their own forces and replace vital American “enablers”, such as intelligence and surveillance assets.”

“Some European armed forces are making secret plans to fight not just without America’s help, but without much of NATO’s command-and-control infrastructure. “The Greenland crisis was a wake-up call,” says a Swedish defence official. “We realised we need a Plan B.””

“The question cuts to the core of the alliance’s success. Most military coalitions look like a primary-school music practice: each country turns up, bangs its drum roughly in time with the others, and leaves. NATO, by contrast, was set up as a symphony orchestra controlled by a single conductor, the Supreme Allied Commander Europe (SACEUR), an American general who also commands America’s forces in Europe.”

“Thus a Plan B requires more than acquiring weapons; it means creating a structure under which Europeans would fight. The core, at least in northern Europe, would probably be a coalition of Baltic and Nordic countries, plus Poland.”

So is it all ‘gloom and doom’ over NATOs future. Well, not exactly. Stephen Walt, my colleague at Harvard, back in February in the FP made clear that the Europeans would need to step up and take over coordination:

“Lastly, as I noted above, the United States’ NATO allies do face a collective action problem, and getting them to pull together to increase their weight within the alliance is not an easy task. But in the present era, it is the job of the secretary-general to make the alliance more effective by working 24/7 to overcome those obstacles instead of reinforcing them.”

“Things are radically different now. The Trump regime has precisely zero commitment to so-called liberal values, engages in predatory behavior toward allies and adversaries alike, and cannot be trusted to keep any agreements or pledges that it might make.”

“In this emerging multipolar world, Europe no longer enjoys pride of place, and it will be forced to chart its own course. That need not lead to a full trans-Atlantic rupture, but it does suggest the need for a major rebalancing. Trying to preserve NATO’s old formula of U.S. dominance and European submission is an increasingly bad bet.”

“The safest course would be a new division of labor within NATO, where its other members build up their own defense capabilities as rapidly as possible and the United Staters gradually becomes
their ally of last resort but not Europe’s “first responder.” That won’t happen
overnight, but a more unified and capable Europe would find itself getting more
respect and attention from Washington (which might begin to realize that
preserving these ties were in the United States’ own self-interest) and would
be better prepared should the United States continue its efforts to alienate as
many former friends as possible.”

The Walt view has been more recently underscored by Alexandra de Hoop Scheffer, the current President of the German Marshall Fund of the United States and a former adviser to the French government, in another FP piece, this titled: “Trans-Atlanticism Isn’t Dead—It’s Being Renegotiated”:

“The obituaries for trans-Atlanticism are being written too soon. The Trump administration has indeed profoundly shaken the U.S.-European relationship. But Nathalie Tocci’s recent essay in Foreign Policy, which posits that trans-Atlanticism as a living, operative force
is over, mistakes a needed transformation for a terminal diagnosis.”

“The evidence points not to the end of the trans-Atlantic alliance but to the emergence of a more demanding and ultimately more durable partnership that signals Europe’s long-delayed emergence as a geopolitically mature entity.”

So, we will need to look forward to growing European coordination and leadership of the alliance if NATO or its European successor is to emerge as a credible defense alliance for Europe. Will there be doubts, undoubtedly, but there is a path forward assuming the Europeans ‘suck it up’ and move forward collectively.

Now I was going to go on to describe the growing insecurity in nuclear balances as a result of technological change and significant modernization of nuclear forces by the Great Powers. It is a very serious debate and requiring important strategic policy action.

But I think I will hold off for the moment to allow us all a hot but well deserved break. Be back soon.

Photo by Maxim Klimashin on Unsplash

My good colleague Danny Bradlow from ‘Tukes’, the University of Pretoria in South Africa put it starkly this week in The Conversation - but I suspect pretty much ‘dead on’:

“The international legal order that was created after the second world war is no longer fit for purpose.”

“Its key institutions like the United Nations are incapable of restoring peace in Ukraine, Iran, Sudan or the Democratic Republic of Congo or stopping genocides in places like Myanmar or Palestine.”

“These developments lead many people to conclude that international law is merely nice-sounding words that hide a more cynical truth: the only effective international legal rule is (and has always been) that “the strong do what they can and the weak suffer what they must”, as the ancient Greek historian Thucydides put it.”

Now, interestingly, Zaki Laidi has tried to put this current disorder into some understandable frame. Zaki published not long ago a very good book with my close colleague, Yves Tiberghien, The Hedgers: How The Global South Navigates the Sino-American Competition. Now, in a recent article in Project Syndicate, titled, “The Myth of Global Chaos”, he tackles the current state of the global order:

“Today’s seemingly nonstop international tumult is not as unintelligible as it seems. What pundits lazily describe as chaos is the culmination of developments that were long in the making and arrived at a time when the international system was no longer able to prevent or mitigate geopolitical shocks.”

“The shambolic diplomacy between US President Donald Trump’s administration and Iran provides further evidence that world affairs have become unintelligible. But take a step back and you will see that all of today’s major conflicts are of a piece, and that despite the apparent entropy, a powerful logic of adaptation and resilience is at work.”

And then Zaki examines the outstanding serious conflicts.

“The four biggest flash points today stem from historical processes that made them largely predictable. The ferocity of Russia’s invasion of Ukraine may have shocked the world, but the war itself followed from the Kremlin’s well-known resentments and insecurities. President Vladimir Putin had long made clear that he abhorred the idea of Ukrainian independence or strategic alignment with the West. As former US National Security Adviser Zbigniew Brzezinski warned in the
1990s, “Without Ukraine, Russia ceases to be an empire.””

“There is no need for chaos theory or psychoanalysis. The war is simply the result of a Russian determination not to accept its status as a post-imperial power.”

He takes the same lens turning to the current conflicts in the Middle East:

“The same applies to the Middle East, where both the Israeli-Palestinian conflict and the US/Israeli-Iranian war have had grave consequences. What is most striking, yet again, is not their irrationality, but their persistence. It has long been obvious that only a compromise, trading some territory for the prospect of lasting peace can settle the dispute over the Holy Land. Yet we have moved further than ever from that outcome. The conflict has grown only more violent and terrible; but that does not make it irrational or unintelligible.”

And so too also the Iran conflict:

“Like our previous examples, the war with Iran has roots in events that happened decades ago, namely the 1979 revolution. The Islamic Republic was established in open opposition to the West, which bears its own share of responsibility for how things have evolved. The basic contours of the conflict have not changed: Iran wants to assert its hegemony in the region at the expense of Israel, the US, and the Gulf states, which in turn want to clip its wings.”

His conclusion:

“All of these cases show that what pundits lazily describe as chaos is the culmination of developments that were long in the making and arrived at a time when the international system was no longer able to prevent or mitigate geopolitical shocks. We no longer have the institutional stabilizers that we once did, and Trump bears much of the blame for that.”

“Faced with so many high-stakes conflicts and disruptions, it is not surprising that many are declaring the international system dead. But the reality is more nuanced. Despite the uncertainty incited by Trump’s import tariffs, for example, world trade continues to grow, and supply and value chains
are simply reconfiguring, not collapsing.”

Yes, the global order, frayed as it is, remains. But it is frayed, very frayed. And we need action to reestablish order. But where and how? Certainly not the current multilateral institutions. This diminishment of the multilateral institutions designed to carry out peace and security is all too apparent. One gets a sense of this fading by following the current election for the Secretary General of the UN. It is described in part by Stephanie Fillion, editor-in-chief of Envoy, a magazine focused on the United Nations, diplomacy and global affairs. In a piece in The Interpreter from Australia’s Lowy Institute she writes:

“With the Security Council expected in July to begin closed-door deliberations, including informal straw polls, the contest in New York City so far appears to be defined by a longtime leading candidate in International Atomic Energy Agency chief Rafael Grossi and the expectation of surprise, last-minute contenders.”

“Guterres’ successor must manage an institution battered by the reality of several bitter wars, mistrusted by major powers and under pressure to shrink. The question is not only who wants the job, but who can still make the job matter.”

But before taking on the task, the divided permanent five powers of the Security Council – China, France, Russia, the United Kingdom and the United States – must agree which candidate embodies their drastically different views of the future of the institution. While many people believe it will be harder than ever, others think that the P5 will unite around preserving that very privilege. The process itself exposes the contradiction of the UN: it needs a bold leader, but the P5 may prefer a controllable one.”

“When the UN General Assembly held its interactive dialogues with candidates in April, several diplomats shared their disappointment by how few people were running for the job. At the time, four candidates presented their vision to the world body: Argentina’s Grossi, Costa Rica’s Rebeca Grynspan, Chile’s Michelle Bachelet, and Senegal’s Macky Sall. In 2016, 13 candidates ran
for the job.””

“Experts saw people’s reluctance to run as a reflection of how difficult the job has become.”

Difficult, well probably closer to impossible where the institution has been vetoed out of almost every current conflict by one or other member of the P5. So, the leading and major powers have done a very good job in hobbling the international order and its multilateral initiatives, undermining efforts to resolve conflicts.

It strikes me that this critical arena of ‘peace and security’ is an arena for Middle Power collective action. It is, of course, a ‘tall order’. No kidding. But nothing is more critical. There is a real need to be ‘bold’ leaders determined to be institutional stabilizers. And a ‘coalition of the willing’ of Middle Powers can start by calling out these depressing actions by the great powers.

Photo by Will Goodman on Unsplash

It was rather ‘head spinning’ week but a certain logic emerged from Trump’s actions in Geneva and Evian-les-Bains, the site of the French G7, not to mention the continuing stream of thoughts from President Trump with respect to USMCA and the approaching July 1st announcement.

Let me go there, to USMCA, first before I follow up on the leaders statements and views at the G7 French Summit.

We saw, recently, Trump’s distaste for the USMCA renewal. And the distaste continued and even strengthened. By this past Wednesday his aversion to renewal became even louder than earlier. As described by Tonda MacCharles in the Toronto Star, Trump made his apparent dislike even more clear:

“U.S. President Donald Trump said Wednesday that he would prefer it if the Canada-United States-Mexico Agreement on trade “expired immediately,” although he left open the possibility that he could sign a new deal, but would still rather leave it “unsigned.””

““I’d rather have it terminated,” Trump told reporters on the tarmac at Paris Orly Airport, where he arrived after leaving the G7 summit before a dinner hosted by President Emmanuel Macron.”

It would seem if all three leaders fail to adopt renewal, then it would seem that the three partners would undertake an annual review in followup years, though Trump has expressed some scepticism over this:

“If the three signatories don’t declare an intention to renew the deal for another 16 years, a period of annual reviews would kick in, during which the pact would remain in force for another decade — unless any party gives the required six months’ notice to withdraw.”

“Trump said that’s clearly his preferred option at this time.”

“To me, I think it’s better without it,” he said. “I mean, to be honest with you, I’m not a big fan of it.””

“Asked by reporters to clarify what he meant by terminating the agreement, and if he meant allowing it to roll over into an annual process, Trump said, “I would rather not have the agreement, but I may sign it. But we do better as a country if we don’t have an agreement.”

““Yeah, I’m thinking about maybe we won’t be able to make a deal. I would rather not have the USMCA.””

So what is Trump’s view of the trilateral agreement and its pending renewal? There is certainly a strong view, at least from the Canadian side that Trump’s expressed open dislike for the agreement is a part of his negotiating approach: pushing the negative and receiving more from the other side determined to reach some accommodation with the US and Trump. MacCharles references former and current Canadian negotiators expressing such a view:

“Former Alberta premier Jason Kenney shrugged off the comments, saying in an interview that Canadians “know how not to get too agitated” by Trump’s “improvised comments” to reporters.”

““I think there’s two parallel things happening. I think that Dominic LeBlanc [Minister of Internal Trade] and (chief trade negotiator) Janice Charette are having productive conversations with Jamieson Greer and his team on a conventional way to address U.S. concerns and Canadian concerns, and they’re trying to do that contained way,” Kenney said.”

““And then the other track is the Trump theatre track, where he just floods the zone and destabilizes his counter party with all that stuff.””

My sense is that Trump actually holds both views of the negotiations: which position wins out with him, well that depends on circumstances and what those around him from the other negotiating side especially are saying. It is a ‘crapshoot’ not a strategy.

And now let’s take a look at the French G7 and its conclusion. There was a fair degree of trepidation expressed over Trump’s likely statements and actions at the French G7. Trump has left early from several recent G7 gatherings.

There is no question that there was a fair degree of ‘fawning’ by various leaders including the host President Macron, who threw in a dinner at Versailles following the G7 conclusion to keep Trump in the loop. As described by WPR’s Judah Grunstein in a piece titled, “The G7 Summit Is a Damning Failure of Global Leadership”:

“The summit communiqué hailed Trump’s “strong leadership” in achieving what it characterized as the “breakthrough” interim deal ending the war against Iran. The G7 European leaders also seemed heartened by the communiqué’s inclusion of a statement of support for Kyiv. And Trump himself signaled a renewed commitment to seeking to resolve the war in Ukraine now that Iran was “in the rearview mirror,” only to make it clear in the same breath that he does not consider the conflict to be America’s problem.”

“The pageantry of self-humiliation also reveals a failure at the highest levels of global leadership to face up to the reality that everyone can see so clearly: Trump is erratic and unreliable, as is America under his leadership. But because he can no longer be considered an open parenthesis in American politics that will close when he is gone, that broader unreliability extends beyond his time in office.”

The conclusion of the G7 was described in NYTimes by Mark Landler this way:

“Gathering in a sun-drenched spa town on the sparkling waters of Lake Geneva, the leaders of the Group of 7 put aside months of rancor to praise President Trump for his preliminary deal with Iran. They declared it a “breakthrough” that would unclog the Strait of Hormuz and could put the Middle East on a path to peace. And they got the United States to sign a remarkably unified joint statement on Ukraine, pledging “unwavering support” for Kyiv in its war against Moscow.”

“Then, on Wednesday, hours before the leaders were scheduled to disperse, Mr. Trump threw a few rocks in the water. The president warned that if he was dissatisfied with the final Iran deal, he could rip it up and restart the bombardment of the country. If the Iranians did not behave properly, he said, “we’ll go right back to dropping bombs right smack in the middle of their head.””

“Mr. Trump’s inflammatory statements left the rest of the leaders scrambling to catch up. His outburst over Iran sowed fresh doubts about the deal’s durability, even as Mr. Trump continued to insist it was very strong. And it punctured any illusions — such as those that still exist about Mr. Trump — that European leaders could corral the president with a mixture of pomp, charm and gifts.”

So, where did the G7 leaders land? Well, looking at the G7 declaration, it is clear that G7 leaders were able to turn all minds to what most of the G7 leadership sees as critical – Ukraine:

““We, the Leaders of the G7, stand united in our unwavering support for Ukraine in defending its freedom, sovereignty, and territorial integrity. We reaffirm our solidarity with the Ukrainian population suffering from attacks on their critical infrastructure and cultural heritage. We commend Ukraine for its resilience and progress on the battlefield in recent months and emphasise there is now a new momentum.”

“To support and accelerate this new momentum, we agree to increase the delivery of air defence capacities, additional systems and interceptors, and long-range capabilities. We are also ready to consider extending to Ukraine the benefit of licenses to allow for an increase in Ukraine’s military production.”

“We commit to increase the pressure on the Russian war economy. In this context, we will strengthen our sanctions on the oil and gas sectors. We consider this the right moment to proceed with additional measures, as President Trump has delivered a deal that we support in reopening the Strait of Hormuz.”

The apparent turn to Ukraine and Russia’s continuing deadly efforts is critical. The war has gone on far too long – longer than World War I and Trump’s almost disgraceful discussions with Putin need to be put in the rearview mirror. The Iran deal – as bad as it is, and it is, if it limits conflict now, opens the Strait, and pressures Iran to hold in abeyance its nuclear efforts for the time being, well that will have to do – at least while Trump drives US efforts.

Photo of Ambassador Bridge by N Band on Unsplash

So we are approaching a declaration by the 3 North American governments - Canada, Mexico and the United States on the fate of US-Mexico-Canada Free Trade Agreement. Not totally surprisingly, President Trump has expressed his ‘distaste’ for the renewal. As described in the Toronto Star by Tonda MacCharles:

“Prime Minister Mark Carney publicly said little, but privately projected calm after U.S. President Donald Trump declared he is “not looking to renew” the Canada-U.S.-Mexico Agreement on free trade as the July 1 deadline looms for the three nations to recommit to the deal.”…

“Trump’s latest offhanded diss of the cross-border trade deal came when a reporter in the Oval Office asked the president how confident he is the free trade pact would be renewed by July 1, and what more Canada could do.

“Well, I’m not looking to renew it,” the president flatly replied.”

““I don’t know that I’m going to renew it, because to be honest with you, the United States does much better,” Trump said, adding: “We don’t need anything that Canada has, we don’t need anything that Mexico has, but they need everything that we have.”

“Trump then said the current CUSMA is “a great deal for one reason: it gave the right to terminate,” suggesting he could one day threaten a complete withdrawal from the deal. “I made it, but I had the right to terminate, and you know, with NAFTA, we didn’t have the right to terminate.””

Imagine, the best thing that President Trump has to say about the trade agreement – which of course he negotiated – is that he can terminate it.

As Michael Froman, the President of the Council on Foreign Relations (CFR) wrote recently:

“Last September, Carney and Mexican President Claudia Sheinbaum announced their own bilateral Comprehensive Strategic Partnership, an attempt to hedge against an unreliable Washington and present a united front in advance of the mandatory joint review. The stage is now set for a fraught renegotiation.”

As US Ambassador to Canada, Pete Hoekstra reminded Canadians there are several outcomes possible from the possible renewal as described by him and reported in The Globe & Mail:

“The three countries have the option to renew the deal for 16 years. If that doesn’t happen, the treaty will remain in place but move into a period of annual reviews for 10 years. Any of the countries can also withdraw from the deal with six months notice.”

The Ambassador’s view for Canada and Canadians for advancing this USMCA negotiation:

“You maybe don’t like the way the President says it, but … what he’s saying is we’re open to offers. Make your case,” Mr. Hoekstra said.

“Mr. Hoekstra said the Trump administration knows it needs things from international partners, even as it looks to reshore key industries and build up U.S. manufacturing. Canada, he said, can be the preferred partner across a range of industries if it can make the argument to Washington.”

““I think Canada should optimistically look at this, and with all of the resources that you have, and the capabilities that you have, and the talent that you have, go into these negotiations very aggressively and say, ‘We know America has needs across the board, and we’re here to partner with America and fill those needs because we are the best place for America to fill these needs,’” Mr. Hoekstra said.”

It seems apparent that Trump and his administration have concerns over resolving trade problems with Canada. Again as Michael Froman describes it:

“Second, the USMCA negotiations reveal how serious the fissures are between the United States and Canada. When the USMCA was concluded more than six years ago, negotiations with Mexico were the more challenging ones. Now, Canada is the pain point.”

“Then, Deputy U.S. Trade Representative Rick Switzer said at a CFR event, “We have issues with Mexico we’re still working through, but Mexico intends on coming to an agreement with us.” He added, “The grown-ups are in the room talking because there’s a grown-up in leadership there. And I would argue there’s not a grown-up in Canada in charge.”

Ouch. That hurts for sure.

“There are still a number of authorities—including Sections 301, 232, 201, and 338—Congress has provided the president to impose tariffs in response to significant trade issues or bona fide national security ones. But USMCA is consequential for Canada and Mexico and, therefore, the review is a unique source of negotiating leverage.”

That being said, and notwithstanding all the low level invective being expressed by US officials, I suspect the framing of this negotiation - expressed by a former Canadian trade official - probably remains the most likely view of the state of the negotiation between the Carney government and the Trump administration, as quoted by MacCharles at the Toronto Star:

“Brian Clow, a senior Canada-U.S. adviser to former prime minister Justin Trudeau throughout Trump’s first term, said, “It’s completely predictable and expected to hear this from the president.” Trump, Clow said, regards himself as “a master negotiator (and) is going to keep the pressure on.””

“Clow, who is now a private-sector trade consultant, suggested the risk that the U.S. would pull out of the trade deal altogether is “very low.” He said “the Canadians should stay calm, just keep their head down and just keep talking.””

And, finally, a view from Lana Payne, the national president of Unifor that underscores the logic of Trump’s harsh perspective:

“Lana Payne, national president of Canada’s largest private-sector union, said in a statement to the Star she predicted last year “Canadians could expect more threats, posturing, and economic extortion from Donald Trump as the CUSMA review moves forward.”

““Trump’s objective is clear: attempt to squeeze more concessions out of Canada while taking aim at our industrial economy and the workers that drive our economy.””

And so, notwithstanding the negativity expressed by the President and some of his officials, the logic is for Canadian officials and negotiators to push on with some confidence that in the end a deal can be secured.

Finally, and underscoring the serious difficulties of negotiating with this President, and with even greater stakes at play, there is the current effort to end the conflict in the Middle East. As described in an ongoing saga of swinging rather wildly from military action to landing on the doorstep of conflict resolution here a description of Trump veering between negotiation and violent action, as described in the NYTimes by Max Bearak, Eric Schmitt, Anupreeta Das and Jonathan Swan, in “Iran War Live Updates”.

“After two days of pounding Iran with airstrikes, President Trump on Thursday morning promised to hit Iran hard again for a third day and mused about invading a strategic island. Then in the afternoon he abruptly called off the attacks, and claimed, once again, that a deal was close to being signed.

Iran’s leadership did not immediately confirm any progress in the talks. Earlier this week, Mr. Trump had claimed a peace deal was imminent, but hours later, the two countries attacked each other.”

Today, according to The Economist, the end is both here, and it is not:

“Mr. Trump is in a triple bind. Iran is garrotting the global energy supply by threatening tankers in the Strait of Hormuz. Israel is bombing Lebanon, despite Mr. Trump telling it not to. And hawks in America are pressing Mr. Trump to chase unrealistic war aims. Something must eventually give. But the mess that Mr. Trump created by starting the war could take longer to clear up than markets are expecting. The world must prepare for higher energy prices.” …

“The best Mr. Trump can hope for is a makeshift pact to reopen the strait in exchange for an extended ceasefire that may, with luck, become permanent. Economic sweeteners will be necessary. The threat of force will remain. Haggling over Iran’s nuclear programme will have to come later. Such a deal would be unstable, and humiliating for America.”

Trump seems to be able to break things, for sure, but improving relations, enhancing stability and the global order, not so much.

Getty Images Licensed under the Unsplash+ License

Just back from the 2026 version of the Global Solutions Summit. It was pleasure being with many GSS attendees and some close colleagues. And it is of course a pleasure to be in Berlin. Such a pleasant city.

As described by the Global Solutions Initiative (GSI) principals, this year’s GSS was designed to provide the following:

“Over two immersive days, the Summit brought together leaders, thinkers, and practitioners from government, business, academia, and civil society around one of the defining questions of our time: how do we find common ground in a fractured world?”

Now with the valuable work of my CWD Co-Chair, Colin Bradford, we found ourselves surrounded by colleagues and able to discuss the following in a pre-Conference gathering:

Sunday, May 31st - ‘Brainstorming the future new narratives for the common good’. We took up the following issues:

Foundational Pillar #1 – New Social Economic Policy

Foundational Policy #2 - Global Nuclear Weapons Ceiling to Release Massive Investment in Human Capital

Foundational Pillar # 3 – Review and Recommittal to the Principles of the Charter of the United Nations

Foundational Pillar #4 – Call for an Ecumenical Conference of Leaders of all Religious Faiths

This year’s GSS gave CWD a solid opportunity to discuss a new world order and the four pillars for global governance, with participants sharing their perspectives on the current state of international relations and equally importantly setting out possible future directions. We took the opportunity, where we could, to develop visions for a “new world order” in response to the current breakdown of trust-based international systems that have prevailed in some form since 1945.

On the first day of the Summit we attended, what organizers referred to as a Forum gathering where participants discussed:

Monday, G7/G20 Sherpas The G20 2.0: What Comes after the Reset: Identifying Pathways for Lasting Peace and Stability presented by:

· Brett Savill/Institute for Economics and Peace (Australia)

· Chris Coulter/Berghoff Foundation

· Min-Thu Pham/The Starling Group

· Sanam Naracchi Aderlini/Civil Society Action Network

This discussion was followed immediately by our own session. The GSS organizers were good enough to open a Monday slot, after some solid persuasion by Co-Chair Colin Bradford to discuss with those interested in the critical issues a ‘deep dive’ session where some 15 folk discussed and gave their views on the following CWD described session:

Monday – Deep Dive: “Brainstorming the Future: New Narratives for the Common Good”

The Shape of the Coming Global Order

Through the various sessions we discussed global order changes and economic challenges with participants often reflecting on the fading of the old international order and attempting to describe possible new frameworks even though these had not fully emerged. On reflection, I suppose it was unsurprising that there was no consensus on what the current shape of the global was, or what the order was moving towards.

There was one expressed view that suggested the current global order and its actions reflected in part the pre-World War I global structure. Others referenced rather the post-1945 order; and still others mentioned the post 1989 transition though suggesting a more negative transformation requiring both diagnostic insights and specific recommendations for policymakers. Still another of our colleagues proposed that the world order was in fact moving toward a multipolar system with possibly 5 to 6 major powers including: China, US, EU, and Russia. This multipolar order in his opinion would create a new balance of power that would prevent major wars through mutual deterrence and require cooperation among the major powers. While some acknowledged the emergence of such a multipower order they nevertheless were less sanguine that such a multipower system would be able to remain stable. Finally, some of our colleagues were unclear whether the global order that had emerged with the end of the Cold War had truly ended.

It remained difficult, therefore to determine what new framework might emerge and as a result there was a lively debate: over the role of major powers like the US and China in such a new order; what new economic framework would dominate; and, finally, the importance of cultural and spiritual dimensions in shaping public narratives about the future. There were suggestions that while a new world order might be ideal, political feasibility and action made this unlikely in the next 10 years. Moreover, though it was acknowledged that the continuing maintenance of classic multilateral institutions was predicted and likely to continue, the existing international organizations like the UN and WTO increasingly would find themselves as minor actors in this new emerging order.

In contrast to this earlier pessimistic multilateral presence a more hopeful view was also expressed arguing that the power distribution and the relative decline of the West did create unique challenges but these challenges would lead to new social economic policy focused on: infrastructure investment, people development, and fair taxation rather than military spending. New institutional forms might well emerge including various Middle Power coalitions and initiatives.

While there was no unanimity over the state of the global order or its immediate trajectory and future, the group dove into the possible paths forward and outlines of a possible new paradigm that could possibly integrate economics with society, polity, and environment. Such approaches would necessitate new narratives and policies to address this transformation. As expressed in our later meeting such narratives require many messages and also many messengers. The discussion included various perspectives from experts, including former government officials and academics, with a focus on how to mobilize public support for these changes.

Several strong perspectives emerged. One of our colleagues argued that three transformations were needed: goal alignment focused on human flourishing rather than just economic output; capacity alignment to address current challenges; and policy alignment that would enable policymakers to cross traditional silos. In this view, and if the path was followed one could see a “new alignment” based on coalition-based cooperation rather than universal agreement, focusing on four key principles: human flourishing through: solidarity, agency, material gain, and environmental regeneration. To achieve this possible progress countries needed to form coalitions around specific global challenges with clear guardrails for participation. And finally the view emerged that described the need for a fundamental shift in global economic and social narratives, emphasizing the importance of culture and faith: all drivers beyond traditional economics.

The meeting also had the opportunity to focus on nuclear arms control and deterrence in an emerging, if not already emerged tripolar nuclear environment involving the US, Russia, and China. The speaker, David Ellwood, a mathematician and Pugwash Council member argued that the challenge today is not just deterrence versus disarmament but critically stable deterrence versus qualitative escalation, particularly emphasizing the need ultimately for a US-China dialogue on nuclear issues. It was made clear in his analysis that significant economic costs were and would be further incurred by this US nuclear modernization (estimated currently at $1.5 trillion). In the face of growing destabilization there would be a need for a new approach to arms control that could address missile defense and counterforce capabilities, and there was a need to understand China’s evolving nuclear posture and traditional arms control concerns over its vulnerability resulting in part through a lack of transparency.

David went on to describe rather chillingly the potential climate impact of nuclear conflicts, explaining that even minor regional wars including nuclear exchange could create global environmental damage affecting billions through soot and reduced solar irradiance. The group discussed whether to integrate nuclear security issues into broader macro policy discussions, with participants debating the scale of the challenge and potential policy approaches including critically monitoring and notification enhancements. The conversation also covered broader strategic threats including: AI, drones, and nuclear proliferation concerns, with participants emphasizing the need for strategic restraint and common security approaches rather than great power competition.

The discussion then moved on with a focus on the importance of multilateral cooperation and international treaties in addressing existential threats not only through nuclear war but also climate change and loss of biodiversity. The participants emphasized, in this examination of Pillar 3, the need to update existing treaties to maintain treaty relevance and ensure compliance, particularly involving superpowers in the process. Many topics were raised over the state of multilateralism and multilateral institutions. But one conversation was particularly noteworthy - this an examination of the utility of the UN and the need, the longstanding need, for UN reform.

One of our colleagues has made a significant mark in urging reform of the UN and its ability to impact peace and security. This colleague, Huiyao Henry Wang, the President of CCG (Center for China and Globalization) has for some time proposed to integrate G20 into the UN Security Council to address the poor representation of the UN Security Council members and in part, to tackle the current veto system that has largely rendered the UN unable to address various serious ongoing conflicts. Henry expressed a strong view that reform is necessary to implement standards and recover the UN’s original mission of peace and security. As Henry has written recently:

“The central issue is not whether the UN still matters, but whether its most powerful organ, the Security Council, can adapt to a reality it was never designed to govern.”

“The Security Council was designed for a world shaped by World War II, reflecting the balance of power among the victors and the strategic assumptions of 1945. Its structure has remained static since 1965, with the five permanent members (P5) and ten rotating seats still resembling that pivotal moment after the defeat of the Axis Powers.”

“Accordingly, the pathway forward requires two intertwined reforms tackling its structural and procedural dimensions. Structurally, the Council must expand its membership to better reflect today’s distribution of global power and representation. Procedurally, it must establish a mechanism to curb unilateral use of the veto, ensuring that no single state can indefinitely block an emerging international consensus.”

“First, the Council needs to expand its membership to better reflect the world of today. Second, it should develop a mechanism to limit the use of unilateral vetoes to prevent a single P5 state from thwarting an international consensus. Together, these reforms can revitalize the Security Council’s credibility and capacity, transforming it from a forum of gridlock into a more responsive and effective guardian of peace.”

“To that end, all current G21 (formerly G20) members should be given a seat on an expanded Security Council. This would eliminate the 10 existing rotating seats and create 16 new permanent associate seats. These new states would not have an individual veto, but together with the other four permanent members, they could override the use of the unilateral veto.”

“Previous reform efforts have stumbled over the question of how to allocate new seats in the Council. Using the G21 thus offers an elegant solution. It is composed of an even mix of developed and developing countries. Using it as the basis for reform addresses some of the underrepresentation of the global south while still recognizing the enduring power of incumbent powers. Today, the G21 members account for over 85 percent of global GDP and have already helped coordinate multilateral responses to some of the world’s most pressing economic challenges.”

“To solve the problems created by the unilateral veto, we must weaken it by instituting a supermajority override. Under this proposal, if over two-thirds of the expanded Security Council—that is to say, 15 of its members—and two-thirds of the General Assembly voted to override the veto of a single P5 member, the resolution in question would pass.”

“A single P5 member should not be able to block a UNSC resolution passed by all other permanent members, two-thirds of the 16 permanent associate members, and two-thirds of the 193 members in the General Assembly.”

There were many insights expressed over the time of our discussions. One further topic of discussion that emerged - this with with Pillar 4, with the group focused on the role of faith in global dynamics and the Religious 20 (R20) initiative’s to ensure religion would become part of the solution to world problems. Participants discussed the importance of addressing religious factors alongside economic and security issues, with colleagues sharing insights about cultural diplomacy and an upcoming conference in Morocco on human dignity.

Finally, as we came to a close, one of our colleagues reflected again the new social economic policy efforts by introducing the concept of “local versus global optimization” in economic and security policies. He suggested that leaders often focus on short-term gains at the expense of long-term human security, and proposed creating a joint appeal from religious communities, economists, and security experts to reaffirm UN Charter principles.

The group also discussed how countries like Indonesia demonstrate high levels of human flourishing despite being middle-income, suggesting that community-focused institutional supports may be more important than economic wealth for human well-being.

CWD appeared to align on three tracks for moving forward: a diagnostic overview of global issues, a specific focus on failing global public goods, and priority actions with immediate opportunities like global financial stability. The group acknowledged, as we concluded, the need to move beyond theoretical discussions toward concrete action and agreed to continue with future meetings.

The discussions were intense but seemed to bear real fruit. As further concrete progress is made I shall return to the CWD efforts to advance the 4 Pillars.

The annual GSI Summit is upon us and in Berlin for June 1st and 2nd. A serious number of my colleagues from the Changing World Dialogue (CWD) will be joining the Summit and Colin Bradford and I, as Co-Chairs of CWD are holding several sessions pre the GSS Summit in Berlin.

The Sessions include:

#1 - A New Social Economic Policy Framework

#2 - Global Nuclear Weapons Ceiling to Release Massive Investments in Human Capital

#3 - Review and Recommittal to the Principles of the Charter of the United Nations

#4 - Call for an Ecumenical Conference of Leaders of All Religious Faiths

I shall report on these gatherings and what our sessions concluded as soon as I am back.

See you soon.

Photo by Mads Schmidt Rasmussen for Unsplash+

I am hoping ‘Bits and Pieces’ is appropriate for this US holiday weekend. As it turns out I decided to take look at the continuing Greenland tensions generated initially by President Trump. I had kinda thought this issue hopefully had quietly slipped away while this President expended significant though not necessarily successful efforts over: Venezuela, Iran and Cuba. But that does not appear to be the case.

While most of us were looking elsewhere - at least I was, discussions in fact have been ongoing over Greenland. Reporting recently on these discussions were Jeffrey Gettleman Maya Tekeli Anton Troianovski and Eric Schmitt from the NYTimes in a piece titled, “In Closed-Door Talks, U.S. Demands a Major Role in Greenland”. As they describe this has been what has been going on:

“But for the past four months, negotiators from the United States, Greenland and Denmark, which controls Greenland’s foreign affairs, have been holding confidential talks in Washington about Greenland’s future.”

“The talks were meant to give Mr. Trump an offramp to his threats of a military takeover of Greenland and to scale back a crisis that risked breaking apart the NATO alliance. But Greenlandic leaders are worried about what is being proposed, which is a much larger U.S. role on the Arctic island. And they fear that if the conflict with Iran winds down, the president will swing his aggression back on them.”

“An investigation by The New York Times, based on interviews with officials in Washington, Copenhagen and Greenland, has discovered:

• The United States is trying to modify a longstanding military arrangement to ensure American troops can stay in Greenland indefinitely, even if Greenland becomes independent. The notion is basically a forever clause, and Greenlanders do not like it.

• The United States has pushed the talks beyond military matters and wants effective veto power over any major investment deals in Greenland to box out competitors like Russia and China. Greenlanders and Danes strongly object to this.

• The United States is discussing cooperation with Greenland on natural resources. The island is loaded with oil, uranium, rare earths and other critical minerals, though much of it is buried deep beneath Greenland’s ice.

• The Pentagon is rapidly moving ahead on plans for a military expansion and recently sent a Marine Corps officer to Narsarsuaq, a town in southern Greenland, to inspect the World War II-era airport, the harbor and places where American troops could be housed.”

“The American demands are so steep, Greenlandic officials fear, that they amount to a major imposition on their sovereignty. Despite all of the talk from Danish and American officials that Greenland’s future is up to the island’s 57,000 people, Greenlandic officials said the American demands would tie their hands for generations.”

“If the Americans get everything they want, said Justus Hansen, a member of Greenland’s Parliament, there will never be any “real independence.””

So, where is the state of these talks? According to the above NYTimes folk:

“So the Greenlandic, Danish and American negotiators involved in the talks hope they can reach a deal that the mercurial president will accept, officials familiar with the discussions say. The accounts made clear that there was still some distance to go. The officials who spoke to The Times asked not to be identified because of the sensitivity of the continuing negotiations.”

“Greenlanders have been emphatic they do not want to be part of the United States, but Greenlandic politicians say they are OK with having more American soldiers on their soil. Thousands of American troops were stationed there during World War II and the Cold War, though the United States eventually shut down every base save one.”

“Vivian Motzfeldt, Greenland’s former foreign minister and another member of Parliament, said that if the wars in Iran and in Ukraine end, it could spell trouble for Greenland. She fears Mr. Trump would return to his obsession and Russia would also shift to the Arctic, long a strategic priority for Moscow.”

“She and other Greenlandic politicians were bracing for June 14, the president’s birthday, and the Fourth of July.”

““If he’s going to realize his policy of making the U.S. greater again,” she said, “he could use days like those.””

And as the FP Situation Report describes the current situation in the far north:

““We are still in a surreal situation and dialogue where the leading member of NATO threatened to invade and take over the biggest Arctic state, which is a part of the kingdom of Denmark,” said Thordis Gylfadottir, the former foreign minister of Iceland.”

“‘Completely absurd.’ Trump has said that the United States needs to control Greenland for national security purposes and to prevent Russia and China from taking it over. But a 1951 agreement already grants the U.S. considerable military access to Greenland. Though there’s no doubt that Russia and China both have major interests in expanding their influence in the Arctic—and Moscow already has a massive military presence in the region—there are plenty of reasons to be skeptical that they would attack Greenland and risk open war with NATO.”

So great. Bad things occur if conflicts continue in Iran and other hot spots and bad things occur if the conflict ends with Iran and others and Trump targets his friend and allies. Isn’t that just so sad - one needs to shake one’s head at the future prospects of conflict with you own allies.

Meanwhile, I can’t help mentioning before I leave the troubling, indeed very troubling US administration current unwillingness to confirm the increase in armaments destined for Taiwan. As pointed out at the FP Situational Report:

“Meanwhile, a prospective trip to China by Baker’s former boss, Undersecretary of Defense for Policy Elbridge Colby, has been held up by Beijing until Trump decides whether to approve a $14 billion arms sale to Taiwan, the Financial Times reported. According to the South China Morning Post, Colby’s visit was meant in part to set the stage for U.S. Defense Secretary Pete Hegseth—who accompanied Trump to Beijing last week—to make his own trip later this year.”

This is bad - really bad - and what one might expect where this administration has not been forthright in maintaining US policy toward Taiwan. We will definitely keep our eye on that situation.

Photo by Markus Winkler for Unsplash +

So many interpretations! First, the explanations of what to expect from this Summit between President Xi and President Trump were everywhere. And now the same for the presumed outcome and results. So, everywhere and nowhere. Particularly notable, and annoying in the midst of all this noise, is the recent reporting from folks like Tom Llamas who is anchor and managing editor of “NBC Nightly News”. You would think that there hasn’t been a US Presidential visit to China - ever! It is hard to take and the results, to the extent we can draw conclusions, well, far diminished from all this hype.

Now don’t get me wrong. I have a lot of respect for colleagues examining US and China foreign policy actions, US-China interactions and drawing out policy advances and setbacks. But the noise surrounding this trip by Trump to China and Trump-Xi foreign policy interactions and presumed results just raised the noise level without really being able to point the way forward for these great power leaders.

So in and amongst all the interpretations, I appreciated those colleagues that maintained some kind of restraint particularly in light of this President’s inability or unwillingness to undertake the serious hard work and planning pre-summit to enable a substantial result.

I appreciated the more restrained and cautious folk that reported on the gathering. One instance, not surprisingly, was the insights from David Sanger in his piece in NYTimes, “Trump Was Flattering, Xi Was Resolute. The Difference Spoke Volume”:

“Mr. Xi, unsurprisingly, spent little time Thursday on flattery. Once the 21-gun salute and precision-marching by units of the People’s Liberation Army were finished, the disciplined Chinese leader plunged right away into setting boundaries for the two country’s relations.”

“The red line was Taiwan, he said, making it abundantly clear that Mr. Trump’s effort at rapprochement could crash on takeoff if he interferes with China’s long-term effort to take control of the self-governing island.”

“The moment seemed to capture the new equilibrium between the two adversaries. Mr. Xi arrived highly scripted, leaving no doubt that for all of China’s problems — deflation, depopulation, the bursting of the real estate bubble — the moment when China acts as a peer superpower had arrived.”

In a follow up piece in the NYTimes, Sanger with a Beijing colleague Anton Troianovski wrote in “Trump’s ‘Learning Curve’ on China Ends With Conciliation at Summit”:

“As Air Force One took off from the Chinese capital on Friday, it remained unclear what deals, if any, President Trump had clinched with Mr. Xi. But the two-day summit in Beijing underscored how far he has shifted the foundations of American policy toward China in the wake of his humbling retreat from last year’s trade war. He has thrown aside the adversarial approach of his first years in office, the Biden administration and the beginning of his own second term.”

“What’s more, he has largely waved aside the warnings outlined in the Pentagon’s annual, unclassified accounting of China’s capabilities and intentions, which lays out a plan to push the United States out of the Western Pacific, engulf Taiwan, claim more territory in the South China Sea and escalate cyberattacks on the United States. He acknowledges that these threats are real. He has just reversed his view of how to deal with them.”

“And Mr. Trump insisted that Beijing and Washington were on the same page on Iran, even as the Chinese Foreign Ministry on Friday reiterated its position that his war “should not have happened in the first place.””

“Taken together, the picture of a deferential American president and a confident Chinese leader reflected Mr. Xi’s success, despite his country’s bleak economic picture, in derailing the hawkish approach to China that Mr. Trump adopted at the start of his second term.”

The two reporters and analysts put this conclusion on Trump’s reactions:

“John Delury, a historian of East Asia, said that even though the summit had produced few tangible outcomes in terms of economic deals or political agreements, it had the potential to affect the geopolitical mood, both in China and the United States. Mr. Trump’s friendly statements toward Mr. Xi and the Chinese people were being amplified in China’s state-controlled media, sending the message that “we’re getting along better with the Americans,” said Mr. Delury.”

“And in the United States, Mr. Trump was telling voters who previously heard him describe China as a sinister, destructive force that it was a country America should do business with. The Washington narrative about “decoupling” — the idea that the United States should unwind its economic ties to China — seemed part of a bygone era.”

““You don’t pack Air Force One with your biggest business leaders when you’re decoupling,” said Mr. Delury, a senior fellow at the Asia Society. “Trump is sending that message to his people — to some extent the whole country — that we can get along with China even though we’re still going to compete.””

And then:

“The summit produced little clarity about the policy details of the new relationship that Mr. Trump and Mr. Xi were shaping. Da Wei, the director of the Center for International Security and Strategy at Tsinghua University in Beijing, said the United States did not appear to have “put enough energy” into the visit.”

And then concluding this way:

“But analysts in both China and the United States said Mr. Trump’s attitude to Beijing was different now. For one thing, he has seen China’s ability to retaliate against the United States, as it did by throttling rare earth exports last year, forcing Mr. Trump to back down in his trade war.”

““Everyone has a learning curve,” said Sun Chenghao, a specialist in US-China relations at Tsinghua University. Now, he said, “Mr. Trump knows how to deal with China.””

Another constrained view came from Hannah Miao, a reporter for The Wall Street Journal based in Singapore, covering China’s economy and its ties with Asia and the world and Yoko Kubota. In a piece in WSJ she drew the following conclusion:

“The summit ended without any joint announcements on specific deals, or any broader communiqué covering trade or other matters, but both sides celebrated the visit as a reset in relations. China said the two sides agreed on a new vision of “strategic stability,” while Trump described the U.S.’s relationship with China as “a very strong one.””

“Trump touted “fantastic trade deals” struck at the summit, but so far, details have been scarce. The president said China agreed to buy 200 Boeing planes, as well as more American oil and agricultural products. China hasn’t yet announced any such purchases.”

“Xi told a delegation of American executives that China will open wider to foreign businesses. The White House said the two sides discussed expanding U.S. access to the Chinese market and Beijing’s investment in U.S. industries. Members of the Trump administration said in the run-up to the summit that the two sides would discuss the creation of a “board of trade” and a “board of investment.””

Underscoring the restraint and limit to this meeting - remember there may be as many as three more meetings before the end of the year - is the fact that before the Summit there was much talk of the creation of one or both of these boards but it appears that neither was agreed to yet.

It is evident that ‘Taiwan’ remains a serious issue dividing the two and with the potential for even greater tension or even conflict. It is evident that Xi made pointed reference to Taiwan as noted by John Haltiwanger and Rishi Iyengar in the FP - and indeed mentioned by most:

“Continued U.S. support for the island, which China claims, loomed large over the bilateral talks largely focused on trade, technology, and the Iran war. According to Beijing’s readout of the meeting, Xi told Trump that “the Taiwan question is the most important issue in China-U.S. relations,” adding that the notion of Taiwanese independence and peace between Taiwan and China “are as irreconcilable as fire and water.” Xi urged “extra caution” from the United States in its handling of Taiwan.”

So while it remains unclear that Xi spoke those remarks to Trump they were nevertheless underscored in written statements by China.

Oren Cass, a conservative commentator, reflected yet an additional note of constraint in the face of Trump style and approach to China. In an opinion piece in the FT he wrote:

“The result is a US ill-prepared to make decisions that will shape geopolitics and the global economy for the foreseeable future. That is always dangerous, but even more so when the other side excels in long-term planning and co-ordinated action.”

“The worst thing Trump could do under these circumstances is attempt a major deal, which cannot possibly deliver strategic benefit to a country that lacks a strategy. The best plausible result is simply no deal, beyond efforts to smooth any decoupling that might proceed, giving the US time to come to its own terms with the irreconcilable differences of its great-power competitor.”

There may be more announcements in the days to come. It is certainly possible. But restraint by both sides seems to overlay the conclusion of this first of possibly several summits between these two leaders. On the positive side, it may helpfully provide time for Trump and his people to organize their ‘asks’.

Getty Images: Licensed under the Unsplash+ License

The coming week is looking to be quite interesting when it comes to global relations. We expect to see the first of what might turn out to be several summits between US President Donald Trump and China’s leader, Xi Jinping. What can we expect? There is much speculation about this and we will try to sketch out the likeliest results but you never know when Donald Trump is in the spotlight.

But just before going there, I think it useful to take a quick look at the state of Trump tariffs. Why? Well, interestingly, there has been yet another blow to Trump’s favorite policy instrument, tariffs. As described by a former colleague, and well known international trade law lawyer, Barry Appleton, here is what went down as he describes it in his Substack:

“The Court of International Trade has struck down President Trump’s 10% global surcharge. The decision arrives in different rooms in different ways.”

“On May 7, 2026, by a 2-1 vote, the United States Court of International Trade struck down President Trump’s 10% global Section 122 tariff. The decision is technical, narrow, and divided. It runs eighty-eight pages and is published as Slip Op. 26-47.”

“The substantive holding is straightforward. Section 122 of the Trade Act of 1974 requires “balance-of-payments deficits” measured by the methods Congress understood in 1974, not by current-account or trade-deficit data. The President’s February 20 Proclamation pointed to the wrong concept and was therefore ultra vires.”

Now this end to his immediate Section 122 efforts, is on top of his previously failed effort to use the IEEPA - the International Emergency Economic Powers Act. Here, the US Supreme Court struck down Trump’s actions to impose tariffs using this IEEPA which forced him to pivot to Section 122 of the Trade Act of 1974. Now that this more recent Trump tariff approach also has been struck down, in this case by the United States Court of International Trade, is this it? Nope. These failed efforts don’t likely end Trump’s tariff moves. I expect that we will see several Section 301 ‘unfair trade practice’reports that will apply tariffs to specific trade items. But still the recent trade decisions have certainly thrown a wrench in Trump tariff initiatives and actions. And the Section 301 efforts are more targeted, not universal as displayed in earlier tariff actions.

Okay. Let’s now turn to this upcoming Trump-Xi Summit. Now this May 14-15th Summit between the two leaders, assuming it goes forward, is, in fact, a rescheduled summit that was earlier postponed apparently because of the Iran war. There has been a lot of speculation of what we might expect from this meeting. With Trump certainly nothing is guaranteed but here is where experts assess what is most likely to occur.

First from The Economist with the foreign policy editor, Robert Graves:

“It is sometimes said, not least by President Donald Trump, that America and China are now the G2, a duo of superpowers leading the world. That is a grim thought. One has a leader who treats allies like patsies and is ripping apart the institutions that underpinned global stability for decades. The other has an authoritarian regime that bullies its neighbours and is quietly stoking foreign conflicts it could help defuse.”

“Worse, the two countries treat their mutual entanglements on technology and trade as security risks. So the stakes will be huge when Mr Trump visits Xi Jinping, China’s paramount leader, in Beijing on May 14th and 15th, the first of four expected meetings before the end of 2026.”

“Tensions between the two governments run so deep that it would be naive to expect a breakthrough. Had they more skill and humility, Mr Trump and Mr Xi could head off the most harmful conflicts and find areas where they could work together for everyone’s benefit. It is unsettling that so much will come down to Mr Trump, who has veered between calling Mr Xi a dear friend and a foe.” …

“Alas, the two leaders both think that co-operation is a trap in which rules could be foisted on them by the other side. That logic makes dominance the priority, not global public goods.”

“So the summit will probably yield little besides forced smiles. Such a lack of ambition is troubling.”

Now at Brookings various experts set out their projected summit outcomes with most suggesting a modest result as the most likely. As Jonathan Czin suggested:

“Outside observers should have low expectations for the upcoming summit between Trump and Xi. While the relationship has stabilized since the two leaders met last November, it remains fragile—defined more by an absence of friction than any affirmative agenda or deep dialogue on the substantial differences that bedevil the relationship.”

Ryan Hass of Brookings suggested the following:

“To be clear, there will be outcomes from Trump’s visit. Both leaders will likely announce Chinese purchases of American products, such as Boeing airplanes and agricultural goods. … “So long as the visit proceeds smoothly and Trump concludes he was treated respectfully, then the uneasy calm in the bilateral relationship will endure. If, on the other hand, Trump leaves feeling disrespected or trifled with, then he could have a change of heart.”

In a separate Brookings Commentary, Patricia Kim, Senior Fellow - Foreign Policy, John L. Thornton China Center, Center for Asia Policy Studies, Brookings suggested this as the possible result from the meeting:

“The most likely outcome is a year focused on stability—extending the trade truce and avoiding escalation while both sides strengthen their positions. It could, however, evolve into something more ambitious, with expanded cooperation on trade or strategic issues—or shift in a more adversarial direction if Trump walks away dissatisfied with the results of the trip.”

And finally Michael Froman, the President of CFR, suggested these conclusions in his, The World This Week:

“Gone is any pretense of solving the major structural issues at the heart of the world’s most important bilateral relationship: China’s mercantilist economic model, its designs on absorbing Taiwan, and its active support of U.S. adversaries such as Iran and Russia, not to mention any discussion of freedom of navigation through the South China Sea. As such, the summit is unlikely to alter the character and course of the U.S.-China relationship long-term. It is about managing for stability, not solving outstanding concerns.”

“The appeal of this pragmatic, tactical, and transactional approach is understandable. Decades of ambitious, if wishful thinking about the United States’ ability to influence the Communist Party of China on core elements of its economic or national security priorities have borne little fruit. Having a clear-eyed view and pragmatic expectations is not necessarily a sign of weakness. But there is a difference between measured cynicism and complacency. At some point, the fundamental issues at the heart of the U.S.-China relationship will need to be resolved, lest they boil over.”

Now there is a view that there might be more tangible results than just an affirmation of stability and a willingness to purchase US aircraft or agricultural crops like soybeans. There is apparently some discussion of a Board of Trade. Though Graves at The Economist is not necessarily pleased but he did identify this potentially new bilateral institution:

“Mr Trump’s misplaced faith in tariffs makes cuts unrealistic, but holding them at current levels would at least let firms get on with business. The Americans want a Board of Trade to manage commerce between the two countries. That would be unwieldy and would do little to re-industrialise America. A mechanism for regular dialogue would be better.”

And there is even some view that a Board of Investment may be in the wind.

Now it seems that the US has focused on trade rather than security. As Guest suggests, again, in The Economist:

“American negotiators have kept the summit’s lead-up focused on trade, not security. But the Chinese spot an opportunity in the American president’s unpredictability. They may be right. Just as Chinese advisers are afraid to contradict Mr Xi, so officials in the White House defer to Mr Trump on all things China, including Taiwan.”

There is concern, expressed by a number of experts, including Graves again, that Trump may fail to hold to the semantic lines that define US statements to China on the issue of Taiwan:

“American negotiators have kept the summit’s lead-up focused on trade, not security. But the Chinese spot an opportunity in the American president’s unpredictability. They may be right. Just as Chinese advisers are afraid to contradict Mr Xi, so officials in the White House defer to Mr Trump on all things China, including Taiwan.”

“And it is there Mr Trump may think he can lower the temperature by going soft. Chinese officials hint that the more he bends on Taiwan, the more China will give on trade. They hope he might cut arms sales to the island or say he is against Taiwanese independence. He should not take the bait. It would be wrong to sell out a democratic partner and reckless to endanger the world’s essential chipmaker.”

As pointed out by Elliot Waldman, the Editor in Chief at WPR:

“With a Trump-Xi summit set for next week, Beijing on Thursday again stressed that Taiwan would top the agenda, with a Foreign Ministry spokesman saying that U.S. adherence to the “one China principle” is the precondition for any durable improvement in bilateral ties. Separately, Foreign Minister Wang Yi met in Beijing with a bipartisan U.S. congressional delegation led by Sen. Steve Daines, a Republican from Montana and Trump ally. The Trump-Xi meeting is scheduled for May 14-15.”

“Beijing’s emphasis on Taiwan ahead of the summit aligns with Mary Gallagher’s analysis in WPR in November. China’s so-called “four red lines”—Taiwan; democracy and human rights; China’s political system; and its right to economic development—are “not just a laundry list of interests” but “represent critical areas of vulnerability that the ruling Communist Party wants to safeguard against,” Gallagher wrote. And the unifying thread running through all four, she argued, is “Beijing’s overarching concern that U.S. defense and support for Taiwan is increasingly linked not to the Cold War but to Taiwan’s identity as a vibrant East Asian democracy.””

There is general agreement but no consensus on what is likely to result from the Summit. And with Donald Trump at the US helm, that is probably a wise thing. We will watch closely, however.

Getty Images: Licensed under the Unsplash+ License

You can see it with the growing mumbling of the China Hawks as US-China relations fail to advance the geopolitical pushback and great power competition so determinedly described, and in fact called for by these folks - the China Hawks. And presumably we are about to see a big bilateral summit between Xi Jinping and Donald Trump with Trump’s visit to China at the moment set for May 14-15th. I say presumably since this meeting has already been delayed due to the Iran war. So, a Summit - maybe yes, maybe no.

But back to the US China Hawks for just a moment. Dan Drezner pointed to the eagerness of China Hawks in joining up to the second Trump administration - presuming, it seems, the US great power target would be China. As he described in his recent Post at Drezner’s World titled, “Fear and Loathing Among the China Hawks”:

“With Trump’s second term, a lot of China hawks joined, surely convinced that they could articulate and implement a grand strategy that de-emphasized the European and Middle Eastern regions in favor of prioritizing the Pacific Rim. Indeed, this was Undersecretary of Defense Elbridge Colby’s worldview — and his attempt to implement it led some folks to fret that he was exercising too much control over U.S. foreign policy.”

But as Drezner recounts:

“That fear turned out to be spectacularly wrong. But it’s worse than that. In 2025 China hawks could semi-plausibly claim that Trump was simply rightsizing U.S. strategic priorities to allow for a greater focus on China. In 2026, that dog won’t hunt. Indeed, ever since he launched the war with Iran, Trump has been noticeably reticent in critiquing the PRC, despite multiple, ongoing reports that China is aiding Iran militarily.That fear turned out to be spectacularly wrong.”

So what do we see then as the shape of the global order or maybe more definitively the global disorder and the state of great power competition in the continuing conflict in the Mideast? According to Suzanne Nossel, a columnist at Foreign Policy and the Lester Crown senior fellow for U.S. foreign policy and international order at the Chicago Council on Global Affairs, in a recent piece titled, “Hedging is the New Normal, at FP:

“We are living in a new world of hedgers. The shocks of the last several years—COVID-19, Russia’s war in Ukraine, U.S. President Donald Trump’s tariffs, and the Iran conflict—have upended how nations approach international affairs. The smooth flows of a globalized and rules-based world have clotted into uncertainty, forcing states to find new pathways for trade, diplomacy, resource extraction, and defense cooperation.”

So what is hedging and how does it impact the global order? Well, according to Nossel again:

“Hedging is the practice of avoiding exclusive dependence in a world of unreliable partners. It involves cultivating competing relationships across different domains so that no crisis or betrayal will leave a state out of options.”

“States are no longer hedging within a system that is episodically volatile but out of a recognition that there no longer is much of a system at all. The rise of what we might call “hedgemony” is both a response to the reshuffling of the global order and an accelerant of this transformation. Although these moves are being pursued by individual governments in search of stability and security, the net result may be a world that is less predictable and even more dangerous.”

So where does that leave the state of global order, or, again might I suggest, disorder:

“Now that the spell of innocuous interdependence has been broken, nations are moving with grim resolve to foster diversified, even redundant, dependencies. Countries are increasingly hedging their bets with hegemons—namely, by seeking strong ties with both China and the United States—while also striving to lessen hegemonic dependency through greater self-sufficiency and diversified relationships. Even the superpowers are hedging: The Biden administration’s CHIPS and Science Act and Trump’s Pax Silica both sought to reduce reliance on China and, by association, Taiwan; Beijing’s push for technological indigenization, domestic food production, and the expansion of renminbi-based cross-border payments infrastructure is all part of an effort to shield itself from Washington.”

Though I am not convinced that Trump sees the logic of dampened tensions with China, it appears that at least for the moment Trump has “pulled his punches with China” much to the chagrin of China Hawks. And we may yet see some continued calm as a result of the potential visit to China.

But where does this larger hedging environment leave the players? Well, Nossel reflects on it and suggests the following:

“Hedging reflects the world as it is, but it will also reshape it. For one, it will produce a less efficient and more nation state-directed global economy. Transaction costs for government and business will rise in a world that is more compartmentalized. …”

“Hedging will also weaken the universal aspirations of the liberal order and make geopolitics more transactional. Considerations of democracy, rights, and shared political values will quietly recede as criteria for partnerships. Nations will deal more readily with dissimilar regimes, be more willing to overlook internal repression, and treat ideological kinship as a secondary concern. …”

“Hedging will also have serious security consequences. With states less able [to] rely on one another, it’s likely that armament stockpiles will become larger, nonproliferation regimes will be tested, signals will be harder to read, and skirmishes below the threshold of war will intensify. Expect more testing of boundaries—including by Russia in Europe, by China in the Taiwan Strait, and by both powers when it comes to thwarting the United States through cyber and financial brinkmanship. …”

“The rewiring of international circuitry to ward off shocks and disruptions will privilege the states that can assemble nimble teams of forecasters and negotiators capable of making course corrections and seizing opportunities in real time. For instance, Ukraine, which has shown remarkable ingenuity in its fight against Russia, is already providing a paradigm for adaptability in defense and for diversifying its sources of technology and weapons.”

And finally, and interestingly, Nossel reflects back on how Middle Powers (MPs) may react to this disorder by acting in part in the way that Canadian Prime Minister Carney suggested:

“After all, middle and smaller powers with limited leverage to coerce others or flex their might may have the most to gain from a more ordered geopolitics. If they summon the will, they might be able to join forces to reinvigorate or invent new global institutions, forming pacts and institutions that offer a semblance of rules, norms, and predictability.”

For sure we will continue to monitor MP behavior and how they advance potentially multilateral interests.

Now back to Dan Drezner and his conclusion on Trump policy. Now Dan is no China Hawk but his conclusion is telling:

“When I look at what this administration is doing in foreign policy, however, it’s hard to describe it as “hawkish” towards China. Instead, all I see is the current administration pissing away whatever strategic advantages the United States possesses in a diversionary conflict. The U.S. ability to tackle the challenge of a rising China has been compromised.”

And finally some thoughts from colleague Ryan Hass. Ryan is the director of the John L. Thornton China Center and the Chen-Fu and Cecilia Yen Koo Chair in Taiwan Studies at Brookings and also a senior fellow in the Center for Asia Policy Studies. Now Ryan takes the temperature of the competition and comes away with a moderate though unenthusiastic view of Trump’s actions, notably with China. In a piece penned in March Ryan suggests the following in this FA article:

“After a decade of elevated tensions, Washington and Beijing now find themselves navigating relatively calm waters. Last October, U.S. President Donald Trump and Chinese leader Xi Jinping reached an agreement in Busan, South Korea, to pause the trade war between their two countries. The truce paused new U.S. tariffs and rolled back Chinese restrictions on American access to rare-earth elements and magnets. That reprieve is real—but fragile.”

“Over the longer term, much of U.S.-Chinese strategic competition will turn instead on which country exercises greater focus on nurturing its sources of strength. China is currently outperforming the United States on this score. The United States, meanwhile, has again found itself drawn into a costly conflict abroad while it practices fiscal indiscipline at home. To take advantage of this current period of fragile stability in its relations with Beijing, Washington will need to wind down its military operations in Iran and refocus on a more consequential national imperative: rebuilding capacity to compete with China.”

Ryan suggests that there are four factors that account for Trump’s muting of the geopolitical conflict with China. According to him the factors include:

“Trump’s shift has been motivated by at least four related factors, which broadly demonstrate his apparent judgment that there is more to gain from productive and predictable relations with China than adversarial ones. First is the growing number of challenges confronting Trump abroad—including in Gaza, Iran, Ukraine, and Venezuela—and rising domestic pressures related to affordability and immigration. With such a full plate, it stands to reason that Trump would want to reduce volatility in U.S. relations with China.”...

“Trump’s recalibration also appears to be the result of a recognition that China can inflict serious damage in response to American economic coercion. The administration appeared to be caught off-guard by China’s move to weaponize rare-earth, critical mineral, and magnet exports in response to Trump’s tariff escalation in April 2025.” …

“American voter sentiment, too, has pushed Trump to change course. Although elite preferences in Washington remain hawkish toward China, many Americans are increasingly less so.” …

“Finally, Trump values making deals, and especially with Xi. He views stable and smooth relations with China as the most lucrative path for securing the agreements he covets on trade, TikTok, and curbs on chemicals used to make fentanyl. He appears willing to subordinate long-standing issues of bilateral tensions, such as China’s bullying of U.S. allies, to secure near-term tangible benefits such as Chinese purchases of U.S. soybean exports.”

Is the current muted relationship durable? Likely not; it is Trump after all, but then again possibly as a number of commentators, notably, Jake Sullivan, an American attorney who served as the U.S. national security advisor from 2021 to 2025 under President Joe Biden, point recently to the need for the US to maintain a determined focus on technological dominance as described by him in FA in a piece titled, “The Tech High Ground: What It Will Take to Gain the Advantage Over China”. Still, As Ryan concludes in his piece:

“The United States, on the other hand, has a less centralized plan for accelerating broader economic growth. The Trump administration has correctly identified economic and technological power as the foundations of twenty-first-century national security. It also seems to believe that the United States’ possession of such power has been eroding relative to China’s. The remedy, in Trump’s view, is to lower tensions with Beijing and concentrate financial and human resources on rebuilding American manufacturing capacity with an emphasis on the defense industrial base.”

“The administration’s lack of visible preparation for Trump’s upcoming visit has puzzled many analysts. But this is a feature of Trump’s approach to China, not a bug. When it comes to the United States’ relationship with China, Trump is the center of attention.”

So there is the current balance and the incentives to maintain the current US-China calm and maintain that moderation between the two great powers. And if the Summit proceeds we will see what such a US-China leaders’ gathering brings and then propels the two powers afterword.

Photo by Hudson Thomas on Unsplash

It is hard to understand Trump actions on US allies in the current confusion generated by Trump and his people. I began with an effort to assess the state of US-Canada-Mexico ‘renegotiation’. I must admit I found it hard to get a sense of progress, or not, in this review year for USMCA. As Christopher Sands describes at Brookings:

“It is unclear whether the outcome of the first-ever joint review of the United States–Mexico–Canada Agreement (USMCA) will produce a renewal, revision, or termination of the agreement that was one of the most significant achievements of the first Trump administration.”

“What is known is that the joint review leads to a decision that must be made by each of the USMCA member governments:

Whether to renew the USMCA for 16 more years (with another joint review after six years);

Whether to withdraw from the USMCA (following a minimum of six months’ notice to the other members); or

Whether to continue the USMCA without renewing it (in which case the agreement remains in force for 10 more years and expires in 2036).”

Now Christopher Sands is a visiting fellow in the Global Economy and Development program at the Brookings Institution, where he leads the USMCA initiative. Sands goes on to say the following about the state of negotiations:

“Each country must make its decision, but if one country chooses Option 2 or 3, this will affect the others. If one country chooses Option 3, continuation without renewal, then joint reviews like the current one will be conducted every year until all three agree to renew the agreement or it expires in 2036. …”

“The consistent thread of optimism running through each contribution is striking. It is not optimism for the USMCA alone, but for the North American economy as a dynamic, competitive, and innovative regional production platform that draws synergies and fosters specialization through linkages connecting the U.S., Mexican, and Canadian markets.”

Notwithstanding this expression of optimism by Sands, the bilateral and trilateral politics in North America remains rather fraught. Such is hardly a surprise given the folks in the Trump administration not to mention Trump himself. For that piece of the current story I turned to Tonda MacCharles, the head of the Ottawa Bureau for the Toronto Star, one of Canada’s best known papers. There she described Prime Minister Carney’s strong reaction to threats by Trump and members of his administration:

“Prime Minister Mark Carney blasted the United States for ongoing complaints about “trade irritants” like Canadian dairy quotas and provincial bans on U.S. alcohol, saying it is the U.S. that breached the free trade pact.”

““Look, you know what’s an irritant,” said Carney at a news conference in Ottawa. “Fifty per cent tariff on steel, 50 per cent tariff on aluminum, 25 per cent tariff on automobiles, all the tariffs on forest products. Those are more than irritants. Those are violations of our trade deal.””

“Carney suggested provinces are justified in their own retaliatory measures, saying they are a “client” of American producers and can decide for themselves.”

“By imposing sectoral tariffs on autos, metals and lumber in violation of the Canada-U.S.-Mexico Agreement, the current U.S. government has changed long-standing American trade policy, and that’s “their right,” said Carney. He said his government remains prepared to hash out all disputes at a negotiating table.”

In the face of pointed Trump administration actions and further threats it is not surprising that the Prime Minister would then refer back to his ‘variable geometry’ policy declaration:

“Carney said the back-and-forth demands of the U.S. are to be expected. “That’s a negotiation,” but the prime minister reminded that “there are two parties in a negotiation. We’re not sitting here taking notes, OK, and taking instruction from the United States.””

““I will just underscore we understand that the, and this is the point I’ve been making since day one, is that this long period of integration, deeper integration between Canada, United States is over, that nostalgia isn’t a strategy, that hope isn’t a strategy, we’re not going to go back to exactly the way things were. The U.S. has changed.””

““Look, what do you think rupture means? Rupture means that things are not normal. Nostalgia is not a strategy. Things have changed. Things have changed fundamentally. We get that.””

“The prime minister said that is why he is focused on a longer-term plan to diversify trade relations and to build a stronger economy within Canada.”

John Stackhouse, a well known former journalist in Canada and currently senior vice-president in the Office of the CEO at Royal Bank of Canada described the state of US-Canada relations, and the trade negotiation this way at Brookings:

“Trump has repeatedly threatened to upend the agreement, not to sever North American trade but to increase U.S. leverage.He will try and bring Canada as close to U.S. terms as possible, including greater access to Canada’s dairy market, tougher rules of origin for conducting trade in strategic sectors such as defense, mining, advanced manufacturing, steel, and aluminum, and closer alignment of Canadian digital regulation affecting U.S. technology platforms. Canada will seek to protect market access and reduce dependency through its own industrial strategy.”

“As a result, there are at least three major restructurings underway:

1. Expanding ports and export infrastructure to reach markets beyond the United States.

2. Building domestic defense, digital, and data capacity with a “Buy Canadian” approach to procurement and a willingness to increase collaboration with other European and Asian partners.

3. Rebuilding domestic industrial capacity while reorienting manufacturing toward higher-value, globally competitive activity.
These new directions reflect that Canada’s government is determined to set a resilient course for the economy, which is not dependent on a Truth Social post.”

“For two generations, free trade has been Canada’s defining economic condition. It has delivered prosperity, but also deep dependence on a single market—now under the threat of an administration that seeks hemispheric dominance, and even territorial expansion.”

Thus one understands the context for the Craney government efforts to diversify Canadian trade and investment. The Carney government course, or course adjustment, is not an easy path by any measure, especially given the current economically integrated state and the pressures from the Trump administration. US pressure will be strong and threatening but it appears that a long overdue policy correction is indeed underway.

One evident recent example is the “Made in Europe” scheme. As described recently in the FT by Sebastien Ash, Ian Johnston and Ilya Gridneff:

“The EU’s “Made in Europe” bill, formally called the Industrial Accelerator Act (IAA), is designed to boost the bloc’s manufacturing output, which fell from 17.4 per cent of EU GDP in 2000 to 14.3 per cent in 2024.”

“EU officials have told the FT they are open to deals with third countries, which could be made after the IAA has been adopted, potentially by the end of the year.”

With respect to Canada:

“Canada will seek talks with Brussels to gain access to the EU’s “Made in Europe” manufacturing scheme, its industry minister has said, as Ottawa looks to boost trade beyond the US. Brussels last month unveiled plans to shield strategic sectors such as clean energy technology and heavy industry from unfair competition from third countries, especially China, by limiting access to subsidies and public contracts in those areas to EU-based businesses.”

“However, manufacturers from countries with which Brussels has trade agreements could also be included if EU companies are offered reciprocal access to public subsidies and contracts in those markets.”

“Canada’s industry minister Mélanie Joly told the FT that Ottawa wanted to make sure that industrial policy in the EU and Canada was “aligned”.”

“Asked whether that meant she thought Canada should be included in the “Made in Europe” scheme, Joly said Ottawa’s goal was “to engage the EU to have a reciprocal approach”.”

“Any deal between Ottawa and Brussels over their industrial sectors would support Canadian Prime Minister Mark Carney’s appeal for “middle powers” to work together to form an economic counterweight to the US and China.”

It would seem that the Carney government’s “Middle Power variable geometry policy” is indeed underway. There are no givens in this new Canadian policy direction. But for sure, we will watch very closely. A lot is riding on this turn in Canadian trade policy.

The 2026 Logo for the Spring Meetings brought by the International Monetary Fund (IMF) and the World Bank Group (WBG) in Washington DC - https://www.imfconnect.org/content/imf/en/meetings/SM26.html

So this past week was a busy one. Just back from Washington, now, and I’m giving myself an opportunity to reflect on the experience. Both myself and the Co-Chair of the CWD, Colin Bradford, and indeed a good ‘whack’ of our CWD colleagues travelled to Washington this past week to attend what are called the ‘Spring Meetings’ organized by the International Monetary Fund, the IMF, and the World Bank Group, the WBG. The meetings included the President of the World Bank, Ajay Banga, and the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, not to mention a thousands of officials and experts from around the world. And as it turned out, the Spring Meetings served also as an opportunity to launch the T20, or Think Tank 20, for this year, a major Engagement Group of the G20.

But first the Spring Meetings. So what are these annual gatherings all about? A solid description was recently provided by Michael Froman, the President of CFR, the Council on Foreign relations. In his description in ‘The World This. Week’, Froman set out the broad outline of the meetings:

“Every spring, central bank governors and finance ministers from around the world gather in Washington for the Spring Meetings of the International Monetary Fund (IMF) and the World Bank to discuss the state of the global economy, macroeconomic coordination, and financial sector management. The topic dominating discussions this year is the war in Iran—and the ensuing economic fallout.”

So in a variety of settings the current and former IMF and WB and other global and regional financial institution members worried about and sought to clarify what the impact of wars in the Middle East might do to the global economy and global finance. As described by Michael Froman:

“I sat down with IMF Managing Director Kristalina Georgieva last week for a curtain raiser conversation ahead of the Spring Meetings. We discussed the Fund’s macroeconomic outlook, including its latest analysis on how the war is affecting global growth, inflation, and economic stability. I left with a number of takeaways.”

“The first is that while combat operations have largely ceased, uncertainty still reigns. The true economic impact of this war will not be determined by the damage caused so far, but rather how long the ceasefire lasts, the degree to which traffic in the Strait of Hormuz returns to pre-war levels, and the prospects for a durable peace in the region. The first round of direct peace talks last weekend failed to produce a deal. Earlier today, the United States and Iran announced the strait is open for commercial ships, though President Donald Trump posted on Truth Social that the United States will continue to prevent ships from sailing to or from Iranian ports from the Arabian Sea and the Gulf of Oman until a peace agreement is final.”

“… As Georgieva stated so clearly last week, “Even in a best case, there will be no neat and clean return to the status quo ante.” Global shippers and mariners have long memories. Current transit volume in the Bab el-Mandeb Strait is still only half of what it was before the Houthis’ attack on commercial shipping after the events of October 7, 2023.”

The Managing Director came down, in part, on the following:

“At a moment of cascading geopolitical crises, the IMF finds itself not in panic mode but focused on what Georgieva might call “cushioning the Middle East war shock” mode. Part of the explanation lies in an unexpected buffer: the artificial intelligence investment boom, which accounted for as much as 40 percent of U.S. GDP growth over the past year. Yet that tailwind has not blown equally across the globe. The countries bearing the greatest costs of the current shocks are largely not the ones reaping its rewards. And there is no guarantee it will continue.”

So the Managing Director, and the President of the WBG and various other IMF, WBG officials and a slew of other notables were all over the meetings with thoughts and insights of the state of the global economy - and, also, the risks to the global financial system.

You’ll not be surprised, then, that CWD also organized several gatherings, beginning on Tuesday, with the help of our colleague Michael Mochizuki of George Washington University, a full 3-hour CWD global dialogue discussion. This opening discussion was designed, as described by Colin: “The two main issues are “Global Imbalances, Trade and Middle Power Opportunity” and “Global Financial Risks and Surveillance”, with an overview to start on the “State of Play in Multilateral Economic and Financial Cooperation“.

The character of these risks: these global financial risks, and more broadly global imbalances, as well as the leadership of the global financial order in the face of a second Trump administration, all were discussed with various colleagues at intense but very fun dinner settings over 2 evening meals: ‘breaking bread and energetic discussion’ what could be better. And with all the side meetings as well with various experts and officials it all made for an intense but valuable time.

But the fun didn’t stop there. The Spring Meetings afforded an opportunity, as it turned out, to launch the T20 for this year with an opening meeting organized by several colleagues at the Brookings Institution, including Homi Kharas and Amar Bhattacharya but also Trita Parsi from the Quincy Institute for Responsible Statecraft and Richard Ponzio of the Stimson Center. The T20, the Think Tank 20, is part of a broad set of engagement groups that provide insights and views, policy expression designed to assist action and provide policy directions and policy recommendations for the G20 and the G20 Leaders.

The meeting held at Brookings this week launched this year’s T20 efforts but under the burden that the Trump administration, this year’s host of the G20 sadly acknowledged only 1 engagement group, the Business 20, or B20, and no other. Thus, the T20 for 2026, initiated by this inception meeting is styled as an Informal T20. There is unfortunately no US official designated as a contact to receive the policy directions and policy actions of the T20.

Nevertheless, this Informal gathering and initiation drew in person or by Zoom many participants. We heard from Elizabeth Sidiropoulos from SAIIA who held a significant T20 role during the G20 South Africa. And we heard from folks leading the workstreams organized for this year:

· Workstream 1 – Fostering Trade and People-Centered Economic Growth

· Workstream 2 – Safeguarding Energy Security and Resilience

· Workstream 3 – Boosting Innovative Technologies -, including Artificial Intelligence

· Workstream 4 – Mobilizing Finance and Tackling Debt Constraints, including through International Financial Architecture Reform, and

· Workstream 5 – Sustaining and Strengthening Global Coordination on Socioeconomic Development and Peacebuilding

The hope is that each group will produce a set of papers that will be forwarded to the appropriate US G20 official(s). The task has not been made easier by the Trump administration but I am confident that this year’s T20 efforts will ‘bear some fruit’.