The Grandiosity Of The Leyen-Carney Romance

I've got to say that I've never seen B-listers quiite like Ursula von der Leyen and Mark Carney. Completely uncharismatic, they try to make up for it with public displays of affection and grandiose mutual pronouncements of their importance in B-list places like Strasbourg and Montreal.

The Arctic is one place where the tectonic plates of geopolitics are colliding. And it's not someone else's frontier, it's part of the European Union. Three of our member states are arctic countries. . .

This was part of yesterday's statement in Montreal, carried in the video embedded above. She refers majestically to "the tectonic plates of geopolitics" as part of the EU, but she glosses over that two European Arctic countries, Norway and Iceland, aren't part of the EU by choice, while the US and Russia are far more influential, and the US manages the Canadian Arctic defense on Canada's behalf. Beyond that, earlier this year, Denmark ceded military control of Greenland to the US as well.

It seem to me that she and Carney are trying to build a vibe that Canada has thrown in its lot with the EU, when nobody has any idea what the actual arrangement will be, and any defense agreement will still rely almost exclusively on NATO. Canada's contribution to NATO is nugatory, while the European NATO countries would not be able to undertake serious military operations without direct US logistical and intelligence support.

Sundance at Conservative Treehouse tries to parse out what Carney may have in mind, without much success:

Canada is in a really weird place and I’ve all but given up trying to understand it. At a certain point you just have to accept that Prime Minister Mark Carney is operating on an agenda for that country that is disconnected from all traditional perspectives around national best interest.

For example, the Canadian trade relationship with the single state of Texas, USA, is larger than the total Canadian trade relationship with the European Union, yet Carney is spending an inordinate amount of time chasing a trade deal with the EU that is never going to amount to anything. Seriously, it’s a literal dead-end.

First, there’s not a scintilla of alignment between the USMCA (Canada says CUSMA) and the European Union. There’s two entirely different sets of economic baselines, standards, rules and regulations between trading with the United States and trading with the EU. If Canada wants a trade relationship with the USA, they have to give up trying to structure their economy to align with the EU; both systems are entirely different.

Canada cannot have a comprehensive Free Trade Agreement with the EU that contains structural regulations on the flow of goods that substantively restricts Canadian products from entering the USA. The same issue exists with China.

Now, if Canada wants to separate from the North American trade agreement, then by all means – go for the deal with the EU and/or China. However, as long as Canada wants to retain their USA dependencies and benefits, there’s no mechanism that permits an FTA of substance with Europe or China. Mark Carney cannot have it both ways.

In other words, both Carney and Leyen live in a world of vibes, atmosphere, and impressions. It's entirely appropriate that both seem to think they're the Holy Roman Emperor. Meanwhile, in Fortune, How Canada decided to hurt its own economy, raise its inflation—and most Canadians approved because they’re so angry at Trump:

In a report published after Canada announced the tariffs on Aug. 25, Oxford Economics analysts warned that while the retaliatory tariffs may help protect some domestic manufacturers, it will also force Canadian businesses to absorb added business costs and increase consumer prices.

Canada depends on the U.S. buyers for about 70% of its exports, and the U.S. economy is about 13-times larger than Canada's.

Oxford projected that Canada's GDP will likely grow by 0.8% in 2026, but tariffs will reduce growth in 2027 by 0.2% to 0.3% relative to its August baseline calculations. It predicted inflation to increase by about 0.3% compared to the August 2027 baseline.

. . . Then there's the practical matter of Canada being able to sustain its efforts to combat Trump's trade policy. While the popularity of Carney's trade tactics are popular now, political analysts suggest support for the Canadian government's tariff payback could wane should the economy take a downturn.

"Carney's leverage will start to diminish if this escalating trade war starts to show up in palpable increases in unemployment, factory shutdowns and declining income," Julian Karaguesian, a former adviser at Canada's Finance ​Ministry and economics professor at McGill University, told Reuters last month. "Canada cannot win an economic war of attrition with the U.S."

For now, Carney is trading on being a world-class B-lister and a technocratic cool kid, insofar as technocrats can be cool, but let's face it, Scott Bessent is way cooler than either one. Carney's shown no urgency in resuming the trade talks, apparently banking on continuing support for standing up to Trump. Does he really believe Trump will blink first?