Dr Leslie Vinjamuri
Welcome to our webinar today. I’m Leslie Vinjamuri, Director of the US and Americas Programme here at Chatham House. I am very, very grateful and honoured to welcome our two guests, speakers to Chatham House. They are not guests to Chatham House, and I imagine that you know them well, they are both Associate Fellows on the US and Americas Programme. I will give a brief introduction in just a moment, but let me say, first, that we are here to speak on the record, we are livestreamed, so welcome to all of you joining from I’m sure North America and Europe and hopefully, far beyond.
I think, it’s a little bit hard to, kind of, get our heads around this, but I think we’re not quite three weeks into Donald Trump’s second term as President of the United States of America, and I say that because the sheer scale and force of activity, of policy, of ambition, is really remarkable in the truest sense of the word. We’ve seen an extraordinary range of domestic measures rolled out in the United States, certainly with respect to the Executive Branch, and a large number of executive orders signed in the first few days. But I think as we turn to look across the Western Hemisphere and across the globe, the thing that really stands out is the, sort of, foreign policy towards America’s closest partners and allies and friends and trade partners in North America. And that’s why we’ve decided today to turn immediately to talking about North America, the rewriting of the Western Hemisphere, I guess with a question mark.
Last weekend, we were all, I think, gripped by the announcement that there would be 25% tariffs levied on Canada, you know, one of America’s very closest partners in matters of war and peace, trade and everything else, and 25% on Mexico, one of America’s very closest partners, with whom it shares an extraordinarily large border. And in Canada, the United States and Mexico, one of the very most successful regions in the world in terms of economic integration, intraregional investment and trade, and firmed up and facilitated by that United States-Mexico-Canada agreement. So, a rather significant announcement. And then, of course, Monday was a, you know, many lives inside of one day, and at the end of the day, we saw a negotiation that saw a pause, a 30-day pause on those – that threat of tariffs.
So, we immediately turn to two really truly extraordinarily accomplished and expert people. Let me say just a word about each of them, before I open this conversation up to them. Roland Paris, Professor Paris, is a Director of the Graduate School of Public and International Affairs at the University of Ottawa. He was a Foreign Policy Advisor to Canada’s Prime Minister, in, I believe, his first year in office, and remains one of Canada’s most prominent foreign policy experts and Commentators, obviously very well-known and active in that space in Canada and globally, and we rely on you a lot, Roland, at Chatham House, as our, sort of, person on Canada.
Ambassador Julián Ventura is also our Associate Fellow. Julián was previously Mexico’s Deputy Foreign Secretary. He became a friend and colleague here in London when he was Mexico’s Ambassador to the United Kingdom. He was previously also Mexico’s Ambassador in China, and has worked, really, across the globe in many posts. He – I think, 33 years, is that right, Julián, in Mexico’s foreign service? And we’ve visited and participated in meetings with you in Mexico, it’s been a real pleasure. Ottawa’s on our list, Roland, but I don’t know, you might not have us now, we’ll see. Hopefully Chatham House helps, I’m not so sure.
Professor Roland Paris
You’re always welcome.
Dr Leslie Vinjamuri
But the US part helps. So, Roland, we’re going to start with you first. It has been an extraordinary, you know, few days. You wrote a tremendous piece for Chatham House, on the web – it’s up on the website, you know, reminding us of quite what a – never mind the policy circumstances, what effect this has had on public opinion and anti-Americanism in Canada, and nationalism within Canada. But maybe you could walk us back to the beginning and give us a sense of how you would portray just what’s happened. If you can just start with what has happened, and how do – where are we now?
Professor Roland Paris
Sure. I’d be happy to do so, and yes, it has been an extraordinary shock for many Canadians and the shock is going to reverberate for, I think, quite a long time. So, go back to Trump’s election, and Justin Trudeau sought a meeting with him, and got a meeting with him, in very late November at Mar-a-Lago. And at that meeting, in a public dining room, Donald Trump expressed concerns about the flow of fentanyl from Canada into the United States, and also ‘illegal aliens’, as in the American terminology.
Of course, you know, it was a bit puzzling for the Canadian side, because the amount of fentanyl entering the United States from Canada and the number of people who are detained at the border trying to enter the United States illegally is a tiny fraction of the flows from other sources. Nevertheless, the Canadian Government recognised that this was something on Mr Trump’s mind, so it went back and within two weeks, pretty extraordinarily quickly in the Canadian Government system, announced a 1.3 billion Canadian dollar plan to strengthen border and further combat fentanyl, which is a public health problem in Canada too, and then tried to get this information to Mr Trump. Mr Trump did not want to take Mr Trudeau’s calls, according to Trudeau himself, and meanwhile, many other Canadians were trying to get this message that Canada was acting on these initiatives. And then came the announcement of the 25% tariffs against Canada, with the executive order specifically mentioning fentanyl and illegal migrants as the putative emergency providing legal justification for the tariffs.
So, the response in Canada was immediate. In the preceding weeks there had been obviously great concern about the possibility of tariffs. Canadian leaders had been debating with each other about what the right strategy would be. There were some differences, regional differences, within Canada. The response to Trump’s tariffs were galvanising, not just for the Canadian public, but also for Canadian leaders. The Canadian Government announced a much bigger package of retaliatory tariffs than was expected. All the leaders pre – and most of the Cana – political leaders in Canada lined up behind that. The – those who are seeking to replace Mr Trudeau as Leader of the Liberal Party, ‘cause he’s announced that he’ll resign and there’s a contest to replace him, all support retaliatory tariffs. Those that – the leader of the opposition Conservatives, who are ahead in the poll, supports retaliatory tariffs, Canada’s provincial leaders support retaliatory tariffs. And so, there was this real galvanising effect.
And right now, the debate in Canada is how to, number one, try to avert the – what’s going to happen in, whatever it is, 28 days, the risk of another round of tariffs, but number two, there’s a really serious discussion happening right now about how to reduce Canada’s exposure to threats and attempts at extortion, which is how this action was interpreted here. And that’s going to be a much longer discussion because it has to do with Canada’s export patterns, its internal trade, its infrastructure, and in that – for that reason, I say that it has been a transformative moment for Canada.
Dr Leslie Vinjamuri
Let me ask you one follow-up question before I bring Julián in, and it’s – I guess it’s about, you know, the circumstance that – during which this arrived, and that is your political transition. Do you feel, or is your assessment that the response, that Canada’s response, was tougher than it might otherwise have been? Was – is – has there been, you know, a domestic politics of this which is about demonstrating strength amongst different contenders for leadership? And is the assessment within Canada that the strategy worked, or is the assessment that, you know, Donald Trump was bluffing all along, or, you know, is there an assessment of the particular strategy that was used?
Professor Roland Paris
Well, I think the initial assessment is that we got through this first threat and gained 30 days of reprieve, if I can use that term, in part, because Canada was willing to put serious retaliatory tariffs on the table. And because – perhaps because Mr Trump was receiving some feedback, some blowback, from elements of US industry, that recognised the potential costs of all of this, not just Canadian retaliatory tariffs, but his proposed tar – 25% tariffs themselves. Don’t forget that the United States exports more to Canada than it does to China, Japan, the UK and France combined, and so, you know, putting – and that trade is enormous. It’s true for Mexico too, so putting 25% import duties on those imports and then having your trade partners impose retaliatory tariffs would be very significant.
In terms of the impact on the domestic politics, so Canada’s in a moment of some flux, because Mr Trudeau said he would resign. He – there is a contest to replace him as Liberal Leader. As soon as there’s a new Liberal Leader, the House of Commons will come back. The expectation is that there would be a vote of non-confidence, an election. Certainly there has to be an election by October, there may be an election as early as May, but the result of Donald Trump’s threats to cripple Canada’s economy and threats against Canada’s sovereignty too, let’s not forget that, it’s all compounded by these mu – fantastical musings about absorbing Canada, has been to make it impossible, virtually impossible, for any political leader in Canada do – to do anything other than stand up to him.
Dr Leslie Vinjamuri
Thank you, I appreciate that, and I’m – you know, it’s not – the level of integration, the level – the nature of the relationship is not the same, but it is interesting that the first threat of tariffs was against Colombia, and the – Trump’s decision to backdown was, you know, on the basis of a very different logic, which is that Colombia accepted the immigrants coming in, I think on the same planes, still the military planes. So, it was a backing down logic that led to a pause.
Professor Roland Paris
Yes, but if I can just add, you know, the initial threat against Colombia, you know, the – what Colombia had to give up was to accept military planes returning deportees, as opposed to returning deportees under a more – less militarised conditions. Whereas, for Canada, the tariffs were imposed first. In other words, there was the – this was an unprovoked attack on Canada’s economy, that’s how Canadians have experienced it. If I could just add one last thing to give you a flavour of the mood in this country. Yesterday, early morning, I went to my Dentist. Unprompted, my Dentist told me he is not buying American products. I went to work, my students told me that, my colleagues told me that, my Uber Driver told me that, and this is probably too much information, but a Bartender told me that. That was one day.
Dr Leslie Vinjamuri
Look, as an American who does not live inside the United States, we are very well aware, and Peter Katzenstein has done some very rigorous research on the ebb and flow of anti-Americanism at different political inflection points over many decades, it’s a very serious issue.
Julián Ventura, Mexico, it must be a little bit painful to listen to this, insofar as Mexico’s been dealing with, you know, all sorts of threats and all sorts of rhetorical attacks and all sorts of pressures, some of which are tremendously nasty, from the United States, for a very long time, and certainly throughout the US election campaign, and obviously throughout the first Trump administration. So, this is, in some ways, generally speaking, not new, but obviously the specifics of this past week and, you know, the lead up to it are distinct. So, it would be good to hear from you first on, you know, what is your – how would you depict where Mexico is and how it experienced this last week, or several weeks?
Julián Ventura
Well, thank you, Leslie. As you mentioned, that confrontational narrative has been recurrent. I mean, we saw some of it in President Trump’s first presidential campaign, and during his first term in office. And of course, things ramped up over the last few months as we saw the US election play out, and in which two of the issues that were top of mind for American voters in the election related to the border, to immigration, and to drug trafficking. President Trump had, of course, highlighted the importance he was giving to trade and this notion that tariffs are beautiful, are the most beautiful world – word in the dictionary, so, in a sense, there are no surprises.
But, you know, but we have to underline that the administration kicked off its international engagement with a high stakes game of brinksmanship against its two North American neighbours and main trading partners. And of course, the crisis was temporarily averted with this one month pause in tariffs, and the threat of tariff reprisals from both Canada and Mexico. But what we witnessed was a modern-day March of Folly, at a critical geopolitical juncture, in which the US needs its two neighbours to compete and succeed in the long-term, regardless of the turbulence that we’re seeing right now. And I think that in Mexico’s case, and this applies to Canada, effective crisis diplomacy allowed both countries to temporarily diffuse the bomb. We have to hope that this pause will lead to a more sustainable way to tackle Washington’s new approach, but in any scenario, uncertainty and disruption are going to be the name of the game going forward.
And beyond the economic impact of tariffs on consumers, on inflation, on investment, on employment, the experience over the last few days, and Roland hinted at this, is in many ways, a shot across the bow of three decades, or more than three decades, of North American economic integration. And equally importantly, it undermines the level of trust between the three partners that hasn’t been as easy to build over that time. Mexico, in its engagement with Trump, President Sheinbaum did not meet in person with President Trump before. She did speak to him by telephone a couple of times. There was, of course, discreet engagement by members of her team within incoming members of the US administration. She spoke to President Trump on Monday of this week, committed to an additional deployment of National Guardsmen to the US-Mexico border.
It is – there are policies and mechanisms that had already, in a way, been previewed. The immigration track had been flowing according to various procedures, both in terms of repatriations at the Mexico border, but certainly there was a lot of disruption. And what we’re going to see over the next few weeks are three dialogues, one on immigration, one on trade and one on security, especially focusing on the issue of fentanyl. In which, you know, the pressure will be to produce, without any specific benchmarks, results that are visible in the White House’s narrative. And that’s something that we’re going to have, in my view, both Canada and Mexico, to prepare for, over the next four years, regardless of how we deal with the specific turbulence at this moment.
Dr Leslie Vinjamuri
So, to give, you know, our audience, ‘cause we – you know, you very graciously took a team of us through Mexico City a few months ago to meet on these questions of immigration and trade and a broader package of issues in the North America relationship. Could you give us, you know, your sense of the state of play prior to the recent politics and the threat of tariffs at the border? You know, where had things got to? ‘Cause, you know, we tend to just hear a lot of hyperbole. Unless one is really following the issue closely, you know, you would get the sense that there was complete chaos and, you know, I’ve heard you speak very eloquently about how large this border is, the level of transactions and movement across the border. Maybe you could just, you know, give us a baseline of the significance of that border. Sorry.
Julián Ventura
Well, you know, keep in mind that the US-Mexico border, the, you know, the length of that border, is the same as the distance from Dublin to Athens. So, we’re talking, you know, for our European and UK viewers and listeners, it’s a large border. And of course Canada, Mexico, the U – Canada-US border, the largest undefended border, in many ways, is also huge, so the dimension is very large. The fact is that the immigration dialogue and immigration co-operation, even after – during the Trump administration, has been flowing in quite a positive way. The border is the quietest it’s been in the last five years. The tensions are at their lowest point. Mexico implemented various human mobility mechanisms, together with the United Nations High Commissioner for Refugees, civil society’s engagement with US counterparts to take the pressure off asylum claimants at the border through various technological aids. The famous CBP One app, which has now been terminated.
But again, nuance doesn’t matter. Facts are important, but perceptions are stickier than ever, especially with the dynamics in social media. So, President Trump hit the ground running with a series of executive actions, declaring a national emergency at the border, promoting an end to birthright citizenship in the US Constitution, which is subject to various legal demands right now. Ended humanitarian parole programmes. So, you know, immigration is again going to be a key part of this bilateral engagement. The same will apply to fentanyl and drugs. You know, Roland mentioned, you know, we have very different dynamics and dimensions of the fentanyl issue between Canada and the US and Mexico and the US, but it’s a problem that is tremendously difficult to tackle and requires international or bilateral co-operation, because they’re multidimensional problems.
Just to illustrate the point, a year’s supply of fentanyl in the US fits in one container truck. So, it’s like finding a needle in a haystack, when you take into account that an average of six million trucks cross the Canada-US border every year, seven million trucks and 60 million cars, between the US-Mexico border. So, it’s a tremendous challenge, in which, by the way, engagement with China is essential. When Trump applied his tariffs during his first term against China, China quietly stopped, or relaxed, customs controls and inspections of laboratories that make and export precursors to – across the Pacific.
So, we saw significant rises in fentanyl traffic and precursor traffic to Canadian ports, to Mexican ports, and that changed the dynamic, which resulted in a huge figure of over 100,000 overdose deaths in the United States, which are now down significantly, as well. Every death is a tragedy, but the estimates place fentanyl overdose deaths in the US at approximately 50 to 55,000, and that’s a significant decrease from just two or three years ago.
Dr Leslie Vinjamuri
Thank you. I think that – I mean, I – you know, it’s a – it is – it’s incredibly important, kind of, baseline setting, because it is so much in the news but very rarely do we actually get more exposure to the realities of the border, and I know you know a huge amount about it.
I want to ask both of you I guess a question – a couple of a questions, one is about, you know, where you think this is now headed? But also, to turn, not away from North America, ‘cause it is so central, not only North America, but west – to the Western Hemisphere, of what’s – of what is, kind of, at the beating heart of Trump’s first foreign policy moves, but as we are here in the UK, as we are, sort of, in Europe, but Europe is, you know, on the chopping block also, what do you – you know, a) what is the level of communication between your governments and the Europeans? Is – are there, you know – is there an active conversation about how to learn lessons from the, you know, very recent experience that you’ve had with the United States on the question of threats of tariffs? What – and what do you think the lesson is? Maybe I can come to you on that first, Roland.
Professor Roland Paris
So, it’s unclear where this is heading, but it seems clear that Trump wants to have this threat of crippling tariffs hang over Canada and Mexico, maybe even indefinitely, in order to be able to extract concessions going forward. Now, what concessions exactly are themselves hard to know, because he’s listed so many grievances, ranging from really mundane trade issues, all the way to the, kind of, the affront of Canada being a separate sovereign nation in North America. So, where he goes with this is unclear.
In the meantime, Canada is working on two fronts. One is the co-operation side, which involves a really extensive outreach campaign by Canadian Government actors, by leaders of the provinces, by – even by Canadian Mayors, by leaders of the business community, by the labour community. Reaching out to their counterparts in the United States to emphasise the importance of the bilateral relationship and working together, and how much we both and all three countries have to lose if this – if the relationship that Julián described as being built up over decades, is damaged.
The other approach is to prepare for the worst, and that itself has a short and a longer term dimension. The short-term is being ready for the possibility that Trump imposes these tariffs. Being ready with very well studied retaliatory tariffs which are designed to produce specific political effects in the United States, by targeting particular sectors, particular regions, particular districts. But also, being ready to support Canadian workers in sectors that might face really grave consequences if there were to be 25% tariffs.
The longer-term hedging strategy is what I mentioned before, which is trying to derisk our relationship with the United States. I mean, nobody in this country imagines that, you know, Canada’s going to, like, saw the border between the United States and we’re going to float ourselves over to, you know, hug Spain and Portugal or whatever. We are North American, and our priority is to make this work, and so, nobody’s talking about decoupling or anything like that, but derisking really means reducing our vulnerability to these kinds of threats.
And the concern is that we’re seeing changes in the US political system. Whereas in the first time, for Trump’s first term, it was, kind of, possible to write this off as the strange – as a strange aberration, now, he has been re-elected with the support of tens of millions of Americans. His supporters are predominant in Washington. Those who might have criticised him during his first term, many of those leaders outside of government or inside, elected officials, are relatively muted now, out of fear of antagonising him. So, we have to prepare for the possibility that this is actually the new normal, which is shocking but real. I think that’s what this incident has produced.
In terms of communication with Europe, yeah, there’s communication, and the Prime Minister’s going to be travel – Canadian Prime Minister’s going to be travelling to Europe next week, going to Paris and Brussels. Don’t feel offended those of you watching in the UK. I’m sure he would have gone to the UK too, but, you know, there is a crisis happening here at home. And he’ll be talking to European leaders, he’ll be talking to the Secretary-General of NATO. He’ll be attending a major AI conference in Paris. I have no doubt that most of those conversations are going to be about, you know, what’s going on with Donald Trump and exchanging notes about what, you know, what various different countries might be doing to prepare for the worst and to avoid it.
Dr Leslie Vinjamuri
Thank you. Julián, on – your thoughts on this question?
Julián Ventura
Yeah, so the way these dynamics are playing out in North America, I think should be followed closely by other partners, including of course, Europe. Much as they did, and we have to remember this, when Canada and Mexico transformed, under the gun, in many ways, 1994’s NAFTA into the North American Free Trade Agreement, into the USMCA. So, there are lessons to be learnt, the world was watching at that time, if it was possible to negotiate at Donald Trump, and, you know, the result showed that you can negotiate with Trump. And the expectation from an optimistic viewpoint would be that we can again find a way forward.
It’s important to remember, Leslie, the stakes that are involved. I mean, we’re talking about a $1.5 trillion relationship, 17 million jobs in the three countries that are linked to trade. The US farm belt depends greatly on Mexico, we’re the biggest customer of American corn, for example, and American soy beans. Much more than China or other Asian partners. You saw, for example, a Nebraska Senator over the weekend, begging, and I’m using his words, President Trump, to “exclude Canadian potash from the tariffs,” because the farm sector in his state is so dependent on fertilizer and various key inputs from Mexico.
There’s no such thing now as a Canadian car or a Mexican car or an American car. It’s important to remember that they’re North American cars. They cross the border an average of five to seven times before they become a finished product, and as a whole, Canadi – Mexican exports have approximately 40% US content. So, when Mexican exports increase, you’re increasing sales of American products and American imports. So, the interdependence is very important to keep in mind. Take Texas, Mexico and Texas trade approximately $280 billion a year, that’s much more than the US trades with Germany or with the UK or with France, so it’s very important.
Now, in terms of way forward and lessons learnt, I think something that Roland mentioned is very important, you have to activate key stakeholders, not only your domestic stakeholders in the business community and the state, or provincial and state Governors in the case of Mexico, on these issues, but also key stakeholders in the United States. And both Canada and Mexico have been doing it. There are instances in which Canada and Mexico can work together, that doesn’t have to be automatic or all across the board. We have different national interests and a different kinds of footprint, but, you know, President Sheinbaum spoke with Prime Minister Trudeau before the announcements. President – Prime Minister Trudeau mentioned that he had been talking to President Sheinbaum as Canada was moving forward in putting together its tariff retaliation package.
If there are lessons to be learnt, I think, you know, be prudent, be pragmatic, cool headed and firm. And that’s some – a signal that came out that was very, very important, and in the case of President Sheinbaum, I think she handled it very possibly – very positively. Be media visible when appropriate. You know, you don’t have to be beating the drum everywhere 100% of the time, you have to target your messages, taking into account that regardless of what the facts are, there are perceptions that are important regarding, for example, the role of China in North America, the impact of fentanyl. Don’t waste your time if you don’t target your messages appropriately.
Finally, I would just close with a comment on the weight of history in these factors, and I think that’s important for Europe, which is a very value-centred, global vision. When I spoke about the countries overcoming, you know, historical grievances or nationalist tendencies, there’s been a lot of talk about President McKinley in the US, you know, late 19th Century. But Mexicans were thinking back to 50 years before that this weekend, to another US President, to James Polk, who detonated the US invasion of Mexico in 1846. The treaty that was signed, in which Mexico lost what is, basically, present day California, Nevada, Utah, New Mexico, Arizona, Colorado, was signed this weekend. That was the anniversary, and that last battle of that war was fought just a few hundred yards for where – from when I’m sitting right now.
So, this, kind of, brinkmanship reawakens nationalist fibres, questions of national identity, and I think this applies to Canada, as well, which are below the surface and which do not contribute to a vigorous, kind of, trust-building exercise, in a very complex global environment.
Dr Leslie Vinjamuri
Thank you, very important point. I’m going to come to you in just a minute, Roland, but I’m going to, kind of, put one more question out there for both of you, before we come to some audience questions. And I guess it is, you know, not only on Canada, Mexico, the United States, i.e., North America, but on this broader question of, you know, what is the bigger play? And I wan – you know, you’ve mentioned China, there’s been a little bit of talk about security, but to what extent – you know, the last few weeks have been extraordinary. You know, we haven’t talked about the bid for the Panama Canal, the, you know, the, sort of, the items that the Panamanians have put on the table to speak to Marc – Senator – Secretary Rubio on this.
And when we look at Europe, you know, there is a question about whether tariffs are, you know, just about bilateral trade deficits and surpluses, or whether there is, you know, a broader linkage to questions of defence spending, security assistance. Obviously NATO’s a – you know, an – Canada’s a NATO ally. How much of this do we think, kind of, will stay, you know, this use of tariffs, will stay limited to economic and border issues, but how much of it is, you know, a tool that’s being used to make a bigger play in the international order and in the Western Hemisphere? A very big question, I think it’s a really important question. Roland, I’m going to let you unmute and start.
Professor Roland Paris
Yeah, so, the – you know, if you listen to what Donald Trump has been saying for a long time, he sees tariffs as a, kind of, multipurpose Swiss army knife tool, that can accomplish many different things. And one of the things that he’s continually come back to is tariffs as a revenue generating mechanism for the US Treasury. That’s part of the, you know, harkening back to William McKinley, who himself, changed his mind about tariffs later, but Trump doesn’t mention that. Another thing that Trump thinks that tariffs can accomplish is to restore a more vigorous manufacturing sector within the United States.
And so, even the threat of tariffs, for example, against Canada or Mexico, or others, has a chilling effect on investment decisions about where companies might invest in new production facilities, expand production of facilities, etc. Because the implication of Donald Trump’s vision of these benefits of tariffs is to start unravelling the supply chains that Julián was mentioning, and that has much larger implications beyond North America. So, for Canada, there’s going to be a consideration of the renegotiation of the USMCA, or CUSMA, or T-MEC, or whatever you want to call it, coming up next year, and that will certainly be front and centre.
Then there’s this, kind of, weird imperial, kind of, vision that Trump has laid out with regard to the Panama Canal and Greenland and Canada. You know, it’s hard to know what to make of it. He has this idea, he mentioned it at his inauguration and since, that, you know, America will be great again by expanding its territory. You know, I – it’s really just diff – he says a lot of things. He said something about Gaza recently which the administration immediately had to walk back, so it’s hard to know, you know, of these – he throws a lot of things against the wall and sees what might potentially stick.
Which is why it’s essential, as Julián said, to – for other countries, including in Europe and elsewhere, to keep their cool. To recognise that, if anything, what we learnt in the first Trump administration, it seems to be an initial lesson, we’ll see, because Trump is more unleashed now, of this second term, is that you have to stand firm, that you need to give Trump some wins. And he will respond to symbolic wins, like what Canada and arguably Mexico, offered just to get this 30-day extension. And you need to be working the US political system at all levels, national, state, local, industry, labour, stakeholders, continuously. And it means a exhausting job of whack-a-mole, an exhausting job of trying to identify problems before they emerge and dealing with issue – crises to try and manage them.
Both Canada and Mexico did a very good job in the first Trump term, we came out with he – him threatening to tear up the NAFTA with a new agreement, that from Canada’s point of view at least, preserved many of the really core vital interests for Canada intact. We were able to get an exception on the steel and aluminium tariffs. That was the playbook the last time around, but there is a concern that this isn’t like the last time around, which is why there’s a new conversation in Canada about diversifying trade relations, that we – that is more intense now than I think we’ve seen for many decades in this country.
Dr Leslie Vinjamuri
Julián, as you prepare to answer this question, can I also insert one more, which is, have you been surprised? I mean, you know, you’ve been dealing with the United States diplomatically, not only Mexico, but you personally, as a leader in Mexico’s Diplomatic Corps. And when we visited you and you took us around to meet many people in and out of government in Mexico, there was such a extraordinary sense of knowledge, pragmatism, stoicism, in the runup to – at that time, we didn’t know who would win the election, but there was a lot of conversation already about what if Donald Trump returned? Since, you know, in the context of everything you’ve said and are going to say, have you been surprised by this, or is it just, you know, kind of, more, but as expected?
Julián Ventura
Well, navigating US-Mexico relations has never been an easy task. There’s never full alignment or full convergence on many issues. Mexico and the US had a very difficult challenge in reconfiguring, for example, the bilateral agenda after 9/11 which transformed the way, you know, the national security vision of the US, which thickened our physical border in many ways. And which we had to find and be very creative and very cool headed in making sure that the facilitation that was necessary on the trade angle would not impinge on that national security priority, which was radically transformed after 9/11.
I can’t say I’m totally surprised, because a lot of these things were signalled very clearly over the campaign. I think there’s a sense that it’s never going to be easy, that you have to find ways to be practical, because we can’t move to another region of the world. I mean, we have to deal with some very, very tough issues. Unfortunately, sometimes we’re distracted by challenges more than having a, kind of, longer strategic vision that could definitely strengthen Mexico, Canada’s and the US’s international position, but it’s always been a tough balancing act.
On tariffs, I think it’s going to be the word of the year for the next four years, it’s going to be the litmus test, and it’s going to be tied onto other issues. You mentioned Europe, they just had their European Union – informal dialogue in the European Council at the beginning of this week, which was focused on defence. So, maybe we won’t be talking in Europe about fentanyl and border security, but we might be talking about European defence commitments, or access to, you know – more equal tariff access to some important American experts. There’s already talk about the global minimum tax that was agreed to by the G20 a while – you know, a couple of years ago, is, you know, fell – is going to fall over by the wayside. So, everybody’s going to have to scramble without no clear alternatives.
In the case of Mexico, and the case of Canada, as well, decoupling is not an alternative, but diversification signals something positive. \it opens new windows to other places or it expands other ones. Even in a worst case scenario where you get rid of USMCA, which I don’t think is going to be the case, Canada and Mexico are bound by the Trans-Pacific Partnership Agreement. The EU and Mexico announced a few days ago the conclusion of the modernisation of their global trading agreement. So, there are various platforms where we need to have that, kind of, a more open, less parochial, world view, and also to keep options open for our exporters and for our producers. But there’s no alternative to the North American space, I think it’s a source of strength in many ways.
And on the expansionist tendencies that we’re seeing now, it’s a very Latin American issue. If you look at history, I think a lot of people were surprised in the inauguration where President Trump didn’t really address global challenges for the US. It was very much a North America, Western Hemisphere focus. Secretary Marco Rubio’s trip was not to NATO headquarters, was not to his Asian allies. Yes, there was a Quad ministerial meeting on the eve of the inauguration, but his first trip was to Central America and the Caribbean, clearly trying to make an explicit link between President Trump’s benchmarks and foreign policy priorities to what the Department of State is going to go – is going to be doing going forward. So, it’s something also to keep in mind, a Western Hemisphere focus that we haven’t seen perhaps since a former Texas Governor, George W Bush, held the US Presidency, where he said that the US most important relationship was going to be the relationship with Mexico. And of course, 9/11 dramatically changed that view.
Dr Leslie Vinjamuri
Well, I mean, that’s a very important point, because, of course, we have all sorts of conversations now about what’s coming next, and we don’t – you know, the –we know that there are wars and possible conversations about those, but we don’t know what the ‘events’ might be. Donald Trump had COVID in term one. That certainly wasn’t something that anybody saw coming. I’m going to ask Anar, Anar Bata, very well known to anybody who works on – with us, here at Chatham House, to read out one of the first questions from the audience, by…
Anar Bata
This question is from Makram Soua, who writes, “Thank you for this invite – insightful conversation. In the remarks, the Western Hemisphere was mentioned. Was this referring to the North-Western Hemisphere or the Global Western Hemisphere, including Africa and Latin America? If the latter, can you elaborate on the potential effects of President Trump’s decision, if any, on Africa and Latin America?”
Dr Leslie Vinjamuri
A great question that, kind of, opens up an opportunity to talk about the broader implications for Africa, Global South. Julián, would you like to…?
Julián Ventura
Well, I think when I was referring to ‘Western Hemisphere’, I was referring to the Americas in many ways, but it does have a cluster bomb effect, you know, expansionist impact. We saw, for example, how Marco Rubio just announced that he won’t be attending South Africa’s G20 Foreign Ministers meeting, which is scheduled for the tail-end of February. There’s a lot of concern about the radical restructuring of the US Government that is taking place now, that has significant implications for international US co-operation in a continent, the African continent, which was tremendously hurt by the COVID pandemic, and in which various imbalances and inequalities were top of mind.
I think there is a risk that the approach that we’re seeing tends to solidify a more antagonistic vision from what is a very amorphous Global South. One of my hobby horses, one of the things I always underline, that this is also an opportunity to be creative and to build bridges, and it’s something that South Africa’s going to have to do, with key members of the European community, of the Asian community, to find a bandwidth, however narrow it is, to keep a co-operative approach to common challenges alive. And that’s going to be very important over the next four years.
Professor Roland Paris
Let me just…
Dr Leslie Vinjamuri
Yeah, please, Roland.
Professor Roland Paris
I think it’s re – you know, the attitude that the Trump Administration is projecting to the whole world, including the Global South, is, what have you done for me? And that’s reflected in, you know, the decision to – of Marco Rubio not to go to the G20 meeting, like, what do we have to gain? And the pretty dramatic changes we’re seeing at USAID, I mean, that might even understate it. Whether we will see a USAID in the future, you know, with more than two/300 employees is a question mark.
And it’s really in contrast to the Biden administration’s policies and very shortsighted for the following reason, because the Biden administration came in saying that it recognised the importance of building and strengthening relationships with countries around the world, because of the changes that are taking place in global politics right now. You know, there is a competition going on for influence around the world. China has been working that very hard for decades, with considerable success, in Africa, in Asia, in Latin – and increasingly in Latin America, even – including in the Caribbean and Central America. Russia has been also gaining in this competition, which might come as a surprise, given their unprovoked invasion of Ukraine. But if anything, that’s a sign of how the – how much the world has changed.
And so, part of the approach of the Biden administration and the G7, and others, was to try to strengthen these relationships in the Global South, including by doubling down on infrastructure investment. I don’t see the Biden – I don’t see the Trump administration having much interest in the way that it views the world in infrastructure investment, in emerging economies or middle powers of the Global South. And it is fundamentally, I think, harmful to America’s interests, but it is what it is. It’s a reflection of a particular view of the world and the rest of us are going to have to try to make up for some of what’s going to be missing.
Dr Leslie Vinjamuri
It is – you know, it’s a very important point, especially in light of, you know, our assumption, which, you know, we’re still collecting data, so to speak, as – on the fact that the Global South strategy is intended to be part of, you know, America’s geopolitical competition, with its, you know, greatest challenger, i.e., China. I would also note, as I’m sure you know, that after four years of successive leadership by Global South countries, and South Africa being the fourth, the United States of America in 2026 will be leading the G20. So, you know, this decision not to go to the G20, kind of, blocks that transfer of knowledge on what has, you know, been the agenda over four years. There’s been huge amount of lessons learned and sharing across those four countries. And so, I think there’s also, you know, a broader question about the future of the G20 as a convening and, you know, co-operative mechanism.
Professor Roland Paris
Even the G7, Leslie, Canada’s hosting the next G7 leaders meeting in June. It’ll be very interesting to see what the invitation list is for that meeting.
Dr Leslie Vinjamuri
Right, and are you considering not inviting the United States?
Professor Roland Paris
Oh no, no, that’s not what I was implying. I was – the recent G7 meetings, there have been, you know, developing countries…
Dr Leslie Vinjamuri
Countries that…
Professor Roland Paris
…and major countries in the Global South have been invited, you know, to parts of those events. I’m not sure how the Canadian Government’s going to handle that.
Dr Leslie Vinjamuri
Very interesting. I mean, you know, one could argue that the logic is to invite more, right? If the idea is to build up like-minded states to diversify, then it would be a shame to see the backing off of that agenda. Anar, I’m going to come to you, ‘cause I know that there are at least two questions on Greenland.
Anar Bata
Thanks. Trevor Clarke writes, “How does the aggressive territorial claims of the Trump administration regarding Greenland and Gaza match Russian’s land grab in Ukraine? Do Canada and Mexico feel it is safe from US exploration?” And alongside that, John Mulhern asks, “Do you think we will see American Army boots on the ground over Greenland?”
Professor Roland Paris
Should I go first?
Dr Leslie Vinjamuri
Let’s let Julián – go…
Professor Roland Paris
Okay.
Dr Leslie Vinjamuri
…yes, please, Roland. Roland.
Professor Roland Paris
Okay. I don’t think there’s any chance of a US military invasion of Canada. I think they – I don’t think there’s really much chance of a aggressive US military action in Greenland, and – but – and to come back to the first question, “How do you compare this to Russia’s invasion of Ukraine?” Well, of course, the fundamental difference is that the United States hasn’t – you know, Trump has talked about it, but he hasn’t actually violated the sovereignty of Greenland, Denmark, Canada and Panama.
Now – but the principles echo those of the rationale that was provided, in effect, by Vladimir Putin for his invasion of Ukraine. And the principle was – that we heard from Vladimir Putin, was that Ukraine’s not a real country, and therefore, you know, it doesn’t really deserve the protections, the legal protections of sovereignty, territorial integrity, political independence. And the implicit argument was that powerful countries should be able to dominate their neighbours, which is a spheres of influence logic. Now, spheres of influence aren’t new. We’re not – and certainly living in – anyone living in Latin America, this is a, you know, front and centre part of the history of the region, but we haven’t seen it recently and expressed as crudely as Donald Trump has recently expressed it.
I see the risk less of American invasion of these terri – North – of these North and Central American territories, and more that he is providing a rationale for other countries to be able to say, “Look, the United States agrees with the logic. Don’t accuse us of in – of doing something wrong, if we’re claiming the entire East and South China Sea,” as China has done, “or we’re,” you know, “claiming to have a rightful suzerainty over Ukraine.” So, that’s where I see the principal danger here.
Dr Leslie Vinjamuri
Julián?
Julián Ventura
Well, in the true spirit of Cana-Mex partnership, I fully agree with Roland. I think it’s part of this disruptive wave that we’re going to be seeing. I think partners in Asia and Europe are going to be looking at this closely as a very difficult situation with China plays out. I think we’re going to see a lot of continuity and a hardening of that competition or rivalry, and that’s something that is concerning Japan and Korea, for example, which bank on predictability, and which also have significant economic stakes in their interdependence with China. So, whether it’s Greenland or concessions in the Panama Canal, or US positions on territoriality in international waters, or it’s expansionist actions by China, really are not going to have a tried and true playbook going forward. We’re going to be surprised, and we’re going to have to be reactive in many ways.
Dr Leslie Vinjamuri
There is this broader question of, you know, which – for the four years, or at least for the last few years of President Biden’s administration, it was very clear that the focus was on China, and right now, it’s just a little bit unclear. You know, is it hidden behind some – you know, is it hidden behind the border question with Mexico, and obviously fentanyl’s the path in? Is it hidden behind the Greenland question, the Arctic? Is it hidden behind the Pana – I mean, it is a qu – or is it actually going to rise to the fore? So, we are clearly going to have to talk a lot more about where China sits in all of this, because it’s, sort of, been quiet, but we’re not going to do it right now, ‘cause there’s one last question that Anar’s going to read out.
Julián Ventura
One quick thing, just your viewers and listeners should keep an eye out for a Xi Jinping-President Trump phone call over the next few days, and I would make a pretty good bet that he’s going to be in China over the new – next few months for a bilateral visit.
Dr Leslie Vinjamuri
And that it’s going to go well?
Julián Ventura
Well, there’s going to be some dealmaking involved. It won’t change the dynamics in terms of that competitive streak, but the art of the deal would want to prevail.
Dr Leslie Vinjamuri
Thank you. Okay, one quick last question, and we’ll use that as an opportunity to give each of you to give us some closing remarks, ‘cause it’s a great big question.
Anar Bata
This final question is from Christina DeCoursey, who writes, “Geopolitics are breaking the world into fragmented, self-serving, semi coherent political blocs and trade relationships, in a, sort of, unevenly expanding free for all. What will it take in a world facing climate, AI, tech, refugee, food security and healthcare challenges, to achieve the international coherence necessary for basic rules-based co-operation?”
Dr Leslie Vinjamuri
And I might add and, you know, what part will Canada and Mexico be able to play in that? So, let’s start with you, Roland, closing remarks, about a minute, we’re at time, and then you, Julián.
Professor Roland Paris
Yeah, well, firstly, let me say thank you for the opportunity to be part of this really interesting discussion. What will it take to avoid this continued fragmentation which is making it so much harder to deal with some of these global problems? I’m afraid to say, it’s going to take enlightened leadership from major countries to recognise that if they all behave as though international affairs is just a zero sum game, then they, in the end, might get a little better off than another country or who knows what the actual balance will end up being, but all – ev – but the entire system will be worse off.
We’re living through a period of incredible change, on multiple levels. We’re seeing a technological transformation, in the form of AI, that’s going to upend many economic sectors. It has very significant potential defence applications, as well. And we’re seeing a power transition, which is the movement from what had been a more or less unipolar order with the United States as the dominant power, to a more mixed order, and those transitions in history, have always been tumultuous. And we’re seeing the effects of a tumultuous political environment within many of the countries that had been part of the US and affiliated erstwhile core of that unipolar or – so these are multiple, complicated transformations taking place.
Now, in the past, the moments of power shift that have been managed in a way that hasn’t led to more – even more destructive outcomes, have been those moments in which there’s been leaders who have recognised that they have, yes, an interest in advancing the interests of their own country, but they also share an interest in trying to prevent the system from exploding. And so, we need to have more mature leadership that recognises that national self-interest includes an interest in the stability of the system as a whole.
Dr Leslie Vinjamuri
Thank you. I appreciate that, and I note you down as an optimist of sorts, kind of, to the…
Professor Roland Paris
I – what – do we have a choice?
Dr Leslie Vinjamuri
If you have a choice.
Julián Ventura
No choice at all, you have to be an optimist.
Dr Leslie Vinjamuri
Okay, yeah, oh, I like that, I like that.
Julián Ventura
You know…
Dr Leslie Vinjamuri
Julián.
Julián Ventura
…just to close, you know, I think the jury’s out on the prospects for rules-based collaborative approaches and co-operation. I think in way – in a way, before Trump, we’ve seen a hit on these dynamics, whether we go from Ukraine to Gaza, to the vigour of some multilateral mechanisms. But it’s going to be taking, as Roland says, enlightened leadership, at a time when governments and leaders are going to have to focus, as well, on dealing with the big changes in the US. So, how to keep a balance between a global strategic perspective and the day-to-day management and risk reduction of the very important relationship with the US is going to be a challenge.
And I think that sometimes when we look at the global picture, North America tends to get – you know, a lot of the issues aren’t sexy in terms of what is happening in – regarding international conflict, or geo-strategic issues. But in many ways, the way North America is being rewritten right now is going to give the broader world a pathway, or a look into a pathway, of navigating the – a much more complicated world in the next few months and years.
Dr Leslie Vinjamuri
Thank you, I appreciate that. It – I hope that the lessons can be learnt, because so far it looks like things have been managed quite well by the US’s North American partners. But there isn’t a war in North America right now, and there is a war in Europe, so the stakes are phenomenally high as we begin to look a little bit further east. This has been tremendous. I am very, very grateful, not only for this webinar, but, Roland and Julián, for all your ongoing participation, now over several years. You cannot have a US and Americas Programme, obviously, without all of Latin America, but you certainly can’t do North America well, especially now, without you, Roland, and you, Julián, and you give tremendously of – on the back of tremendous experience. So, thank you very much, and thanks to everybody for having joined us.
Julián Ventura
Thanks, Leslie.
Dr Leslie Vinjamuri
Have a great weekend, and…
Julián Ventura
Good to see you, Roland.
Professor Roland Paris
Thank you.
Dr Leslie Vinjamuri
…certainly a chilled one, but I don’t hold out any hope for that.
Julián Ventura
Won’t be boring.
Dr Leslie Vinjamuri
It won’t be boring.
