[music]

Hello listeners. Welcome back to

Geopolitical Cousins. Sorry for the

brief delay in getting content out. Uh

mostly my fault cuz I had to I had some

stuff that I had to deal with last week

which I will not bore you with. Uh we're

back on the train. We devoted the whole

episode to Canada because it's that

important. Uh you can email me at

jacobjiro.com.

Any questions, comments, concerns. Uh I

think that's the housekeeping. We should

be back on on track next week for our

cadence. Uh, okay. See you out there.

[music]

We're back at it. Um, and it's not like

anything's going on in the world, is

there, cousin?

>> Oh, no. It's it's nice and and calm. In

truth, uh, until the basketball season

starts, I do have a lot of a [snorts]

lot of time on my hand. Although, I I

did enjoy watching some, uh, World Cup

qualifier highlights. I will tell you

that.

>> Well, good for you. Canada game in

Quebec City was uh was fire as was

Serbia. Those were those are some fine

fine basketball watching.

>> Um well, I'm glad you I'm glad you

started there though because uh we we

meant to talk about this last week and

people have been writing to us asking

about it and you were just in Canada. Um

I would also point out, you know, I took

a victory lap on the Venezuela regime

change. I uh I need to take whatever

what is I need to eat some humble pie on

my prediction that the USMCA would be

renegotiated swimmingly after some

mellow drama and you know soap opera

relations between the US and Canada. Uh

it's not going that way. I mean I guess

it still could like maybe you're going

to tell me that we're at stage seven or

whatever of uh Trump's art of the deal.

Uh but sure seems like there's a hu a

pretty big rupture in US Canada

relations. Mark Carney called his

negotiators home. We've got tariffs from

the United States on Canada. We've got

retaliatory terrorists from Canada

against the United States. We've got

Mark Carney visiting the EU and people

talking about, oh, is is Canada going to

be the next country in the EU? That

there's a lot to break apart. So, where

do you want to begin with this cousin?

Because you are you're you have a dog in

this fight. You uh you're a Canadian

citizen. So, how do you feel?

>> I am. Yes, I'm a Canadian national. Now,

obviously, I'm also a nihilist and can

approach this analytically and uh

dispassionately. Um, I guess we I should

also offer to eat the humble pie the eat

some crow with you. So, I I'll put my

bib right next to yours because I too

thought that President Trump could read

polls and could see that uh Americans

don't want a trade war. They wanted one

in 2016. They did. He got that right.

Hillary Clinton got that wrong. He won.

He pursued one. That was popular.

Americans

according to polls did feel that trade

was unfair against him in 2015 2016. But

the irony is that he kind of fixed that.

The support for globalization rose. The

support for trade rose amongst both dem

Democrats and Republicans by the way

after 2015 161 17 because he delivered

what the median voter wanted which was a

trade war against China and uh that's

not what they wanted last year. So

liberation day was liberating Americans

from something from a yoke they actually

enjoyed but fine you know maybe he had a

bigger vision that we're all idiots and

then um that hurt him in the polls even

though I could argue that 10% you know

tariff also known as consumption tax may

be a responsible way to tax America a

little bit more. So let's leave that

aside but that's like kind of recounting

what's happened. And so this year why

have a trade war this year? you've

already raised tariffs. They were struck

down by the Supreme Court. You found a

different way to raise them. So I think

for the um for the remaining 10 20

years, I do believe America will

continue to tax imports at basically

10%. I think that's like that's going to

be here. Supreme Court will eventually

say that they eventually did find a

piece of legislation that does allow

them to do that. I think the US bond

market demands it. I think American

citizens are capable of paying it. It's

fine. Other countries have VAT. It's

fine. Whatever. You know, let's let's

let bygones be bygones. But wide open

the can of worms against America's uh

northern neighbor. I think that

politically this is not going to work.

You know, it's not in any way, shape or

form popular. And in fact, it is quite

um it is quite dangerous because exports

to Canada as percent of total um you

know are really really large for some

very important countries. It's about 40%

for Michigan. It's a little bit less for

Ohio and Wisconsin. Uh West Virginia,

bizarrely, super dependent on Canada.

And then you've got some countries, uh

some states like, you know, Montana,

Idaho, I mean a little less relevant

obviously. Uh the Dakotas where it's

like 80%, but you know, Montana Senate

race is pretty close. Michigan is like

beyond close. Ohio shared Brown's ba

back, baby. the younger younger Bernie

Sanders, you know, uh by younger I mean

like in his 70s. Um these are, you know,

West Virginia has flirted with blue dog

Democrats before. Like why imperil

yourself? Oh, Iowa is up there too

pretty pretty high. Maine, Maine, I

believe there's an important Senate race

in Maine. These are all states that

depend on Canada more than Canada

depends on US by the way. So, um it is

it is um an own goal by the Trump

administration. Uh but we don't want to

talk about that. We don't want to talk

about why necessarily we got this wrong

or why Trump got this wrong. I think we

want to talk about big picture, right?

Like why is Carney striking back? Is it

stupid? Is it a bad idea? And who's

going to win the trade war? I think

that's and what does it mean, right?

That's what we want.

>> Let's talk I think I think we got to

talk about all of it. I I think we can't

leave any of it uh any of it aside. I

mean, where do you want to begin?

[snorts]

>> Well, look, uh,

I'm liable to go on a rant that will

last a long time because I've thought

about this a long time. So, I actually

want to maybe What is a podcast besides

having a rant that people want to listen

to? This is the whole Go for it.

>> So, you want me to start?

>> Yeah, go, please. I'm putting

>> This is new and improved Marco who

doesn't interrupt you. Although, I am

literally interrupting you right now.

>> [laughter]

>> Don't listen to the blog boys on the

internet who are mad.

>> I'm about opening the door for you.

[laughter] Like Jacob, would you like to

go first? All right, fine.

[clears throat]

>> No, you you you're the Canadian. You you

should go first and then and then I'll

I'll reign you in when it's time to

reign you in if you're going in too

long.

>> Okay, I think that's fair. All right, so

first and foremost, uh for all the

American listeners who think like, well,

obviously America wins this trade war.

Um, those are the words that could have

been uttered about American war against

Vietnam, about Russia's invasion of

Ukraine, about US war in Iran, and a

slew of other conflicts. When you have

two conflict parties in a conflict diad,

and you're trying to set up a game

theory to figure out who's going to win,

you cannot just do a simple order of

battle. You cannot simply say well you

know Russia has this many tank divisions

and Ukraine has this many a very

important that's one of them by the way

that is one of the things you have to

look at of course of course like Granada

cannot defeat the United States of

America in the short military conflict

between the two countries that no matter

how much risk tolerance they may have

but risk tolerance is just as important

as material power and when I shop at HB

in Texas which is supermarket. When I go

and I buy some goods, I don't see little

American flags next to everything

because apparently Americans are

perfectly fine buying Mexican avocados.

Like, you know, there's just no popular

support for restructuring global trade.

There just isn't. Yeah, I understand

Steven Mirron wrote a very sophisticated

57page

PDF on this. I understand Scott Bessant

is now behind this and everyone's tried

to articulate these super complicated

reasons why the US should um narrow its

trade balance, but you know what? I

don't see the person on the street of

America really giving a [ __ ] Now, this

is a fact, guys. I'm sorry. Backed by

Paul's and backed by my experience as

someone who lives in the US and goes to

shop at Walmart, Target.

Now, go to Canada. In Canada, Canadians

are like rabies infested beavers right

now on this issue. Okay? [laughter]

You go to a liquor store and you're

like, "Do you guys have some bourbon?"

You get thrown out. It's called Canadian

whiskey.

There is no bourbon. Okay? There's no

Kentucky bourbon to buy in a Canadian

liquor store right now. Not zero. And

supermarkets have little Canadian flags

like next to Canadian products. This is

not governmentmandated. This is what I'm

trying to say to you folks listening.

There's no government mandate to like

put Canadian flags next to products.

Canadian consumers are demanding it. And

so when I think about risk tolerance,

Canadians have far greater risk

tolerance, which in a game theoretical

kind of a world really matters. In other

words, to simplify for those of you who

are not like game theory fans, there's a

phrase that we have in the English

language for this. It's not the size of

the dog in the fight that matters. It's

the size of the fight in the dog,

>> right? And so

>> you you you've only been in Texas for

like a couple months and here we go with

the with the folksy apherisms. I love

it.

>> Hey man, absolutely. You know, uh all

hat, no cattle right here. Um

>> there you go. There you go.

>> I'll have more throughout the podcast,

but I think this is really important to

understand because now obviously the

counter to this is like, whoa, whoa,

whoa, whoa. pump the brakes in this

buddy. Like if President Trump were to

impose a 100% tariff on all Canadian

products, like hundreds of thousands of

Canadians will lose their job. Tell me

then how willing they are to incur this

fight. And my answer will be probably

even more. Not forever,

but Mark Cardi doesn't have to wait

forever, baby.

Two years. Like what are we talking

about here? He just needs to wait out

Trump and he's got an ace

up his sleeve that I think we need to

explain which is fiscal space. Yes,

Canadian debt to GDP is 100. So it's not

great. Canada's got a lot of debt. But

from a deficit perspective, it's about

1.7% GDP. And so what Mark Carney is now

calculating is like this is amazing. I

get to fight this war. I relish

President Trump imposing pain on my

voters because then they're going to be

pissed and they're going to be behind

a very complicated effort to rebuild

Canada's infrastructure, which is what

the country woefully needs. And so, and

he can dip into the deficit and do so

without the market blowing up on him,

without voters saying, "You're spending

like crazy." No, I'm spending on

productive infrastructure, whether it's

new pipelines to new markets, whether

it's new refineries, whether it's

expanding hydropower capability, you

know, it's all sorts of things. So, I

think that this is a calculated gamble

by Carney to have a war because he has

some fiscal space. He would like to use

it. He would like to use it in kind of

long-term positive ways. It's good for

Canada

and it solves some of the debates that

have been tearing Canada apart. We'll

talk about secessionism later, but I'm

talking particularly like Alberta has

all the energy. British Columbia doesn't

want to transport it anywhere, you know,

because like because climate change and

it's like look guys,

the Chinese are going to just buy uh

burn coal, so why not give them natural

gas? Like, you know, so those debates I

can tell you are dying. I mean, Mark

Carney as a prime minister of Canada has

been prime minister for a year now. I

mean, he hasn't uttered deter climate

change. I haven't heard him talk about

it at all. And it's not just him.

British Columbia run by the NDP. I

believe the Social Democratic Party has

been, you know, like, hey, you know

what's more important than climate

change right now? The fact that

Americans are engaging in a trade war

against us. So, it is unifying the

country in a direction that is very

positive because Canada's biggest

problem as a country is that its

infrastructure is laughable. And that's

because you have 40 million people, the

population of Spain, spread out over the

entire northern hemisphere for God's

sakes. It's it's enormous.

>> Largest it's it's the largest land

border in the world, which which I will

come back to later, but yeah, it's it's

a very thin layer of population across

the entire northern.

>> There's one highway. There's highway

one. Highway one. Like to those of you

who don't know Canada, no, I'm not

joking. There's a highway. It's called

Highway One. Goes from Victoria, British

Columbia, all the way to the Maritimes.

And that's the one highway. That's it.

It's one. And by the way, there's parts

of it that like are impassible. The

border between British Columbia and

Alberta. Good luck. Driving Highway One

in the winter. Like, I mean, this is

this is a country that has, you know,

like when you think about things we had

to worry about in like the 19th century,

early 20th century, like, oh, can we go

through the mountain pass? Like those

those words are not really used in

America unless you're going to mammoth

to ski, you know. But if you had to go

from California to Oregon, you're not

worried about whether it snowed in the

mountains. In Canada, you do. There was

this one incident when uh the Canada one

of the bridges collapsed on Highway 1

and all of the food trucks and materials

had to be rerouted through the United

States of America using America's

interstate systems. Like these are not

ideal solutions. Canada has an immense

amount of infrastructure development.

But because it's a super progressive

liberal place that's very pleasant to

live, it has about as much nimiism, not

in my backyard, as any other country in

the Western world. It's difficult to

build dirty, naughty things like

refineries. Canada has some incredible

resources like a lead smelter that also

refineses rare earths by the way in

Trail, British Columbia. Um, you know,

these things are very difficult to

upgrade, very difficult to add

capability to because they are dirty.

And then, so what you need is Donald

Trump to do it. And I think Carney, this

is the reason number one, most people

say he's trying to defeat separatists.

He's an idiot. No, no, no. What he's

trying to do is this. I've got fiscal

space. If I just used it, people would

be mad at me. I'm blowing out the

deficit. If I used it to advance

Canada's ability to develop its natural

resources, all the liberal greenies

would be against me. But you know what

they hate more than fossil fuels? Donald

Trump. And so he's unifying the country

around this really important

infrastructure development, which I

don't think Canada's really done since

the Quebec sovereigntists built the

hydropower capabilities of Quebec back

in the 70s. You know, Robert Barasa and

others. um although he wasn't like

really a nationalist, he was more just a

sovereigntist and and so some really

good things happen when the government

says no no no we're going to be more

sovereign we're going to kind of release

the yoke. So that's my first point. The

second point is yes, there are threats

of Quebec separatism. Uh Party

Kebeekqua, he's likely going to win the

Quebec uh provincial election. Um has

been talking about the referendum, which

is of course idiotic because the support

for Quebec independence is the lowest

it's ever been. Good. Keep it that way.

And that's why Mark Carney has been

using this phrase for those of you who

are not Canadian.

It's a very important French phrase that

the Quebec sovereigntist used in their

silent revolution against the

angophones. Metenu means masters of our

own house. We're not going to let an

angophone minority be masters of Quebec.

That was the silent revolution. And

what's funny to me is how Mark Carney

has adopted this. And I had some time in

Montreal asked some of my Quebecqua

friends who, you know, vary in terms of

their views on sovereignty. And you

know, they're kind of like, "Yeah, that

was that was pretty good." like, you

know, like I hate it and I don't like

the fact that he's doing it. His accent

sucks, but you know,

>> I I think this is I think this is one of

the biggest I think this is one of the

biggest things because we get and I get

the occasion whenever we praise Mark

Carney and Mark Carney was our number

one on our geopolitical leaderboard

early this year when we did our

geopolitical draft. And I've gotten a

few emails that are like, "Oh, come on.

Mark Carney sucks. I don't like Mark

Carney. He's one of these globalists who

was just trying to blah blah blah blah

blah." But the the polling data just

doesn't reflect that. I mean, there's I

have an Angus Reed poll that I'm looking

at that says that 76% of Canadians said

that they support their government

ending trade negotiations without an

agreement with the United States. And I

think I told you on this podcast months

ago, back in January, I was in Manitoba

at a speaking at an agricultural event.

This is not Mark Carney. And I didn't

hear a bad word about the man. And this

is before Davos. This is before, you

know, a lot of the fireworks of the last

couple of months. I got to think that

that has only increased over time. Now,

to your point about pain tolerance, I

think you're exactly right that it's

about, you know, who can stay in the

fight longer and maybe Carney doesn't

have to stay in the fight more than two

months because if we get to the midterms

and the Republicans are going to lose in

the Senate big because they've made

these mistakes in places like Michigan

or Maine or Alaska where suddenly all

the polls are looking a lot more

delicious. uh if you get the House and

the Senate now making laws about what's

going to happen or you know restricting

the ability of the executive to do these

things with tariffs I think that's going

to be a bad thing but to your point it's

nice that today there is 76% support for

Carney um I don't think we should put

too fine a point on just how devastating

this will be for the Canadian economy in

the short one in the short run if we get

a real escalatory trade war I mean the

United States is by far Canada's largest

trade partner um I had the data right in

front of me 73% of Canadian exports uh

went to the United States. To your point

about infrastructure, it's not just

highways. All of the export

infrastructure points to the south. It's

to get things across the border into the

United States. Some absurdly high I

think it's close to 98% of Canadian you

oil exports go to the United States

because that's where the infrastructure

goes. This is going this is important.

>> Well, hold on. I you can get to it in a

second. I'm just going to say it's going

to manifest as a serious growth shock

for can for Canada over the next couple

of years. And it's not just about Carney

being able to use fiscal space. Um he's

also alluded to this where he wants

Canadian pension funds to invest in

Canada and he wants Cana, you know,

Canada's the second largest source of

FDI in the United States. He wants all

of that investment to come back to

Canada and build Canada up. And if he

can do that in 5 years, he'll be in the

Hall of Fame of our geopolitical draft

leadership board. He's doing something

that's really hard. um it's going to be

less impactful from the US from a growth

perspective. But I just I just I really

want to emphasize something you said

about you know whatever number the

tariffs or percentage the tariffs end

at. The Trump administration is raising

taxes on the American consumer by doing

this. And so what is going to be a

growth shock in Canada is going to be a

consumer price shock in the United

States. And I think you're right that

probably the average American citizen

gets angrier at this administration

before the Canadians get mad at Carney,

even though the Canadians are going to

bear a lot more of the brunt of the pain

here in the short run. But if we're

playing devil's advocate, I would just

point to a Yuggov poll that came out

just earlier this week that showed that

now 38% of Republicans view Canada as

unfriendly or an enemy of the United

States. That number is historically

around 5%. Democrats are at 8%. The

Republicans have gone from that 5 10%

range to 38% just over the past two to

three years. So don't discount how how

much this top-down Trumpism propaganda

machine can create a movement in the

base that actually wants these things.

And I would just go back to, you know,

VBER's definition of charisma is the

capacity to get people to vote for

things that are not in their

self-interest. If he can pump up those

numbers a little bit more, maybe we're

talking about Trump's wizardry and

charisma and he'll outlast Carney. But

okay, go go go where you want it to go

with the oil export infrastructure.

>> No, actually I want to I want to react

to everything you're saying because it's

very important. So let's leave the US

long-term

Canada sentiment for for the end because

we have to spend like 30 minutes on

that.

Um and that's and that's critical and

I'm glad you brought that poll. Um, so

first of all, 70% of Canadian exports go

to the US. You're correct. But 70% of

that is impossible to tariff.

Like like

the United States of America can put a

400% tariff on Canadian oil. They're

going to buy it.

So the impact on Canada's GDP is

>> I don't know, Marco. We we uh Venezuela

is now really the first state or

whatever it is or

>> and eventually maybe

>> you know eventually. Yes, you're

correct. Maybe. In which case, of

course, this oil will get out via

British Columbia or via Hudson Bay as

the world warms up and Alberta will get

its oil to the market. It's not going to

be stranded forever. But like the point

is when when media cites the figure that

Canada lives off of America, it's

important to understand that Americans

are not like out there buying Canadian

like I don't know, consumer electronics.

They're mostly buying stuff that

Americans have to buy from Canada

because it's things that go into their

engines and their factories and their

homes as electricity. So 70% of Canada's

exports to the US are hydropower from

Quebec. Like Northeast cannot live

without that.

It's natural gas, a little bit of it,

and then mainly oil. So that's why the

impact to Canadian GDP, Jacob, is going

to be incredibly smaller than than the

worst case scenario. But but the 30% of

Canadian exports that are not energy,

lots of human beings work on those jobs.

>> Mhm. You know, so yes, the the current

impact, just to be clear, President

Trump, although his rhetoric towards

Canada has gone really mean, he did only

tariff in this latest tariff, 20% of, oh

no, 5% of Canadian exports. 5% of

Canadian exports have been

touched with the additional tariff. So

in a way, Mark Carney, I know Mark

Carney has a bigger plan because he's

making mounds over mole hills. Yes, I

know. I mean, you you you have said this

continually on the podcast and I think I

think you were dead on I mean, Mark

Carney will be sending Donald Trump a

thank you card and a Christmas card at

the end of the year for allowing him to

do this because there is no other

universe in which somebody like Mark

Carney gets to even attempt something

like this, let alone have it look

realistic to two analysts like you and

me. Now the Canadian government has

leaked to the press that Howard Lutnik

added all sorts of conditions like

French language

has to be subverted in some of the

regulatory rules, cultural things like

things that impacts Canadian sovereignty

like America will have a veto over

Canadian free trade negotiations. Like

those are ludicrous. But I almost think

that like maybe Canada is lying

>> because

>> well I I mean to to steal to steal a

phrase from you, let's double click on

that for a second because I'm glad you

brought that up as well because I have

no trouble believing that Howard Lutnik

came in at the last minute and said some

crazy [ __ ] I'm sure he did. Um also

like they wouldn't let that scuttle the

negotiation if they thought they were on

good terms. They would be able to push

through that. But based on what I've

been able to figure out, the one,

>> you know, there's a lot of smoke there.

The place where there is fire is

Canada's future relationship with other

countries in terms of trade and

especially China. And it seems like the

United States was pushing for some kind

of veto on Canadian trade with China.

And then also was not willing to make

ironclad commitments about its trade

relationship with Canada, that it was

going to be a moving target and that the

Trump administration was going to decide

how, you know, based on how things were

going, maybe we'll reduce some tariffs

or we'll do some things here. And that

is a really serious um like there's no

way that Canada's going to accept that.

That's also you can imagine and this is

the rejoinder you get from folks who

think that the Trump administration has

a plan here which is well of course if

this is going to be the North American

free trade arena and market then Canada

is not allowed to trade with China and

the United States is overwhelmingly the

dominant military economic power in this

relationship. So, of course, the United

States should have this power, and

Canada's going to learn the hard way

that eventually it's going to have to do

what Mexico has done, which is you want

tariff, how high do you want tariffs on

Mex uh on China? Great. Like, we'll do

it 50% or whatever it is that the

Mexican government um has raised. Um and

I and I think it's an interesting

rejoinder to what we're talking about.

It's the one that's most compelling. I

think it goes back to the pain tolerance

thing. I think even if you grant that

the Trump administration is thinking

that strategically and for the record I

don't but I'm engaging the opposite side

of the argument but let's grant that it

is tactically it's a mistake because it

goes back to what we're talking about.

Carney is going to take that and say

okay I'm going to build Canadian

infrastructure

>> and I'm going to figure out how to trade

with China and I'm going to figure out

how to trade with Europe all because you

treated me this way. And if you look at

the the the broad swath of Canadian US

history, like the periods in which the

US and Canada had good relations were

not the periods where the United States

was threatening Canada. Those were those

periods didn't end well for the United

States. The War of 1812 being the first

one that I would think of. The periods

that went well were when the United

States was nice and said, "Hey, we have

mutual interest. Maybe we should have

NORAD and maybe we should have

intelligence sharing and maybe we should

have free trade." And then the

Canadians, to your point there, the the

rabies goes away. They're just really

nice beavers who just want to trade

across the border and don't want to have

to build all this infrastructure because

it's much harder and much more expensive

to do so. So

>> So yeah, and you don't want Canada

necessarily developing infrastructure if

you're the US because that

infrastructure will move those

commodities out of the US. That's that's

the whole point of why they're doing it.

Couple of things that you said. So when

I say Canadians are lying, I'm kind of

joking. I have no idea. But the point is

it almost doesn't matter what Howard

Lutnik said. The fact of the matter is

that Mark Carney made a big deal out of

tariffs on 5% of Canadian exports. Huge

deal. He said he's at war with America.

>> And that just smells like he's got

bigger plans and he's using this

American administration

daring them to put even greater tariffs

on Canada because again he has time on

his eyes and he has fiscal space in in

the near term. But a couple of things

you said that I want to react to. First

of all, the Maple 8. What is the Maple

8? Those are the Canadian pension funds.

Um, which are some of the world's

largest pension funds. I'm just going to

rattle a few of them. Uh, Canada Pension

Plan Investment Board. It is the uh

pension plan for basically the

government of Canada. Um, about 800

billion AUM cast a plus Quebec. This is

the sovereign wealth fund of Quebec. by

half a trillion. Uh PSP, which is the

pension fund for the public sector, 300

billion. British Columbia Investment

Management Corporation, 300 billion.

Ontario teachers, 300 billion. Alberta

Investment Management Corporation, the

sovereign wealth fund of, you know, the

pro state that is Alberta, 200 billion.

Ontario Municipal Employees Retirement

uh systems

150 and then Healthcare of Ontario Hoop

130. So together we're talking, you

know, something close to $2 trillion.

Um, so Mark Carney is very right. Other

countries have done the same thing.

Australia has asked the future fund of

Australia throughout the history to help

with infrastructure development. There's

nothing wrong with that. But I would I

would not be hyperbolic about it. You

know, it doesn't mean that these pension

funds are going to pull their investment

from the US, but yeah, they're going to

trim it. They're going to increase

allocation. they can easily help finance

a massive infrastructure development

plan in Canada. You know, this is not

some and by the way, they'll get some

return. This is not going to be wasted.

They may not get as much of a return if

they had invested in, I don't know,

Silicon Valley venture, although I would

disagree.

I think that some of the So, Canada is

an incredibly wealthy country. Maybe the

debt to GDP profile doesn't inspire

confidence because it's at around 100%.

But the low deficit combined with the

firepower of Canada's extremely

sophisticated sovereign wealth fund and

pension fund system uh would actually

make Mark Carney's vision possible. He

just needs an enemy to do it with. Uh so

yeah, I think that's that's an important

point that you raised. Now we might as

well shift to the other stuff which is

this, you know, point of like USC Canada

relationship and where is it headed?

I think that Canada, now this is where

I'm going to lose a lot of our

listeners, but this is what I do. Just

going to say what I think. Canada has no

threats.

Okay, China and Russia cannot like

Canada be invaded. It is impossible to

invade Canada. This is an impossibility.

We'll leave the US aside for a second.

Uh Russia cannot invade Canada. Like

functionally, it is impossible to do

because you would have to use the

northern route to do that. Uh, anyone

who's driven to Yukon or Northwestern

territories knows that there are no

roads. These are logging roads. You

cannot militarily invade Canada. China,

come on. China hasn't invaded Taiwan

yet. Like, it's going to invade Canada.

Shut up. So, this is impossible. So, let

me let me break down some figures for

you. Canada is currently planning to

purchase 88 F-35 fighters. F-35 is a

fifth generation stealth fighter

designed to fight [ __ ] aliens. Okay,

[laughter]

aliens.

It is completely and utterly useless for

Canada. And anyone who thinks that Mark

Carney is going hard in the paint, hard

in the paint would be telling America to

go [ __ ] itself because that's a $75

billion

cost over the life of the program, which

by the way, if you're doing math, is

about three and a half% of Canadian GDP.

You want to offset the pain of American

tariffs? How about cancelling the F-35

deal tomorrow and getting something more

reasonable such as the Grippen produced

by Swedish Saab, which number one is

created for Nordic cold climates. Number

two was designed by Sweden

to fight the guerilla air campaign

against the Soviet Union. What that

means is that Grippen has an incredibly

short takeoff and landing profile, which

is perfect for Canada. You can land it,

you know, anywhere in Canada as long as

there's a patch of a road and you can

maintain it in like a forest tent. You

know, Swedes always trying to go camping

and [ __ ] in their Volvos. So F-35 is a

ludicrous airplane for Canada. It's

ludicrous. It's like if I bought a uh I

don't know, like a Lamborghini, not the

SUV, but like a two-seater. I have three

kids, you know? My wife would like

divorce me instantly. Like get the [ __ ]

out of here. No, we're not going to

spend on a Lamborghini Gallardo. Like,

what are you doing? It is ludicrous. And

so, anybody in America who says, "Well,

Canada is free riding on our defense."

That's not true. Canada has no defense

needs. Its defense needs are 0% of GDP.

In a perfect setterist parabus world

where all things are equal, Canada

should be spending 0% on defense. The

only feasible geographical threat

against Canada is America. That is the

only country that could invade Canada.

And because of disparity in population

and capability, it would be ludicrous to

try to spend money on defending yourself

against America because it's impossible.

It's impossible. You cannot defend

against an American invasion. You have

to subvert that invasion in other ways

like a general strike, like refusing to

work, like appealing to the fact that

you these are two two brothers from the

same mother as the border monument in

Vancouver says. So, you know, like

what's America going to enslave Canada?

Okay, I guess you're fascist now, you

know. So, there's no point in spending a

dime every single cent that Canada has

spent since World War II. And in World

War II, Canada had a reason to spend on

defense because it was helping United

Kingdom prevent an invasion of Canada

eventually.

But the point is that other than world

wars, Canada should be spending 0% on

defense. It cannot fight against its

obvious threat, which is the US. And it

has no other threats. And so when

President Trump and the Republicans say

that Canada is, you know, like not doing

enough, that is mathematically,

geopolitically absolute horseshit. That

is just not true. Every cent of Canadian

defense is

American defense. Canada is writing

checks for American defense because

there is no Canadian defense. Canada's

the back door.

>> This is also where you know Mark Carney

did the thing about friendship and and

everything else. But it's actually you

know you probably saw I think it was

Shawn Duffy who said this um you know

different folks in the administration

saying that Canada doesn't have an army

and hasn't fought with the United States

and all these other different things. I

mean, Canadian soldiers, more Canadian

soldiers per capita died in World War II

than American soldiers perfistan. I'm

sorry. What about Afghanistan?

>> I mean, like, there have been plenty of

conflicts where Canadian soldiers have

been dying right now soldiers.

>> Canadian soldiers in Afghanistan went,

they were like, "Where do you want us?

Uh, we want you on the front line. [ __ ]

it. Let's go." Whereas the German and

the other NATO countries and fine, you

know, whatever. I'm not criticizing

Europeans, but they kind of stayed

guarding the air bases in Kabul. the

Canadians went to the front line in

Afghanistan. Now, the fact that Canada

hasn't gone and helped Trump in the

Persian Gulf or straight to Hermuz or

you know Iraq, Canada was against the

invasion of Iraq. I mean, yes, it does

happen.

>> It happens. But like by and large,

Canada has been one of the closest like

besides just the dollars and cents of

it. I mean, Can Canadian soldiers have

lost their lives in defense of and in

pursuit of American geopolitical

objectives, aside from NORAD and aside

from protecting American airspace and

everything else in the Cold War. And I

think one of the biggest mistakes of the

Trump administration is not just keeping

this at the trade level because Mark

Carney doesn't have to do anything to do

what you're saying when people say

things like that about Canadian

soldiers. I just think it it cuts a

little bit too close. And by the way, I

would just point out based on what you

said, I mean, first of all, um, Carney

put the F-35 purchase program under

review last year. He did.

>> Um,

>> and probably there'll be an announcement

in the coming months about what that's

going to look like. I I would

>> I mean I I think that he will probably

pull out of it. I think that they've

committed to a certain number up front,

but I don't think that they will go

there. And there's a piece in the Globe

and Mail today about

>> uh Grippins uh Saab selling Grippins to

Canada um in the future and negotiations

that are going back and forth if Canada

needs um to your point like probably

still makes sense for them to have an

air force uh that can deal with, you

know, Russian incursions or Chinese

incursions or protect Canadian airspace,

but you don't have to go to the United

States for that. There's no reason that

that military-industrial complex has to

link you to that. And in fact, I mean,

there's a huge cottage industry of jobs

and investment that goes into Canadian

firms doing this, but this is another

thing that Canada could do itself if it

wanted to. 10 years from now, are we

talking about Canada manufacturing its

own fighter jets?

>> It could.

>> By the way, Canada is one of the few

countries that has the capability.

Quebec has an air defense industry. Um,

you know, Bombardier could whip up a

fighter jet. It would suck. I mean,

don't get me wrong, but you know, it's

it's so funny to me when you when you

speak with Americans, including a

government, they're like, "Well, that

sucks." It's like, "Yeah, but we are not

fighting Iran half a world away. You

are. So, you need an F-35." But

countries like Slovakia or Sweden or

Canada, they need something that's, you

know, fit for them. And a Grippin is

much more fit for an F-35. Now, I don't

want to make this about Grippin versus

F-35. Let's leave that aside. The nuance

that I'm trying to make here

is that Canada doesn't owe America

anything. And what I mean by that is

that America has to defend Canada. It is

its national prerogative. It's its

national interest.

That there's no way that United States

of America can be safe if it's not

defending the airspace and the land mass

above it. Like that's and of course that

comes with some subversion of

sovereignty for a small country like

Canada. Like Canada has to allow the

United States of America to have NORAD

presence on on its territory. Like

America has to have radar installations

in Canada. Fine. Like that's you know

there's certain things Canada and the US

have to cooperate. For example, or who's

entering Canada and and out like there

was this plan for like a joint um

outward immigration system or not

immigration but like at least border

like all those things are subversions of

Canadian sovereignty that make sense.

However, I do want to go back to this

more qualitative point, which is is in

the long term US a threat to Canada? And

I would say that Donald Trump is not. I

think Donald Trump is transactional.

He's sensational. He's hyperbolic. He's

running a game show. God bless him. It's

obviously creating a lot of V for my

clients. Just keep doing it, Donnie.

Like, it's awesome. And for us, I mean,

I I've been I've been I mean, do you

think we're going to get as much

interest as geopolitical analysts when

Donald Trump is not, you know, creating

new geopolitical crises every single

week? There is a small part of me that

understands that, you know, he's got the

shotgun, we've got the briefcase, like

we're all in the game here, you know,

>> we're all in the game. Okay. The problem

is what you said, which is that he is

opening, he is widening the goalposts on

certain things that are acceptable to

say. And I'll tell you a lot of my

friends, forget clients, but just

friends, you know, like friends, you

know, people you know, have come up to

me, really smart, educated, just don't

think about these things often, but like

the question they have posed and and and

I'm saying this for the benefit of

Canadian listeners. You know, anyone in

Canada who thinks that Carney is going

too hard, that this is dangerous, just

hear me out for the next five minutes.

There are people that come to my life,

really well-meaning, good people, might

be conservative, might be liberal, but

like educated, who say, "But why is

Canada independent,

but they do have a lot of natural

resources.

But we will have a water problem in

America, and they do seem to have a lot

of fresh water,

but Quebec does produce a lot of

hydropower."

So the line of questioning thanks to

Donald Trump has now gone from brothers

from the same mother as again as the

monument over in Blaine Washington

border crossing says beautiful monument.

It's a huge arch. If you've never been

there drive from Seattle to Vancouver,

stop by the park at the border. It's a

huge like Shanza gate but there's no

gate. They're open, right? The gates are

permanently open. It's it's one of the

it gives you goosebumps right away. It's

a really really profound, beautiful

monument to these two countries that

share so much of history, culture,

values.

Well, that sentiment is gone and the s

the new sentiment that's in is

transactional. Like, wait a minute. But

like, are we really going to let 40

million people in Canada kind of decide

what price we pay for their natural

resources in this world where China and

Russia, like shouldn't we assume

control? And so I do think that from

Canada's perspective, it is very clear

that the US is a long-term threat to its

sovereignty. It's not China. It's not

Russia. It just isn't. They're too far.

There's too much ice between them.

And so it's obviously the country that

you're hugging along the border. Like

[laughter]

95% of your population lives within 100

miles of the US. Like what do you of

course that's the threat. I al I also

just want to flip this

>> sentiment is shifting just so just to

light the plane if the sentiment in the

US is shifting from like brothers of a

different mother kind of quirky

Canadians make great comics you know

like you know lumberjack played shirts

cool maple syrup if it goes from that

towards like but

but I mean they do have a lot of stuff

we need right if that cognitive shift

has been planted in our friends Jacob

well educated, well-meaning, you know,

just like

if there's if their first reaction is

not like, "Come on, man. It's [ __ ]

Canada. Leave them alone." If that's not

their first, if their first reaction is,

but but you know,

if that's their reaction, then

absolutely the 40 million Canadians

above the border, they got to start

getting real about where this ends 20,

30 years from now.

Um, yeah. First, first I'm looking at a

a picture of the thing that you're

talking about. Uh, it's uh brethren

dwelling together in unity. Although

maybe they should erase that and put

brothers from a different mother. I

think yours has a nice

>> No, it does say brothers uh from a

different mother on a different

>> Oh, it does on a different but there's

different inscriptions.

>> There's different inscriptions at the

monument. Yeah.

>> Um, but I would just Well, there's a

couple things I want to say. The first

is so for for those people that you know

who are coming to you saying, "Well, but

they have something that we want." I

just and I'm not going to be porative

about this like it's neither good nor

bad. I'm just saying that is imperialism

in a nutshell. You have something I

want. I am strong enough to take it. I

will take it. That that's if you want a

one def one sentence definition of

imperialism. That is it. And President

Trump and I've said this before, his

foreign policy is not unprecedented. His

foreign policy is straight out of the

early 1900s. He is a US imperialist. He

wants to seize assets and territory and

things for the United States because he

thinks of the United States as an empire

and he is the emperor and everything

should be controlled by the United

States. So, you know, I I think

imperialism is not the best way to run

things. Um, just from an do you want do

you want your policy to be effective? I

don't think that's an effective way for

the US to run policy, but that's what it

is. I would also just say though, you

know, yes, no, Russia's not going to

invade Canada. China is not going to

invade Canada. You know who else is not

going to invade uh North America? Like

or I'm sorry, let me rephrase that. What

I'm trying to say is that neither are

they going to invade the United States.

The United States is not going to like

Los Angeles is not going to be invaded

by the People's Liberation Marine

Commandos. The Russ the Vagner group is

not going to land in Brooklyn and fight

its way up into Manhattan and seize New

York.

>> That's a good script, bro. We should

write that up.

>> We Yeah. No, we we should. Uh the

greatest geopolitical threat for

America's history for the first 164

years of its existence was Canada. And

the United States and Canada, you know,

of course, Canada was still a British uh

possession at this point. Fought the War

of 1812 over this. There were some folks

who said, "Hey, Canada has some nice

things and also they can threaten us. We

should go get them." And then the White

House was burning in Washington at the

end of that conflict. And that is why

Canada's independent because we tried

this once before and we got our butts

kicked. Now we're much more powerful

than we were then. I just want to point

out that as late as 1935, the US Defense

Department is putting together strategic

plans and war games about Canada because

they are worried about Canada

existential

>> geopolitical threat to the United

States. And it is only in 1940 and 1941

when World War II, you know, the tide

changes, Britain,

>> Britain's future hangs in the balance,

is Britain even going to survive the

Nazi onslaught, that the Canadians and

the Americans look at each other and

say, you know what, we have to be

allies. we have more in common than we

do with Imperial Japan or with Nazi

Germany. And that gets extended in 48

with the Five Eyes. It gets extended in

58 with the with setting up NORAD. This

is not where the United States was

strongarming Canada. We're saying you

must do this. It was we're looking out

at the world. We have shared interests.

We have shared culture. We want to be

aligned together because that is what is

going to make Canada and the United

States more secure. And it allows us

something that both Russia and China and

any other US uh rival doesn't have,

which is we no longer have to worry

about this border. The longest land

border in the world, neither country has

had to worry about since 1940 because

we're friends. So yes, you're right. If

sentiments are changing that way in the

United States, the Canadians need to get

real. But if we push the Canadians away

from us, if they move just, and I don't

mean they move to enemies, if they just

go from allies to,

you know, pragmatism, middle of the

road, on some things they align with us,

on some things they don't, suddenly that

border becomes something that we have to

worry about. And all this money we're

spending on F-35s and projecting power

into the Middle East and everything else

that's in the South China Sea, that goes

away because now your the, you know, the

homeland is not secure, is not safe. It

is a basic geopolitical imperative that

the United States has solved in being

friendly with Canada. And it never

achieved what it wanted to with force or

with trade wars. It achieved it by

saying, "Hey, Canada, it's easier for

you to make a bunch of money by sending

the things that you have to us and we'll

make it nice and we'll be friendly and

we'll visit each other and we'll have

these peace arches and everything else

and let's go uh do that rather than

fight each other." And it's just it's

it's as disastrous for US geopolitics in

the long run. I think as it is for

Canadian geopolitics.

>> That's a Well, that's a great point. Uh

first of all, you're describing the the

concept the underpinning the board game

risk. That's what you're describing. The

reason you want to secure a continent is

to get those extra armies every term.

That's what America gets. Not just that,

but Canada pays for those armies. And

that's my point. Like spending three and

a half% GDP over the next 10 years on

shitty airplanes. Sorry, my bad.

greatest airplanes ever made that Canada

does not [ __ ] need is a side of

Canada's already paying for this

defense. So in risk, you collect those

extra armies because you don't have to

worry about Canada. Now, somebody

listening to this is what would we worry

about Canada?

Well, if you invade a country the size

of Canada that hates it, that you think

belongs

to your culture and will welcome you

with open arms,

you're starting to become delusional

like Vladimir Putin.

you know, guess who also speaks a

similar language. Okay, Ukrainian and

Russian are much more different than,

you know, Canadian English and American

English.

Uh, but like, yeah, no, Canadians are

not going to become Americans. They

don't want to. And this is my point from

the beginning of this podcast. Like,

when you go to Canada, people are

pissed. Go to Canada. Go Canada

vacation. Ask them what they think. Rent

a car in Spokane, Washington, and drive

up to British Columbia and see what

happens to that car if it has American

license plates. By the way,

now actually what happened to me when I

did that is I just got an uh two notes

on my windscreen that were very mean,

but they didn't even key a car, which

was like the most Canadian thing ever.

But they are going to blow that car up

if it's a tank. Like, yeah. Oh yeah. Oh

yeah. Canada will have an insurgency. It

will have strikes. It will have pockets.

Like Canada is built by blue collar

people. Canada is a commodity extracting

country. Its history is all about

bluecollar trades, you know, moving into

cities and becoming like yuppies who

wear little lemon and drink lattes for

sure. But Canada is a country that has a

proud military history. An invasion of

Canada is just going to be annoying.

There'll be sabotage. There'll be this,

there'll be that. It's not just not

going to work. Not to mention

contemplating some form of a military

invasion of Canada is a sign of a civil

war in America

because ca because America would have to

become something it is not. It would

have to become a country comfortable

with unloos

and that's a fascist regime because

America cannot democratically annex

Canada. You would have to have you would

have to give Canadians a choice.

And if the Canadians accepted the choice

and actually in a referendum voted to

join America, you would have to

appropriately give them seats in various

legislatores, both the House and the

Senate. the Senate being the key problem

because other than Alberta and I'm going

to just entertain American conservative

fantasy that Albertans are actually

[ __ ] conservative

because if you poll Albertans on a slew

of social issues,

they poll like Oregon.

So if you're an American Republican

listening to this or a MAGA acolyte

thinking like whoa whoa whoa whoa whoa

there's a conservative Canada brother

it's conservative the way like Tom

Tillis is conservative.

Okay. So if Canada was ever going to be

digested democratically you would

invariably change America at that point.

So if you are in the MAGA camp you

cannot let that happen. You have to

enslave Canadians instead. So we're

talking fantasy at this point. We're

we're throwing worlds like Anelus. We're

throwing worlds like an invasion. You

know, that's that would be disastrous

for the United States of America because

now it's permanently stationing hundreds

of thousands of troops. It's subverting

Canadian democratic expression. Like

what are we talking about here? If we

are at that point, Jacob, we're at a

point where the United States already

had a civil war between like like a like

a Spanish style civil war between like

conservatives and, you know, left and

right, whatever.

>> And I don't think it's going to get that

far. But but this is where I start to

because I I've been trying to entertain

the devil's advocate point of view. And

there are I've had people write to me

and say, "Hey, but this is all a broader

strategy about Fortress America and the

North American Free Trade Agreement and

the Trump administration is using its

leverage because Canada has to fall in

line." And like

>> they've always fallen in line. Those

people are just not smart.

>> That's what I would say. They're

uninformed.

>> It's sort of like that person. It's sort

of like that person who comes to you and

says, "Well, they have something we

want. Are we going to take it?" There's

that first. there. Second, it betrays a

really fasile reading of what North

American geopolitics looks like. You're

just assuming that Canada's going to do

whatever the United States want. For mo

for for more than uh the majority, for

more than 50% of the history of the

American Republic, Canada didn't do

whatever the United States wanted. The

last, you know, since 1940 has been a

really, really nice time. There's a huge

peace dividend that we've gotten because

we have made the Canadians our brothers.

They weren't our brothers.

>> I would say it's not even a peace

dividend. It's an actual monetary

dividend. Paying 75 billion [ __ ]

dollars for fighter jets that have no

utility.

None for Canada. Zero. You could use a

[ __ ] Cessna

to do what you ask.

>> You can fly a Cessna over the

Northwestern territories and like, you

know, monitor Chinese and Russian

submarines. The point is that's an

example of not something that happened

after World War II. And I obviously

appreciate your example

[clears throat]

>> or like what happened after 9/11.

>> It's something that's happening right

now,

>> right? Oh, sorry. Anyways, I'm I'm just

I I'm interrupting here. So, everybody

take a shot.

>> No, no, no. You're you're I just the the

last point I just want to say is like

even even if you give the Trump

administration the benefit of the doubt,

and I've been trying to do so because

I'm more like I think this is stupid on

its face. So, I've been trying to

entertain it as okay, well, what are the

real reasons behind this? And the place

I end is, you know, all of this,

everything that we've talked about up

until now, I think it's true. I think

it's an interesting conversation. But

the real issue here is that what the

United States is doing will not work. It

is not going to achieve any objective

for the United States. And in fact, it

is going to do the exact opposite. And

at a certain point, it doesn't matter

what your strategy is. It doesn't matter

what the national security document

does. It doesn't matter if Scott Bessant

has good intentions. And it doesn't

matter if Donald Trump is some, you

know, extraterrestrial genius who has

come here to save the United States. If

your tactics don't work, who cares what

your strategy is? Who cares what your

goal is? Because you're not going to be

able to get from point A to point B. And

this a trade war with Canada at this

point in the fiscal cycle, at this point

with what you're doing in foreign

policy, with everything else that is

arrayed in front of you, I'm sorry, it's

not going to work and it's going to be

counterproductive in the end. So fine,

I'll grant all the strategic arguments

to those who want to back up the Trump

administration. The the argument that

the Trump administration has to make is

okay, what's your plan here? Like you

think this is going to work. This is not

Mexico. They are not just going to say

cool like we'll do whatever you say and

move forward.

>> I think it's very similar to Greenland.

people who defend Greenland

and President Trump's like listen if

you're listening to this and you just

you know passingly listen to geopolitics

I'm sorry to be demeaning but that you

just don't understand how the world

works like US already has everything it

wants from Greenland this is why the

Danes were so confounded like you want

to expand military bases in Greenland

God bless you man [ __ ] do it

similarly with Canada US already gets

everything it wants Canada's

infrastructural

stillbornness is

Canada is a stillborn sovereign state.

You understand what I'm saying? It is in

some sense it was a colony of the

British and then it became a deacto

colony of the Americans. They never had

a revolution. And I've been joking. I I

wrote in a little thing to my clients

this week. I said, you know what, it

took 250 years, but perhaps Donald Trump

has brought the American Revolution to

Ottawa. Like that might be his biggest

legacy here in terms of Canadian

history. The revolution is nine. You

know,

>> cod liver oil. I I said it on this

podcast before, but [laughter] listen,

Canada is one of the only countries in

the world, I may be wrong, I think it's

the only one, where the provinces of

Canada, the political entities, don't

have free trade with one another.

Why? Because they don't need to. Because

they have trade with America. Do you

know how great of a deal this is for the

United States of America? Like Quebec

and Ontario have more trade barriers

than like they do with America

effectively. Not not really, but in some

ways they have some like there's no free

trade. There's no infrastructure

connecting them. All of Albertans's

pipelines go south. So what are you

talking about? And then finally, not

you, but like the people who think that

there's something to gain. All there is

is to lose. America will lose what Jacob

has articulated as this not giving a

[ __ ] about the North so that you can go

and invade countries around the world.

Like it's sick. It's sick. It's a great

deal. We don't have to worry about the

neighbor upstairs because it's like a

nice lady that make me maple syrup

[ __ ] cake pancakes. So that's great.

Number one. Number two, this is a

country that pays for your defense. It's

not the other way around. Anybody who

thinks that is a [ __ ] There are no

threats to Canada. There are many

threats to America. Every [ __ ] cent

of Canadian tax dollars that goes

towards defense goes towards American

defense. So this is an incredible deal.

And what Trump has done is he's

subverted that. He subverted it at a

cost that could potentially become

disastrous 10, 20, 30 years from now if

Americans suddenly start changing their

their vibes towards the northern

neighbor and actually start making the

northern neighbor think about maybe

consolidating alliances outside of the

US. Now, a couple of things I want to

>> Oh, can I just say one thing on that

which I think it's also instructive that

this is not just Canada. There's a

similar thing happening here, I think,

with Japan and it's not as on Yeah. and

and South Korea and it's not as much on

people's minds because it's not as much

of a visceral issue and because they're

not in the USMCA, but Japan and South

Korea are going through the same thing

and they are jumping through the hoops

because they don't want a disruptive end

of trade or they don't want a trade war

with the United States in the short

term. But Takahuchi and her government

have said it over the past month or two,

they are also trying to repatriate

Japanese capital to Japan. It's one of

the reasons I'm so confused. at Scott

Bessen making the yen something that he

wants to deal with because Japan has

stated very clearly that Japanese

pension funds should invest in Japan

again rather than Japanese capital going

out of plumbing of the financial and

everything else.

>> And by the way, Jacob, Jacob, just why

is all this happening? Why is because

you messed around and found out you

[ __ ] around and found out. So this

idea, you know, like Steven Miran and

Scott Bessent almost like preemptively

said, "Hey, don't sell treasures." Okay,

fine. Cool. then maintain the

relationships that have underpinned

current account recycling into U current

account surplus recycling into American

debt. Like you know, it's not like Japan

woke up one day and was like, you know

what we're going to do? We're going to

be dicks to Americans or that Canada did

the same. Nobody did that. It's when

America's like, I don't know, closed the

straits of Hermuz without thinking about

its allies, starts the war, doesn't know

how to finish it, uh is mean putting

tariffs, this and that, saying that

Canada is the 51st state. That's when

these countries are going to slow. So

here's where I want to land this.

My advice to Mark Carney. First and

foremost,

one thing I disagree with him is that he

wants to invest in in Canadian defense.

>> I think that Canadian defense

needs to be on the table as a

negotiating tactic. And I think Mark

Carney has to utter the words that are

the truth. Every cent of Canadian taxes

that is spent in defense is goes towards

securing United States of America

and that needs to be a bargaining chip.

So I would bargain with a percent of GDP

spent in defense and I would flip the

script. Now I understand that he wants

to spend on defense because as you said

Jacob, you articulated well Canada does

have an industry. Canada does have a

military industry. It's a jobs program.

But I would tie this towards the reality

like Canada has no threats. None. I mean

if he wants to participate in

peacekeeping then he can buy check

armed personnel carriers quite frankly.

He doesn't have to build them itself. So

that's the first issue. I think he needs

to be a lot more aggressive and the F35

deal has to be chopped right away. Like

there should be like it's done. We they

have to contractually I think buy 18 of

them. You were correct. But that much

much more there needs to be a much more

strategic. Why? Why? Because he will

then get the US defense department

involved. Oh, I'm sorry. I'm sorry.

>> Department of War.

>> Department of War. I don't want Chris

Meth Rumsfeld has has other things on

his mind. But

>> no, no, but I'm not wor I'm not talking

about Rumsfel um what's his name? Uh

Pete Hexit.

>> Pete Hexit.

>> I'm talking about generals, you I'm

talking about people who have gone to

war with Canadians and who understand

>> they're they're he's getting rid of

generals who disagree with him. I mean,

it's becoming an echo chamber at the

top.

>> So maybe maybe you're right and maybe it

won't work, but there's people in

national security of the United States

of America who understand what I'm

saying.

>> They understand that this notion that

America defends Canada is a [ __ ]

laughable propaganda of the United

States of America. So this needs to go

from like, you know, a battle over

supermarket grocery aisles to a to to to

speaking to America realistically. Okay.

And in an adult way like brother, we are

defending you. We're spending our money

on you already. Quite frankly, one and a

half% of GDP is too [ __ ] much. So, so

if you want this relationship to

continue, what Canada has to land on is

something that you are basically saying,

it's [ __ ] you, pay me.

That's what all these countries

eventually are going to turn around to

the US and say, "Oh, you want to put all

these barriers in this and this and

this, and you still want me to recycle

my surplus into as FDI or as portfolio

investments into bonds? [ __ ] you pay

me." And this is why this is so

important, Jacob. And why I can't

believe he took us 60 minutes to land to

this.

The world of states, he's like a

schoolyard, okay? And there's a big

bully and it's Donald Trump and he's

going around and saying like, "I'm going

to increase the lunch money you owe me."

And everyone fell in line. China's like

the weird kid, you know? It's like good

at [ __ ] math, you know, and said,

"Fuck you." No. And America's like,

"Fine, whatever. You can go play with

him. Nobody wants to, you know." Um,

>> no. What happens is China gives its

lunch money to Mexico and says, "Will

you give that to him over there?" And

we're we're because we're also,

>> but whatever. Like, China's kind of like

a really big kid, but also, you know,

just like whatever. Like, you don't want

to [ __ ] with China, but also it's weird.

So, America is okay not getting the

lunch money from them, but it's bullying

everyone else. And the problem in a

schoolyard is that there's a collective

action dilemma. Like, if all the nerds

and weird kids got together, they could

beat the [ __ ] out of the bully. like

beat the [ __ ] [ __ ] out of him. But it

takes somebody to stand the [ __ ] up.

And he's the weird kid with kind of a

weird French accent that stood up and is

telling Trump, you know what? [ __ ] you.

Pay me. No, no,

>> no. I I agree with that. And I also

wait. It was just there was a pause for

effect.

>> Sorry. I thought it was I thought

thought it was a pause to hand.

>> I'm a thespian. I'm a thespian. Let me

got a testpine. I don't know if that's a

verb. I don't know. I just just listen.

The danger for Scott Bessent and Howard

Lutnik and all these guys is that South

Korea's watching. Japan's is watching.

Saudi Arabia is watching. Apparently,

the Norwegian pension fund is [ __ ]

watching. Oh, yeah.

>> Oh, yeah. They're [ __ ] watching. Huh?

Huh? Was that interesting this morning?

How'd you like that [ __ ] Yeah, we're

going to go down. Everyone's watching.

And if they all come together,

you're [ __ ]

because they might be nerds. They might

be weird. They might not have F-35s, you

know, they may not have died enough in

Afghanistan, Iraq, but if they all

[ __ ] get together and say, "Fuck, you

pay me now, you're going to end up with

a worse deal than you had before you got

elected." This apparently deal wrote

about how the rest of the world is

effectively like raping America, like

that was a pretty good [ __ ] deal.

They got current account surpluses. They

invested in treasuries. And listen, last

year everybody kind of said fine, yeah,

10% tariff. Hey brother, I hear you. You

know what? You probably should tariff us

a little bit. You know, everyone was

cool. But now, now you're still going to

the same well expecting the same more T.

You're going to tax that well a little

bit more. You already took more lunch

money from the rest of the world in

2025. And they took it. They took it.

Now you're asking for more. Now you're

in danger. And you're in danger because

little Canada stood up in the middle of

the schoolyard and said, "Fuck you."

And the bully's like, "Wait, what?" And

it's that scene in every [ __ ] movie

we've watched, all those movies when the

one kid stands up to the bully, you

know? And you know, this is Biff.

America's Biff from Back of the Future,

guys. And you're going to be [ __ ]

washing Michael G. Fox's car 20 years

later, if you don't understand how

actually epically dangerous this moment

is to the United States of America right

now. This is This is it.

There needs to be a deal with Canada and

it better be a [ __ ] deal that makes

Canadians, you know, swim in their maple

syrup for the rest of their lifetime

because now they've tasted what what

have they tasted? They've tasted the

fear and the limits of American power.

So this is a [ __ ] you pay me moment now.

And if the rest of the world gets on

this train, suddenly there's collective

action, collective action, not

collective action dilemma. And this was

always the premise of the United States

strategist. They've even said it. The

world has a collective action problem.

It cannot bind together and negotiate

against us. So, we'll pick them off one

by one. Yeah. Until one country that is

extremely

value adjacent tells you to go [ __ ]

yourself. Well, you think South Korea is

not going to do that? Like, no. We can

handle North by ourselves. And by the

way, you just said Kim Jong-un is better

than we are. So, [ __ ] you pay me. Japan,

as you said, a lot of other countries.

And by the way, there's no better

example of multipolarity than this. By

the way, the fact that the United States

asked Canada to put a veto on its trade

agreements and Canada said no,

you know what the US had during the Cold

War? It had a veto on Canada's trade

relationships. If Canada made a deal

with the Soviet Union, the US would have

abregated that. So, it is a very, very

dangerous moment. I think that I give

the Trump administration a lot of credit

for managing to raise some revenue

through tariffs. Hey, again, 2025, not a

disaster.

But now they're flirting with a revolt

because they're taking too much lunch

money from their nerd friends.

>> Yeah. Well, and the way the way I want

to close it, uh, to it's not just fear

that the Canadians are tasting. I think

they're tasting revolution and

nationalism and freedom and sovereignty

and all these things they really haven't

tasted before because they haven't had

to. Um, but to your point, I mean, the

United States,

>> uh, you know, it's asserting itself in

Mexico. It's asserting itself in

Venezuela. It's going to be buddies with

El Salvador and control Central America,

but it's be it it's basically limiting

its power to its backyard. It's going to

be a little imperial power in North

America. And if you're going to do that,

the most important country to have

relations with is Canada. Like that is

the country that you need to secure so

that you can continue to do all these

things. If you're breaking those

relations with Canada, it's going to be

very difficult for US geopolitics. And

the the question I wanted to end with

you on because this is out there in the

media and I know that Carney's been

going back and forth. I mean, yes,

there's a version of this that is

Canadian nationalism revolution blah

blah blah. There's also a version of

this which is is Canada part of the EU

in 10 years? Like, I don't I don't think

that's a crazy idea to consider.

Remember, Canada for most of its history

was a British colony. So, why not Canada

rejoining Europe? And, you know, Canada

has lots of things that Europe needs.

Europe has lots of things that Canada

needs. They've been left at the altar by

the United States. But if they ignore

the United States, then they can make

better deals with China and better deals

with Russia and some of these other

places that they have to deal with. Um,

is do you think it's completely

unrealistic? Because I look at it right

now and it's like the the odds are

increasing with each passing day. It

makes an awful lot of sense for Canada

to do that. Not at least because it's

going to blunt some of the the negative

consequences of a true trade spat with

the United States.

>> I mean, I I don't think the US is

stupid.

So if the US continues down the path of

just basically becoming something other

than a western liberal democracy

then yes that that might happen but you

know what you're describing is a world

in which there's a civil war in the US

maybe not with guns but effectively

um and in many ways it is I mean one of

the things that distinguishes US and

Canada in this conflict is that a social

democratic premier of British Columbia

David Eie

and uh Premier Ford, who is definitely

conservative. He's not liberal. You

know, the guy who has a lot of real

estate on his ass.

>> Lot of real estate. A lot of real

estate.

>> A lot of real estate. I love that quote.

So, you've got super left-wing,

climate conscious, progressive, liberal

governor or premier, and Ford who's

conservative and populist. They're both

backing Carney. That's not happening in

America. going back to the point that

Canadians are clearly like you know like

>> so yeah I think that uh there is sort of

a like Canada represents something to

Americans as well

>> and for a lot of ma people the problem

they have with Canada really is values I

would say um I think a lot of this talk

of math like oh they don't pay enough or

they tariff us or Quebec dairy farmers

or you know whatever singing French

songs whatever the [ __ ] [ __ ] I think

fundamentally Y it's like look, there's

this progressive liberal place up north

that has like healthcare and it and it's

universal and it doesn't work that great

in every province, but somehow Canadians

live longer than Americans. So, you

know, um you know, all of that just irks

them and they need to get over it. The

MAGA camp needs to get over what Canada

is because it is an ally of America

first and foremost. And if they don't if

if American adherence to the America

first ideology can't get over the fact

they have a great ally who yes likes

socialized medicine

then they've got a problem with their

own fellow citizens in America.

Like that's why this conflict is so

epic. It's epic because Canada could

stand up to the bully and then solve the

collective action dilemma. If Scott Bess

is listening to this, and I know members

of the Treasury are, please explain

this. This is a very important moment.

You either now have to squash this kid.

And if you don't, like, holy [ __ ]

what's going to happen? So, that's the