According to the people present, when former Canadian Prime Minister Justin Trudeau traveled to Mar-a-Lago to meet with President-elect Donald Trump, his primary objective was to inform President Trump his public demands for U.S. trade reciprocity with Canada were unachievable.

Trudeau was not lying.  In this outline we will explain a dynamic that is certain to surface this summer.

President Trump has deferred all North American trade negotiations with Canada and Mexico until later in the year, after the priority trade deals with other large trade partners are completed.  The USMCA trade pact is due for review and renegotiation this year [BACK STORY]. We should expect an entirely different trade pact as an outcome, quite possibly the ending of the trilateral nature of the current agreement.

A few days ago, Politico noted that Canadian Prime Minister Mark Carney had a reprieve from his prior campaign points about confronting President Trump on tariffs immediately.  PM Carney is currently trying to align allies for what will likely be a major confrontation that he cannot win.

♦ BACKGROUND – Following the 2024 presidential election, Prime Minister Justin Trudeau traveled to Mar-a-Lago and said if President Trump was to make the Canadian government face reciprocal tariffs, open the USMCA trade agreements to force reciprocity, and/or balance economic relations on non-tariff issues, then Canada would collapse upon itself economically and cease to exist.  In essence, in addition to the NATO defense shortfall, Canada cannot survive as a free and independent north American nation, without receiving all the one-way benefits from the U.S. economy.

To wit, President Trump then said, if Canada cannot survive in a balanced rules environment, including putting together their own military and defenses and meeting their NATO obligations, then Canada should become the 51st U.S state.  It was following this meeting that President Trump started emphasizing this point and shocking everyone in the process.  However, in the emotional reaction to Trump’s statements, no-one looked at the core issues outlined by Trudeau that framed President Trump’s opinion.

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Only President Trump could get the Canadians to vote for an exit to the USMCA, and he did it brilliantly.

To understand President Trump’s position on Canada, you have to go back to the 2016 election and President Trump’s position on the NAFTA renegotiation.  If you did not follow the subsequent USMCA process, this might be the ah-ha moment you need to understand Trump’s strategy.

During the 2016 election President Trump repeatedly said he wanted to renegotiate NAFTA, the North American Free Trade Agreement.  Both Canada and Mexico were reluctant to open the trade agreement to revision, but ultimately President Trump had the authority and support from an election victory to do exactly that.

In order to understand the issue, you must remember President Trump, Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer each agreed the NAFTA agreement was fraught with problems and was best addressed by scrapping it and creating two seperate bilateral trade agreements. One between the USA and Mexico, and one between the USA and Canada.

In the decades that preceded the 2017 push to redo the trade pact, Canada had restructured their economy to: (1) align with progressive climate change; and (2) take advantage of the NAFTA loophole.  The Canadian government did not want to reengage in a new trade agreement.

Canada has deindustrialized much of their manufacturing base to support the ‘environmental’ aspirations of their progressive politicians.  Instead, Canada became an importer of component goods where companies then assembled those imports into finished products to enter the U.S. market without tariffs.  Working with Chinese manufacturing companies, Canada exploited the NAFTA loophole.

Justin Trudeau was strongly against renegotiating NAFTA, and stated he and Chrystia Freeland would not support reopening the trade agreement.  President Trump didn’t care about the position of Canada and was going forward.  Trudeau said he would not support it.  Trump focused on the first bilateral trade agreement with Mexico.

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When President Trump announced the 90-day pause in combination with the increase in tariffs against China, there was a background element missed by many.

At the moment President Trump triggered the public announcement, U.S. Trade Representative Jamison Greer was testifying to congress.

President Trump is not a jerk.  Donald Trump would not put a top executive Greer in that optically vulnerable position if USTR Greer was the tip of the spear, it’s just bad business form.

The timing and background indicate something more substantial.  For what we are calling ‘the BIG UGLY’ Treasury Secretary Scott Bessent is the point, Greer is a functionary.  It’s a shift from the Term-1 approach, because the global trade reset is magnitudes bigger and more substantive.

This approach would also explain why Robert Lighthizer was not reenlisted in Term-2.  If Lighthizer was in Greer’s chair in front of congress at the moment of the public announcement, he would have been furious and rightly so.  Lighthizer and Wilbur Ross were the tip of the spear in term-1, Lighthizer facing the region of Asia and Ross facing Europe; but the same strategy is not present in term-2.

In the Term-2 trade reset, the entire globe is being targeted simultaneously.  Enter, the U.S. Treasury Secretary in a bigger, more substantive, and much more prominent role due to the scale of the trade reset.

This trade approach is much bigger, obviously. As the nuclear-level trade detonation takes place, Secretary Bessent is in control of both the financial market response and the core finances of the USA as it relates to the reverberations.

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The atomic sledgehammer that President Trump just delivered to the German auto industry simply cannot be overemphasized.  A 25% tariff on imported cars and car parts completely negates hundreds of billions in pre-positioned investment dollars by German auto companies in Mexico.  [Executive Order Here]

[Cliff Notes Here]

To give scale to the impact on Germany, consider that German automakers currently have 330 automotive suppliers in Mexico according to information from VDA.  Audi (a subsidiary of Volkswagen) has no U.S. production sites; every Audi sold in America will be subject to a 25% tariff. The Audi brand access to the U.S. market was/is 100% dependent on Mexico, including for manufacturing the Q5 SUV, its top-selling U.S. model.

According to prior reporting from Politico, “Volkswagen’s most popular model for American consumers is the Tiguan, an SUV that is entirely manufactured in Mexico. The German automaker sold over 30,000 of the vehicles in the final quarter of last year, a nearly 50 percent year-over-year increase.”  But wait, it gets worse….

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Canadian leftists have selected Mark Carney as their replacement for Justin Trudeau, Carney will be sworn in as Prime Minister shortly and complete the remaining segment of Trudeau’s term before new Canadian elections.

The only issue on the mind of voters in Canada is which candidate will fight U.S. President Donald Trump the hardest.  Conservative leader Pierre Poilievre has vowed to fight Trump harder than Mark Carney, but the leftists in Canada are now back on the ascendency and will dispatch the pontificating Poilievere shortly.

During his acceptance speech at the Liberal Party convention, a beaming Mark Carney promised to defeat President Trump and the Americans in the upcoming trade war.  Carney noted, a sense of national pride has swept across Canada as the people unite in their hatred for everything Trump and everything American associated with him.  WATCH: 

In addition to tariffs against Canadian goods and services, U.S. President Trump has massive economic arrows in his quiver that can be deployed against the Canadian economy.  Measures including larger tariffs (tariff reciprocity), financial sanctions, restrictions on Canadian investment in the USA, revocation of visa-free border crossing, forced divestiture of American asset holdings for the Canadian people (banking reciprocity), all the way to a full-throated embargo of all goods and travel from Canada are potential.

If that sequence of events ever happened, the Canadian government led by Prime Minister Mark Carney has vowed to respond in kind to Trump with identical action blocking any/all USA products, services and American citizens from entry into Canada.  This approach would enable us to finally determine which nationalistic outlook will survive, Canada or the USA.

(Via Politico) – […] One of Carney’s first decisions will be whether or not to call a snap election in the middle of a trade war. He has identified Trump’s rolling tariff threats as an “economic and sovereign crisis.”

“The Americans want our resources, our water, our land, our country,” Carney said. “Think about it. If they succeed, they will destroy our way of life.”

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Commerce Secretary Howard Lutnick, another deliberate and happy warrior, appears on Face the Nation to deconstruct the narratives presented by NBC and Kirsten Welker.

Starting with the Mexico and Canada tariff issues, Welker incorrectly frames the current issue around economics. Secretary Lutnick presents the issue of the current Mex/Can confrontation for what President Trump has prioritized, the issue of illegal fentanyl smuggling across the border.

100,000+ Americans are killed each year with the intentional and purposeful transportation of Chinese drugs through the U.S. southern border of Mexico and the U.S northern border with Canada.  Both nations could, if they wanted, crack down on the illegal and dangerous drug trade; neither has prioritized the problem. Again, 100,000+ Americans are killed each year.  Think about it.  WATCH: 

“This is the way you run the country,” Lutnick said on NBC News’s “Meet the Press” with Kristen Welker. “You shut the border. You get our neighbors to do their job. It’s not only us who has to do their job. Why are our neighbors, who live and breathe off our economy, not taking care of America?”

“You have to remember this is a drug-related issue,” Lutnick said. “You’ve got fentanyl pouring into this country, killing 75,000 Americans, autopsied. And the president, you know, thinks it’s many, many more, multiples more.”

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Things in South Texas look a little sketchy.  A Texas rancher was killed by an Improvised Explosive Device, and the warning from the Texas AG Commissioner is stark:

[SOURCE]

Meanwhile Mexican President Claudia Sheinbaum is proposing changes to the Mexican constitution in order to protect the Cartels from the designation as terrorists by the United States.

MEXICO CITY — Mexico President Claudia Sheinbaum said Thursday she will propose constitutional reforms aimed at protecting Mexico’s sovereignty after U.S. President Donald Trump’s administration designated six Mexican drug cartels as foreign terrorist organizations.

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A notice in the federal register [SEE HERE] scheduled to be published on February 20, 2025, outlines how the U.S. State Department under Marco Rubio intends to designate Tren de Aragua, the Sinaloa Cartel and MS13 as Foreign Terrorist Organizations.

In combination with enhanced actions by the Dept of Homeland Security, Customs and Border Patrol and the U.S. Treasury Dept., the designation opens up a lot of authority for the U.S. government to target not only the gangs, but any entity or enterprise who supports their activity; including the government of Mexico.

WASHINGTON – […] This designation allows the U.S. to impose financial sanctions on these groups and people connected to them, and cooperate with allies to cull cartels. It also allows the U.S. to declare members of these groups as “inadmissible” to the country and ineligible for immigration benefits.

It’s not immediately clear how far these sanctions might go — or who they may target. The State Department did not respond to a request for comment.

The move follows President Donald Trump’s latest efforts to crack down on cartels. On Jan. 20, Trump signed an executive order that established a pipeline for cartels and other international groups that “constitute[d] a national security threat beyond that posed by traditional organized crime” to be labeled as global terrorists.

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Both Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum have agreed to terms established by President Trump to combat drug trafficking and secure their perspective borders.

Mexico agrees to put 10,000 troops on the USA border to immediately begin security efforts. Canada agrees to bolster their 10,000-border patrol and security officers, establish a joint task force to combat organized crime, create a new intelligence directive on organized crime and fentanyl, and appoint a Fentanyl Czar.

[Source]

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Secretary of State Marco Rubio is traveling through Panama, El Salvador, Costa Rica, Guatemala and the Dominican Republic as he represents President Trump and the new administration.  He’s doing great.

Today, Secretary of State Marco Rubio delivered remarks to reporters in El Salvador discussing his role as Acting Director of USAID after President Trump and Elon Musk moved to incorporate USAID into the State Department.  Secretary Rubio repeated that USAID must align with U.S. foreign policy and the national interests of the U.S. government.

Citing the “uncooperative” nature of the USAID leadership acting as an independent entity, Secretary Rubio announced he is now Acting Director of USAID with the intention of removing all elements who operate against the direct U.S. interests he outlined.  Additionally, Secretary Rubio affirmed the positive nature of President Trump’s call with Mexican President Claudia Sheinbaum [Details soon]. WATCH:

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WASHINGTON, Feb 2 (Reuters) – The Trump administration over the weekend put on administrative leave dozens more staff at U.S. Agency for International Development, three sources familiar with the move said, as it moves to abolish the agency’s independence and bring it under the control of the State Department.

Nearly 30 career staff in the agency’s Legislative and Public Affairs bureau lost access overnight to their emails, the sources said, bringing the total number of senior USAID career staff who have been put on leave over the past week close to 100.

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