
A few months back, I did a post discussing the internal contradictions of global nationalism. In yesterday’s election in Canada, we saw an almost perfect example of that problem:
“Poilievre had been running a disciplined and effective campaign which had him with a 25-point lead in our final poll of 2024,” Graves told me. Poilievre’s argument, he said, boiled down to “Canada broken, Trudeau bad, and axe the [carbon] tax.” . . . But suddenly everything was “radically disrupted” by several factors, Graves said, like Trudeau’s departure from the race in January.
However, the “most important” disruption for Poilievre was the “visceral recoil” Canadians felt when they heard Trump talk about annexation.
Starting in February, Trump launched a trade war against Canada, with on-again, off-again tariffs that left Canadians reeling. A wave of nationalism swept the country, with Canadians booing the American national anthem at hockey games, boycotting U.S. products, and all but abandoning cross-border travel.
This put Poilievre in a near-impossible position. Much of his base—including many of his MPs—admire Trump. But with Trump openly attacking Canada, and with Poilievre’s own anti-woke rhetoric and disdain for the mainstream media, he found himself trapped. Attempts to distance himself from Trump could alienate core supporters, while embracing the American president would push away everyone else.
Mark Carney is the leader of what is expected to be a new Liberal government in Canada (in coalition with a smaller party.) He previously served as head of both the Bank of Canada and the Bank of England. (Sadly, America is too nationalistic to contemplate foreign central bankers.) As far as I know, no central banker has formally endorsed NGDP targeting, but Carney may have come closer than any other. Here are some comments that he made back in December, 2012:
“If yet further stimulus were required, the policy framework itself would likely have to be changed. For example, adopting a nominal GDP (NGDP)-level target could in many respects be more powerful than employing thresholds under flexible inflation targeting. This is because doing so would add “history dependence” to monetary policy. Under NGDP targeting, bygones are not bygones and the central bank is compelled to make up for past misses on the path of nominal GDP …
However, when policy rates are stuck at the zero lower bound, there could be a more favourable case for NGDP targeting. The exceptional nature of the situation, and the magnitude of the gaps involved, could make such a policy more credible and easier to understand.
Of course, the benefits of such a regime change would have to be weighed carefully against the effectiveness of other unconventional monetary policy measures under the proven, flexible inflation-targeting framework.”
PS. I would argue that the single most consequential action of President Trump’s first 100 days (for better or worse) was his trade war with Canada, which clearly prevented the election of a Conservative administration. Before the trade war, the Conservatives were set to win by a historic landslide.
Next up, Australia:
SYDNEY, April 29 (Reuters) – Australian university student Jessica Louise Smith says she will cast her vote in Saturday’s general election with only one objective: avoiding the “worst possible” outcome of a right-wing government.The 19-year-old said the prospect of conservative opposition leader Peter Dutton winning power was “very frightening”, after seeing the disruption caused by Donald Trump in the United States.
As far as I can tell, the president’s two major complaints about Canada are (1) that Americans still receive a small amount of fentanyl over the border, and (2) that the United States has a small trade deficit with the country — both of which, quite obviously, would end up being more difficult to remedy were Canada to become a state. If Canada were, indeed, to enter the Union, it would be tougher, not easier, to control the flow of illicit goods between it and the other 50 states, and it would be flatly unconstitutional for Congress to do anything about the trade deficit.
READER COMMENTS
David Henderson
Apr 29 2025 at 4:09pm
The way Trump messed with Canada has me very upset. Call it a hunch, but I don’t think Trump cared about what he did to Canada.
Don Geddis
Apr 29 2025 at 4:25pm
Trump doesn’t care what he does to anyone. Canada isn’t special. Trump’s transactional calculus is about whether the action is good for Trump. The suffering of others doesn’t particularly enter into it. He’s not a sadist; he doesn’t actively seek to cause others to suffer. But the suffering of others has no impact on his choices. The only question (for Trump) is whether Trump gains or loses (money or power). What happens to others is irrelevant.
David Henderson
Apr 29 2025 at 6:03pm
I think you’re right.
Student
Apr 29 2025 at 7:29pm
Well I am surprised by how quickly things moved. I felt this vibe was going to last half a decade to a decade.
It’s cooked already. I think we will see a reactionary to the reactionary wave that is one of the largest in recent memory.
Don’t think this is a good thing because the other side is also crazy. The moderate centrist has not emerged. We have tired old Bernie and other same ole same ole’s out there.
I am sensing 10-20 point swings. Man I hope a common sense moderate centrist steps up.
Scott Sumner
Apr 30 2025 at 12:22pm
Well, isn’t Carney a bit more centrist than Trudeau?
bill
Apr 29 2025 at 8:57pm
I’m trying to find good data showing trade deficits/surpluses by state.
Craig
Apr 30 2025 at 12:12am
I think the nature of the inquiry will confound precision unfortunately. There is a wiki on it here: https://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_exports_and_imports
Of note on that list is that imports into TN as a % of TN’s state GDP is 23.1% and KY is right above that with 25.8%. With respect to TN I have to think that has something to do with Memphis being a Fedex hub and I’m pretty sure UPS is Louisville, KY. Of course this strongly suggests the import is being counted by port of entry rather than ultimate destination.
robc
Apr 30 2025 at 9:08am
Correct about Louisville and UPS. Although UPS is less centralized than FedEx, but Louisville is the largest hub for UPS.
Economic development officials in KY sell the fact that some large X% of the population is within Y trucking hours of the state.
Scott Sumner
Apr 30 2025 at 12:24pm
When I was young, I recall reading that California consistently ran big deficits with the East Coast. But I don’t think that was based on hard data, more on the fact that California investment (very high) was much greater than California savings.
Mactoul
Apr 30 2025 at 3:20am
Globalized nationalism is neither new nor unusual. Nationalism is all over Asia. There is not one Asian country in which Trump would be the least bit out of place. They all make threats to annex or dominate their neighbors and ethnic minorities one way or other.
It is not obvious why Trump’s rhetoric should sink Canadian Conservatives. To lose to LIberals on nationalism is pathetic. But the Canadian response to Trump’s offer to merge the two countries is also nationalistic. What is wrong with merging with America? Isn’t it a great honor? What do the Canadians lose by it?
john hare
Apr 30 2025 at 4:26am
Or if Canada annexed the US. What do we have to lose by that?
Jon Murphy
Apr 30 2025 at 9:19am
I do not understand this line of thought.
Why is it an “honor” to be unwillingly annexed by the US, but the people who come here willingly and want to be part of the US (immigrants, legal and otherwise) are a bad thing?
Brandon
Apr 30 2025 at 8:28pm
Jon,
Let’s steelman this argument instead. Can you answer this?
What do Canadians lose by merging with the US?
I ask because US isolatio — oops, I mean “non-interventionists” – cannot seem to imagine a world where national sovereignty (and especially the concept of “borders,” which national sovereignty necessarily relies upon as a concept) is unimportant…
steve
Apr 30 2025 at 10:24am
The point about Asia is well taken. They have lots of countries run by authoritarians and those that dont have dictators are poorly run countries that are pretty poor. For some reason Trump wants us to function more like those countries, or as Scott says banana republics, where he has total power to do whatever he wants. Nations where the majority of people dont like the idea of one man running a country with few restraints wont want to be part of that.
Steve
Scott Sumner
Apr 30 2025 at 12:26pm
“They all make threats to annex or dominate their neighbors”
You aren’t helping you cause by making this sort of silly claim.
Arqiduka
Apr 30 2025 at 6:12pm
Indeed it wouldn’t
Andrew_FL
Apr 30 2025 at 7:31pm
I don’t worry about trade deficits, but it would help Canadian workers, who would be American workers. Therefore it would help American workers. That wasn’t so hard.
Brandon
Apr 30 2025 at 8:32pm
Scott,
Thanks for this, and keeping this important topic alive. In 2022, the journal Cosmos + Taxis ran a special issue on the topic of libertarian foreign policy. One of the articles that came out of that issue asked what a populist world order would look like (pdf).
You might like it. Heck, you might like the entire issue…
Mactoul
May 1 2025 at 10:52am
The Canadian elections were pretty curious.
Mark Steyn
“Carney was elected Liberal leader with eighty-six per cent of the vote. Which is pretty impressive for a guy who’s been out of the country for twelve years, has never been elected to anything, and had minimal name recognition. I mean, how many Governors of the Bank of England, or of Canada, or of any central bank, can the average Canadian voter name?”