Date: Tuesday, 30 December 2025
https://ericzuesse.substack.com/p/trump-has-destroyed-the-us-economy
https://theduran.com/trump-has-destroyed-the-u-s-economy-nato-and-the-eu-are
Trump has destroyed the U.S. economy; NATO and the EU are ending.
30 December 2025, by Eric Zuesse. (All of my recent articles can be seen here.)
The best single example of how Trump has destroyed the U.S. economy is Canada’s crushing retaliation against Trump’s tariffs against Canada’s products, and Canada’s joining the new EU-created anti-Russian military alliance SAFE (Security Action For Europe), and abandoning the U.S.-created anti-Russian military alliance NATO. The economic damage that he has done cannot be separated from the broader weakening of U.S. power and influence in the world. The following two video presentations by George Conway provide the details. After those here, will be further insight on this, by the retired Colonel Douglas Macgregor:
——
https://www.youtube.com/watch?v=opQJtWwTRLs
“Trump's Tariffs Backfired BADLY - Canada's $1T Response Explained | George Conway”
28 December 2025, Trend Report USA, 92,736 views
Canada just announced a $1 TRILLION economic strategy that permanently changes North American trade. Here's why this is bigger than anyone realizes.
When Trump imposed 25% tariffs on Canadian goods in February 2025, everyone expected Canada to come back to the negotiating table. Instead, Prime Minister Mark Carney unveiled the most aggressive economic independence plan in Canadian history - and it's already working.
0:00
Breaking news out of Ottawa that nobody
0:02
saw coming. While everyone was focused
0:04
on tariff negotiations and trade
0:06
exemptions, Canada just dropped a 1
0:09
trillion dollar economic bombshell that
0:11
could permanently reshape North American
0:13
trade. And here's what has Washington
0:16
completely blindsided. This isn't about
0:18
getting back to business as usual. This
0:20
is about making sure Canada never
0:22
depends on American markets the same way
0:24
again. Prime Minister Mark Carney just
0:27
unveiled the most aggressive economic
0:29
independence strategy in Canadian
0:30
history, and the timing couldn't be more
0:33
calculated. While Trump's tariffs were
0:35
supposed to bring Canada to the
0:36
negotiating table, they did something
0:39
else entirely. They gave Carney the
0:41
political ammunition he needed to
0:43
transform Canada's entire economic
0:45
foundation. And once you understand
0:48
what's actually happening here, you'll
0:50
realize this changes everything. Let me
0:52
take you back to where this all started
0:54
because the timeline is absolutely
0:56
critical to understanding why this
0:58
moment matters so much.
1:01
February 1st, 2025, President Trump
1:04
signs executive orders imposing 25%
1:08
tariffs on nearly all Canadian goods.
1:11
Energy gets a slightly lower rate at
1:13
10%. But make no mistake, this was the
1:15
most aggressive trade action against
1:17
America's largest trading partner in
1:20
modern history. The stated goals were
1:22
straightforward enough. Trump wanted
1:25
better cooperation on border security,
1:28
more defense spending to meet NATO
1:30
commitments, and favorable adjustments
1:32
to the trade balance. These weren't
1:34
unreasonable asks on paper. The question
1:37
was always about the execution. Canada
1:40
immediately fired back with $155 billion
1:43
in counter tariffs targeting American
1:45
steel, aluminum, and agricultural
1:48
products from politically sensitive
1:50
states. We're talking about farmers in
1:52
Montana, North Dakota, and Minnesota
1:54
getting hit hard. Wheat and soybean
1:57
exports to Canada dropped 41% almost
2:00
overnight. The pain was immediate, and
2:02
it was concentrated exactly where it
2:04
would create maximum political pressure.
2:07
Then came the pause. Both sides agreed
2:10
to a 30-day negotiation window, and
2:12
there was this brief moment where it
2:14
looked like cooler heads might prevail.
2:16
But March 4th hit, and those tariffs
2:19
went fully into effect. The trade war
2:21
wasn't theoretical anymore. It was real
2:24
and it was causing serious economic
2:26
disruption on both sides of the border.
2:28
Now, here's where the story takes an
2:30
unexpected turn that caught everyone off
2:32
guard. While all this was happening,
2:34
Canadian politics was in complete chaos.
2:37
Justin Trudeau, facing abysmal approval
2:40
ratings and pressure from within his own
2:42
party, announced his resignation in
2:44
January 2025. The Liberal Party needed a
2:48
new leader, and they needed one fast.
2:50
Enter Mark Carney. This guy wasn't your
2:53
typical politician. He'd served as
2:55
governor of the Bank of Canada from 2008
2:58
to 2013, then became the first
3:01
non-British governor of the Bank of
3:02
England, running that institution until
3:05
2020. He understood global finance at
3:08
the highest levels and he had
3:10
credibility with international markets
3:12
that most politicians could only dream
3:14
about. March 9th, 2025, Carney wins the
3:18
Liberal Party leadership in what can
3:20
only be described as a landslide. He
3:22
becomes prime minister immediately,
3:25
making him the first Canadian PM to hold
3:27
the office without ever being elected to
3:29
it beforehand. But he didn't waste any
3:31
time with that technicality. He called a
3:34
snap election for late April.
3:36
campaigning on a single message that
3:38
resonated across the entire country.
3:40
Economic independence. No more being
3:43
vulnerable to unilateral American trade
3:45
actions. No more having 75% of exports
3:48
dependent on a single market that could
3:50
turn hostile overnight. That message
3:53
connected with Canadian voters in a way
3:55
that transcended traditional party
3:57
lines. Conservatives who normally
3:59
opposed government intervention,
4:01
progressives who wanted stronger social
4:03
programs, business leaders worried about
4:06
supply chain stability. Everyone saw the
4:08
tariff situation as proof that something
4:11
fundamental had to change. Carney won a
4:13
minority government, but he had the
4:15
political capital to move aggressively.
4:17
And that's exactly what he did. Fast
4:19
forward to November 4th, 2025. Car's
4:22
government releases budget 2025, and the
4:25
numbers are staggering. $280 billion in
4:28
direct government capital spending over
4:31
5 years. But that's not even the full
4:33
story. The budget is designed to
4:35
catalyze approximately $1 trillion in
4:38
total investment when you factor in
4:40
private sector participation. Let that
4:43
sink in for a moment. $1 trillion being
4:46
mobilized to fundamentally restructure
4:49
Canada's economic relationships. The
4:52
deficit projection is 78.3 billion,
4:55
which represents a 116% increase from
4:59
the previous fiscal year. Under normal
5:01
circumstances, that kind of deficit
5:03
expansion would trigger panic in
5:06
financial markets and fierce political
5:08
opposition. But here's why it didn't.
5:10
Canada maintains a AAA credit rating and
5:14
bond markets responded positively
5:16
because investors understood the
5:17
strategic logic. This wasn't reckless
5:20
spending driven by political
5:21
considerations. This was calculated
5:24
investment in permanent infrastructure
5:26
that would reduce long-term economic
5:28
vulnerability. The priority sectors tell
5:31
you everything you need to know about
5:32
the strategy. critical infrastructure
5:35
development, including ports on both
5:37
coasts to facilitate Asian and European
5:39
trade, clean energy systems to reduce
5:42
dependence on integrated North American
5:44
power grids, advanced manufacturing
5:46
capabilities in sectors where Canada has
5:49
competitive advantages, technology
5:51
development across artificial
5:52
intelligence, quantum computing and
5:55
biotechnology, critical minerals
5:57
extraction and processing because every
5:59
major economy is competing for the raw
6:02
materials essential to battery
6:03
production and semiconductor
6:05
manufacturing. These aren't random
6:07
political priorities. This is a coherent
6:10
industrial policy designed to position
6:12
Canada for the global economy of 2030
6:15
and beyond with or without preferential
6:18
American market access. But the most
6:20
sophisticated element of Carney's plan
6:22
is something called the by Cananadian
6:24
procurement framework. And this is where
6:26
you see his background as a central
6:28
banker showing through in every detail.
6:31
Any corporation that wants to access the
6:33
massive tax credits and subsidies in
6:36
this budget has to commit to sourcing a
6:38
minimum of 60% of inputs from Canadian
6:42
suppliers or from allied trading
6:44
partners. Notice that language. Allied
6:48
trading partners. This isn't about
6:50
isolation or crude economic nationalism.
6:53
This is about building a coalition of
6:56
reliable partners who won't use trade
6:59
access as a weapon every time there's a
7:01
political disagreement. The major
7:03
projects office deserves special
7:05
attention because it addresses one of
7:07
the biggest complaints businesses have
7:09
always had about Canada.
7:12
Regulatory delays. Under the old system,
7:16
major infrastructure projects could take
7:18
five to seven years just to get through
7:20
environmental reviews and regulatory
7:23
approvals. The major projects office
7:25
creates a centralized federal provincial
7:27
coordination mechanism designed to cut
7:29
that timeline down to 18 to 24 months
7:32
for projects deemed nationally
7:34
significant. That's the kind of
7:36
regulatory efficiency that makes
7:38
international investors take notice.
7:40
Then there's the Build Canada Homes
7:42
Agency with $13 billion in funding
7:46
specifically targeting housing
7:47
construction. The $51 billion build
7:51
communities strong fund for municipal
7:53
infrastructure.
7:54
Defense spending increases that will
7:56
bring Canada to the NATO 2% target by
7:59
2028. But critically, with 40% of that
8:02
spending going to domestic defense
8:04
manufacturing,
8:05
Canada isn't just buying equipment from
8:08
foreign suppliers. They're building the
8:10
industrial capacity to produce advanced
8:12
weapons systems, aerospace components,
8:15
naval vessels, and cyber security
8:17
technology domestically. Every dollar
8:20
spent on defense becomes a dollar
8:21
invested in Canadian manufacturing
8:23
capability and high-skilled employment.
8:26
Now, let's talk about the trade
8:27
diversification offensive because this
8:30
is where Carney's strategy moves from
8:32
defensive to genuinely ambitious.
8:35
October through November 2025, Carney
8:38
embarked on an extensive Asia trip that
8:41
signals exactly where Canada sees its
8:43
economic future. He met with leaders
8:46
from ASEAN countries, the Association of
8:48
Southeast Asian Nations representing 700
8:51
million consumers and a combined GDP
8:54
exceeding $5 trillion.
8:57
Canada is actively negotiating
8:59
comprehensive free trade agreements with
9:01
multiple ASEAN members and in November
9:04
they signed their first bilateral trade
9:06
deal with Indonesia. That's significant
9:09
because Indonesia is Southeast Asia's
9:11
largest economy and has been looking for
9:14
reliable North American partners who
9:16
aren't caught up in USChina tensions.
9:19
But here's the part that really raised
9:20
eyebrows in Washington. Carney met with
9:23
Chinese President Xi Jinping and both
9:26
leaders described it as a turning point
9:28
in bilateral relations. Canada isn't
9:31
choosing sides in the US China rivalry.
9:34
They're positioning themselves as a
9:35
neutral trading partner who can do
9:37
business with both. That kind of
9:39
strategic flexibility is exactly what
9:41
middle power countries need in an
9:44
increasingly multipolar world. The
9:46
European partnerships are being
9:48
strengthened through the existing CEDA
9:49
framework. the comprehensive economic
9:51
and trade agreement that's been in place
9:53
since 2017, but underutilized.
9:56
Canada is now pushing to expand trade
9:59
volumes with Germany, France, and the
10:01
Netherlands, specifically in clean
10:03
technology, critical minerals, and
10:05
advanced manufacturing. Carney's stated
10:08
goal is explicit and ambitious. Reduce
10:11
Canadian export dependence on the United
10:13
States from approximately 75% down to
10:17
below 60% within a decade. That 15
10:20
percentage point shift might not sound
10:22
dramatic, but in trade terms, it
10:24
represents a fundamental reorientation
10:26
of an entire national economy. And
10:29
here's what makes this particularly
10:31
concerning from an American perspective.
10:34
the infrastructure investments being
10:36
made right now, the port expansions on
10:38
the Atlantic and Pacific coasts, the
10:41
rail network upgrades connecting
10:42
Canadian producers to new export
10:44
terminals, the telecommunications
10:47
systems that create redundancy. These
10:49
are permanent physical changes to
10:51
Canada's economic geography. Once those
10:54
investments are complete, once those new
10:56
trade relationships are operationalized
10:58
with long-term contracts and established
11:01
business relationships, you can't
11:03
reverse that with a policy change or a
11:05
new trade agreement. The diversification
11:08
becomes structurally permanent. So
11:10
what's the real impact of all this on
11:13
both countries? Let's look at the actual
11:15
economic data because the consequences
11:18
are already showing up in quarterly
11:20
reports and trade statistics. For
11:22
Canadian industries, the initial
11:25
disruption from tariffs has evolved into
11:27
what economists are calling a resilience
11:29
dividend. Take steel as a concrete
11:32
example. US tariffs on Canadian steel
11:35
reached 50% at their peak before
11:38
settling at 25% under partial USMCA
11:41
exemptions. Canadian steel makers lost
11:44
approximately $2.3 billion dollar in
11:47
exports during the first quarter of 2025
11:50
and industry analysts were predicting
11:52
widespread plant closures. But Carney's
11:54
government moved fast. They imposed
11:57
tariff rate quotas on steel imports to
11:59
Canada from non-allied nations
12:01
protecting domestic producers. They
12:04
provided 1.2 2 billion in federal loan
12:06
guarantees to help companies retool
12:08
their facilities for Asian and European
12:10
market specifications. The results have
12:13
been remarkable. By the fourth quarter
12:15
of 2025, Canadian steel exports to the
12:18
European Union were up 34%
12:20
year-over-year. Shipments to Japan
12:23
increased 28% compared to the same
12:26
period in 2024. Canadian producers
12:29
sacrifice some American market share,
12:31
yes, but they're no longer dependent on
12:33
a single customer who can impose
12:35
restrictions overnight. For a midsized
12:38
automotive parts supplier in Ontario,
12:41
let's say a company with 300 employees
12:44
that used to send 85% of production to
12:47
Detroit assembly plants, the calculation
12:49
has completely changed. They're now
12:51
receiving government incentives to
12:53
diversify in multiple directions. New
12:56
capital investment tax credits if they
12:58
build capacity to serve Asian automotive
13:01
markets. Procurement preferences if they
13:03
supply components to Canadian electric
13:05
vehicle projects. Export insurance
13:08
programs to reduce financial risk when
13:10
exploring new international customers.
13:12
The American side of this equation tells
13:15
a very different story. And it's not a
13:17
pleasant one for industries that have
13:19
depended on seamless Canadian trade for
13:21
decades. The United States exports
13:24
approximately $350 billion in goods to
13:27
Canada annually. That's our second
13:29
largest export market after Mexico. When
13:32
Canada imposed retaliatory tariffs in
13:35
March 2025, American farmers in Montana,
13:39
North Dakota, and Minnesota saw wheat
13:41
and soybean exports drop 41%
13:44
year-over-year. Even after those
13:47
retaliatory tariffs were removed in
13:49
September, market share hasn't recovered
13:52
because Canadian agricultural buyers
13:54
established new supplier relationships
13:57
in Australia, Brazil, and Argentina
13:59
during the disruption. Those
14:01
relationships don't disappear just
14:04
because tariffs go away. The energy
14:07
sector tells a similar story. Canada
14:09
supplies approximately 4.3 million
14:12
barrels of crude oil per day to the
14:14
United States, making them our largest
14:17
foreign supplier. The 10% tariff on
14:19
Canadian energy added roughly $15 per
14:22
barrel in costs for Midwest refineries
14:25
that lack pipeline access to domestic
14:27
shale production. That translated to an
14:30
additional 35 cents per gallon for
14:32
consumers in Wisconsin, Michigan, Ohio,
14:34
and Illinois throughout spring and
14:36
summer 2025.
14:38
Political backlash in those swing states
14:40
became so intense that the White House
14:42
granted exemptions relatively quickly,
14:45
but the damage to consumer confidence
14:46
was already done. For the broader North
14:49
American economy, supply chains that
14:51
took three decades to build through
14:53
NAFTA and USMCA are experiencing
14:57
structural changes that may prove
14:59
irreversible. A single automobile
15:01
assembled in Michigan contains an
15:03
average of $3,400 in Canadian sourced
15:06
components. When those parts suddenly
15:09
face 25% tariff costs, even temporarily,
15:13
automakers like Ford and General Motors
15:16
had to absorb the additional expenses to
15:18
maintain price competitiveness. Ford's
15:20
second quarter 2025 earnings call
15:23
specifically cited tariff related supply
15:26
chain disruptions as responsible for
15:28
$1.2 2 billion in lost revenue. That's
15:31
not a minor inconvenience. That's a
15:34
material impact on one of America's most
15:37
iconic manufacturing companies hitting
15:39
their bottom line in ways that
15:40
shareholders and workers both felt
15:43
immediately. So, what are the experts
15:45
saying about all this? The assessment
15:47
from economists and international
15:49
relations analysts has been striking in
15:52
its consistency across the political
15:54
spectrum. Lawrence Summers, former
15:57
Treasury Secretary under President
15:59
Clinton, wrote in the Financial Times
16:02
that Prime Minister Carney has
16:04
demonstrated what happens when a
16:06
sophisticated economy with strong
16:08
institutions decides it won't accept a
16:10
subordinate negotiating position. He
16:14
called the $1 trillion mobilization
16:16
economically impressive and potentially
16:18
a blueprint for other middle power
16:20
economies, watching American trade
16:22
policy become increasingly
16:24
unpredictable. Trade economists are
16:27
drawing historical parallels that should
16:29
concern anyone who cares about American
16:31
influence in the global economy.
16:33
Multiple analysts have compared this
16:35
situation to the Smoot Holly Tariff Act
16:38
of 1930 when America substantially
16:41
raised tariffs to protect domestic
16:43
industries during the Great Depression.
16:46
Trading partners didn't just impose
16:48
retaliatory measures and weight. They
16:50
systematically built entirely new trade
16:52
networks that bypassed the United
16:54
States. Global trade volumes contracted
16:57
by 66% over four years. American export
17:01
industries collapsed in ways that took
17:03
decades to recover from. The United
17:05
States lost its position as the
17:07
undisputed center of global commerce and
17:10
arguably never fully regained the
17:12
dominance it enjoyed before that
17:13
catastrophic policy error. The concern
17:16
among trade strategists is that we're
17:18
watching similar dynamics emerge today,
17:21
just with more sophisticated execution
17:23
and in a more complex global
17:25
environment. Trevor Tom, a trade
17:28
economist at the University of Calgary,
17:30
who has published extensively on North
17:32
American economic integration, offered
17:35
an analysis that cuts right to the heart
17:37
of the matter. The Trump administration
17:40
wanted to use tariffs as negotiating
17:42
leverage to extract concessions.
17:45
Instead, they provided Canada with the
17:47
political justification to make
17:48
investments that were economically
17:51
rational but politically difficult under
17:53
normal circumstances.
17:55
Every Canadian provincial premier who
17:58
was initially skeptical of deficit
18:00
spending supported the plan once the
18:02
tariff situation made economic
18:04
diversification a national security
18:07
priority rather than a partisan policy
18:10
preference. That's a strategic
18:12
miscalculation of significant
18:14
proportions. Within Canada, the
18:17
political consequences have been equally
18:19
notable. Carney's approval rating
18:21
reached 62% by December 2025. a
18:25
remarkably high figure for a prime
18:26
minister implementing massive deficit
18:29
spending during economic uncertainty.
18:31
The explanation is straightforward when
18:33
you look at the polling. Canadian voters
18:35
across the political spectrum believe
18:37
he's standing up for national interests
18:39
rather than accepting a subordinate
18:41
position. That narrative resonates well
18:44
beyond traditional Liberal Party
18:46
constituencies into conservative regions
18:49
that typically resist government
18:50
intervention. The tariff situation gave
18:53
Carney permission to implement
18:55
industrial policy that would have faced
18:58
fierce opposition under any other
19:00
circumstances. Looking ahead, the
19:02
situation presents serious challenges
19:04
for American trade policy that aren't
19:06
being adequately addressed in
19:08
Washington. The USMCA agreement comes up
19:11
for mandatory review in July 2026, now
19:15
just 6 months away. President Trump has
19:17
already characterized the agreement as
19:19
potentially having served its purpose,
19:22
signaling possible interest in
19:24
fundamental renegotiation or even
19:26
withdrawal. If the United States pushes
19:29
for substantial changes or considers
19:31
leaving the agreement entirely, Carney
19:33
has made explicitly clear through both
19:36
public statements and policy actions
19:39
that Canada will not be negotiating from
19:41
a position of economic desperation. They
19:44
will have developed alternatives and
19:46
they will be prepared to walk away if
19:49
the terms aren't acceptable. That's the
19:51
sophisticated element of the $1 trillion
19:54
strategy that many observers are
19:56
missing. It's not fundamentally about
19:58
punishing the United States or severing
20:01
economic ties. Canada remains deeply
20:04
interested in productive relationships
20:05
with its southern neighbor, but the
20:07
strategy is about ensuring Canada never
20:10
again faces a choice between economic
20:12
survival and national policy
20:15
sovereignty. And here's what should
20:17
really concern American policymakers.
20:20
Other allies are watching this situation
20:21
with considerable interest. European
20:24
countries, Japan, South Korea, and other
20:26
traditional partners are taking notes on
20:29
Canada's approach. If a close ally with
20:31
80 years of economic integration can
20:34
successfully diversify away from
20:36
American market dependence when trade
20:38
access becomes unreliable, what's
20:41
stopping others from following the same
20:43
playbook? The strategic implications
20:46
extend far beyond bilateral Canada US
20:49
relations. This is about the fundamental
20:51
question of whether America can maintain
20:53
its position at the center of global
20:55
trade networks while simultaneously
20:58
using market access as a coercive tool
21:00
in political negotiations. Canada is
21:03
betting the answer is no. And they're
21:06
investing a trillion dollars to prove
21:08
it. Adding complexity to an already
21:10
tense situation, Trump has made repeated
21:13
statements about Canada becoming the
21:15
51st state, characterizing it as either
21:18
a joke or serious suggestion, depending
21:20
on the audience. Canadian officials have
21:23
made clear these comments are not
21:25
appreciated and raise fundamental
21:27
questions about how the United States
21:29
views Canadian sovereignty. When you
21:32
combine annexation rhetoric with
21:34
aggressive trade actions, it creates an
21:37
environment where even traditionally
21:39
pro-American Canadian politicians find
21:41
it politically necessary to demonstrate
21:44
independence and distance from
21:46
Washington. So, here's where we stand.
21:48
The Trump administration's tariff
21:50
approach created significant unintended
21:52
consequences. It gave Mark Carney the
21:54
political capital and public support to
21:57
implement a trillion dollar economic
21:59
independence strategy that would have
22:01
faced massive opposition under normal
22:04
circumstances. Canada isn't just
22:06
managing trade disruption defensively.
22:09
They're using it as a catalyst to build
22:11
permanent alternative relationships with
22:13
Asia, Europe, and other regions.
22:16
systematically reducing dependence on
22:18
the American market from 75% down to
22:21
potentially 60% or below over the coming
22:25
decade. The unwinding of North American
22:28
economic integration that took three
22:30
decades to build is creating real costs
22:33
for American workers, farmers, and
22:36
manufacturers who depended on seamless
22:39
Canadian trade. Those impacts are
22:41
showing up in earnings reports,
22:43
employment data, and political dynamics
22:46
in competitive states. And perhaps most
22:49
significantly, the infrastructure
22:50
investments Canada is making right now
22:52
are permanent. Port expansions, rail
22:55
networks, telecommunication systems,
22:57
manufacturing facilities. Once those are
23:00
complete, once those new trade
23:02
relationships are fully operationalized,
23:05
no policy adjustment in Washington can
23:07
simply reverse the economic geography.
23:10
the diversification becomes structurally
23:12
locked in regardless of who occupies the
23:14
White House or what trade agreements get
23:16
negotiated. Trade relationships aren't
23:19
just about tariff rates and balance
23:21
sheets. They're about trust,
23:22
reliability, and mutual benefit between
23:25
nations. Once you damage trust with your
23:28
closest ally and most integrated trading
23:30
partner, no amount of negotiating
23:32
leverage can immediately restore what's
23:34
been broken. Canada is making a
23:37
calculated bet that economic security
23:39
through diversification is worth the
23:41
short-term costs of reduced American
23:44
market access. Time will tell if that
23:46
bet pays off, but one thing is
23:48
absolutely certain. The North American
23:51
economic relationship that defined both
23:53
countries for nearly a century is
23:55
changing in fundamental ways. And those
23:58
changes are happening right now whether
24:00
Washington is paying attention or not.
24:02
The real question isn't whether Canada
24:04
can succeed with this strategy. The real
24:07
question is what happens when other
24:08
American allies look at Canada's
24:11
approach and decide it's a model worth
24:13
following for their own economic
24:15
security. Because if that happens, the
24:17
United States won't just be losing its
24:19
largest trading partner. It'll be losing
24:21
its position at the center of the global
24:23
economic system that it built and
24:25
dominated for the better part of a
24:27
century. And unlike tariffs, that's
24:30
something you can't reverse with an
24:31
executive change.
——
https://www.youtube.com/watch?v=ELimY71O7ug
“Canada Just Shocked the World: The $244 Billion Deal Changes Everything | George Conway”
26 December2025, Trend Report USA, 256,178 views
Canada just pulled off the most shocking geopolitical move of 2025, and almost nobody is talking about it. While Donald Trump was busy threatening tariffs and trade wars, Prime Minister Mark Carney secured Canada's entry into the European Union's €150 billion SAFE defense program—making Canada the ONLY non-European country ever admitted.
This isn't just another trade deal. This is a complete restructuring of Western power dynamics that could end 70+ years of Canadian dependence on the United States.
0:00
While Donald Trump was busy threatening
0:02
Canada with tariffs and making jokes
0:04
about turning it into the 51st state,
0:07
something happened behind closed doors
0:09
that nobody saw coming. On December 1st,
0:12
2025, Canada pulled off what might be
0:15
the most brilliant strategic maneuver in
0:18
modern Western diplomacy, and the
0:20
consequences are just starting to sink
0:22
in. This isn't about trade deals or
0:24
political theater. This is about power,
0:27
money, and the complete restructuring of
0:30
how the Western world does defense. By
0:33
the time you finish watching this,
0:34
you'll understand why this quiet
0:36
announcement might have just changed
0:37
everything. The deal nobody expected.
0:40
Here's what went down. The European
0:42
Union has been building something called
0:44
SAFE, which stands for Security Action
0:47
for Europe. Think of it as a massive war
0:49
chest designed to transform Europe's
0:52
military capabilities from the ground
0:53
up. We're talking about $150 billion
0:56
euros, roughly $244 billion Canadian
1:00
dollars in lowinterest loans
1:02
specifically designed to finance defense
1:04
production at scale. This isn't symbolic
1:07
money or feel-good initiatives. This is
1:09
serious capital meant to buy missiles,
1:11
ammunition, drones, artillery systems,
1:14
air defense networks, cyber warfare
1:17
capabilities, and space technology.
1:19
Europe looked at Russia's aggression [so, this too is based on The West’s lie that Russia STARTED the war in Ukraine in 2022, which war the U.S. actually started by its anti-Russian coup in Ukraine in February 2014],
1:22
looked at America's increasingly
1:24
unpredictable commitment to NATO, and
1:26
decided they needed to be able to defend
1:28
themselves. SAFE is the financial engine
1:31
powering that transformation with a
1:34
target date of 2030 to have everything
1:36
operational. Now, here's where it gets
1:39
interesting. SAFE was designed
1:40
exclusively for European Union member
1:43
states. The United Kingdom tried to get
1:45
in after Brexit and got rejected.
1:48
Australia lobbyed for access and didn't
1:50
qualify. Even the United States,
1:53
Europe's traditional security partner
1:55
and the world's largest military power,
1:58
remains completely outside this
2:00
framework. But Canada, Canada just
2:03
became the first and only non-European
2:05
country ever admitted into this
2:07
exclusive club. Let that sink in for a
2:09
second. In the most significant European
2:12
defense initiative since the Cold War,
2:14
the only outside nation with a seat at
2:16
the table is Canada. Not America, not
2:19
Britain, Canada. Why this changes
2:22
everything. To understand why this is
2:24
such a big deal. You need to know where
2:26
Canada was before this happened. For
2:29
decades, more than 70% of Canadian
2:32
defense spending flowed straight to the
2:34
United States. Canadian manufacturers
2:37
built components for American weapons
2:39
systems. Canadian procurement followed
2:42
American standards. The entire defense
2:44
ecosystem north of the border revolved
2:47
around one gravitational center and that
2:49
center was Washington. Canada was
2:51
basically locked into a single supplier
2:53
relationship for almost everything
2:55
related to national security which meant
2:58
they had zero leverage and zero
2:59
alternatives if things went sideways.
3:02
And things have been going sideways.
3:03
Donald Trump spent his first term and
3:06
now his second term threatening Canada
3:08
with tariffs, calling them trade
3:10
cheaters, suggesting they should become
3:12
part of America, and generally treating
3:15
the country like a hostile neighbor
3:17
rather than the closest ally the United
3:19
States has ever had. In early 2025,
3:23
Trump imposed 25% tariffs on most
3:26
Canadian goods, then threatened to
3:28
increase them even higher. He went after
3:30
Canadian lumber, dairy, steel, aluminum,
3:33
and cars, saying he would essentially
3:35
shut down Canada's entire automobile
3:38
industry if they didn't bend to his
3:40
demands. By July 2025, after Canada
3:43
backed Palestinian statehood, Trump
3:45
escalated again, threatening 35% tariffs
3:48
on everything. This wasn't normal trade
3:51
negotiation. This was economic warfare
3:53
against America's largest trading
3:55
partner and nextoor neighbor. But here's
3:57
what makes the timing even more
3:59
remarkable. In January 2025, Justin
4:02
Trudeau announced he was resigning as
4:05
prime minister after nearly a decade in
4:07
power, largely because Canadians were
4:10
fed up with his handling of the Trump
4:12
situation and the country's economic
4:14
problems. The Liberal Party was polling
4:16
26 points behind the opposition
4:18
conservatives and looked headed for
4:20
complete annihilation in the next
4:22
election. Then Mark Carney entered the
4:24
race. Carney wasn't a typical
4:26
politician. He was the former governor
4:28
of both the Bank of Canada and the Bank
4:30
of England. One of the most respected
4:32
financial minds in the world. He won the
4:34
Liberal leadership with an overwhelming
4:36
85.9%
4:38
of the vote in March 2025 and
4:40
immediately took over as prime minister.
4:43
His message was simple. Canada needed to
4:45
stand up to American bullying, diversify
4:48
its relationships, and stop being
4:50
dependent on one unpredictable partner.
4:53
And then Carney did something that
4:54
caught everyone offguard. Back in June
4:57
2025, just three months after taking
5:00
office, he quietly signed a security and
5:03
defense partnership with the European
5:05
Union. Most people didn't pay much
5:07
attention because it looked like another
5:09
diplomatic formality, the kind of thing
5:12
leaders do for photo ops. But that
5:14
agreement was actually the first step
5:16
towards something much bigger. It laid
5:18
the groundwork for Canada to join SAFE.
5:21
And by December 2025, the deal was done.
5:25
Canada was in. Negotiations concluded,
5:27
access secured. What Canada actually
5:30
won. So what does Canada get out of this
5:33
arrangement? First, Canadian defense
5:35
companies now have direct access to
5:37
participate in $150 billion worth of
5:40
defense projects across 27 European
5:43
countries. That's not just export
5:45
opportunities or one-off contracts.
5:47
That's integration into the core
5:49
European defense supply chain for the
5:51
next several decades. When Poland needs
5:53
missiles, when Germany needs drones,
5:55
when France needs ammunition, Canadian
5:57
companies can now compete for those
5:59
contracts on nearly equal footing with
6:01
European firms. Second, and this is
6:04
critical, Canada negotiated exemptions
6:06
from the normal rules. Under SAFE
6:08
guidelines, joint projects typically
6:11
require at least 65% of components to be
6:14
produced within EU member states. That's
6:17
a massive barrier for any outside
6:19
supplier trying to break into the
6:21
European market. But reports indicate
6:23
Canada secured exemptions allowing
6:26
Canadian firms to contribute up to 80%
6:29
of a systems value in specific high
6:32
demand categories. We're talking about
6:34
drones, counter drone systems, missile
6:36
components, ammunition production,
6:39
sensors, and cyber capabilities. areas
6:42
where Canada has developed serious
6:44
expertise but historically couldn't sell
6:47
into Europe because of content
6:49
requirements. Third, this isn't just
6:52
about selling products. Canadian
6:54
companies can now access the same
6:55
lowinterest EU backed financing that
6:57
European firms use. The European Union
7:00
borrows money on global markets using
7:02
its ADA credit rating, which means they
7:05
get incredibly favorable terms. They
7:07
then lend those funds to participating
7:09
governments essentially at cost which
7:11
accelerates procurement timelines and
7:14
removes financing uncertainty for
7:16
Canadian manufacturers. This creates
7:18
predictable long-term production
7:20
schedules that allow them to invest in
7:22
facilities, hire workers, and build
7:25
industrial capacity that takes decades
7:27
to develop. There's even an entry fee to
7:30
join SAFE, though the exact amount
7:32
hasn't been disclosed publicly, which
7:34
gives Canadian firms an even larger
7:36
share of the financing pool. Fourth [and last],
7:39
Canada is establishing a new defense
7:41
investment agency specifically to manage
7:44
SAFE participation. This agency will
7:47
centralize approvals, cut through red
7:49
tape, and coordinate between Canadian
7:52
companies and European procurement
7:54
officials. That's a permanent
7:56
institutional structure designed to
7:58
facilitate billions of dollars in
8:00
transactions over the next 30 to 45
8:02
years. This isn't a short-term trade
8:04
agreement that expires after one
8:06
election cycle. This is a
8:08
multigenerational commitment. The
8:10
geopolitical shockwave. Let's talk about
8:12
what this actually means for the global
8:14
power structure because the implications
8:16
go way beyond defense contracts. For the
8:19
entire postworld war II era, the Western
8:22
alliance system has been built around
8:24
one central pillar, American security
8:27
guarantees. European countries
8:29
underfunded their militaries because
8:31
they assumed the United States would
8:33
always protect them. Canada did the same
8:36
thing. NATO had a target of 2% of GDP
8:39
spent on defense, but Canada routinely
8:42
spent only about 1.3% to 1.4%, 4% making
8:46
it one of the worst performers in the
8:48
alliance. Critics called Canada a free
8:51
rider, a country exploiting American
8:53
power while investing its money
8:55
elsewhere. But what happens when that
8:57
American security guarantee starts to
8:59
look unreliable? What happens when the
9:02
US president openly questions whether
9:04
NATO is worth defending, threatens
9:06
allies with tariffs, and suggests
9:09
annexing neighboring countries? European
9:12
leaders looked at that situation and
9:14
decided they couldn't afford to depend
9:16
entirely on Washington anymore. That's
9:18
why they created SAFE. That's why
9:20
they're rearming. And that's why they
9:22
invited Canada to join them. Think about
9:25
the message this sends. The European
9:27
Union, representing 27 democracies in
9:30
the world's second largest economy,
9:32
looked around for a reliable partner to
9:34
help build its defense industry and
9:36
chose Canada over everyone else. They
9:39
didn't pick Australia, even though it's
9:41
part of the Five Eyes Intelligence
9:42
Alliance. They didn't pick Japan or
9:44
South Korea, even though both are major
9:46
American allies in Asia. They picked
9:48
Canada, and they did it specifically
9:50
because Canadian leaders have proven
9:52
they don't weaponize trade for political
9:54
gain, don't impose surprise export bans,
9:57
and don't abandon agreements after
9:59
elections. Now, Canada has something it
10:01
never had before, leverage. For decades,
10:04
if the United States threatened Canada
10:06
economically, Canada had no choice but
10:09
to negotiate from a position of weakness
10:11
because there were no alternatives. But
10:14
now, if Trump or any future American
10:16
president tries to bully Canada,
10:18
Canadian officials can point to Europe
10:20
and say, "We have other options. We're
10:22
not dependent on you anymore. We can
10:24
sell our defense technology to 27 other
10:27
countries that actually value
10:28
partnerships over domination." That's
10:31
not just economic diversification.
10:33
That's strategic autonomy and it
10:35
completely rebalances the power dynamic
10:37
in North American relations. The risks
10:40
nobody's talking about. But let's be
10:42
real about something. This deal isn't
10:44
all upside and there are serious
10:46
complications that could derail the
10:48
whole thing. First, the European Union
10:50
is not a unified actor. It's 27 separate
10:53
countries with different histories,
10:55
different threat perceptions, different
10:56
industries, and different political
10:58
priorities. Some of them want
11:00
centralized EUwide defense projects.
11:03
Others prefer coalition-based programs
11:06
run through NATO. Germany, France, and
11:08
Italy, the heavyweight economies, often
11:10
push for projects that benefit their
11:12
national defense industries, which can
11:14
create friction with smaller member
11:16
states. And all of this gets filtered
11:18
through Brussels bureaucracy, which is
11:21
notoriously slow and complex. For
11:24
Canada, that means navigating a
11:26
political minefield. A project that
11:28
looks promising today might stall
11:30
tomorrow because two EU member states
11:32
can't agree on specifications or because
11:35
a government changes after an election
11:37
and shifts priorities. Unlike dealing
11:40
with the United States where you
11:42
basically negotiate with one defense
11:44
department, Canada now has to manage
11:47
relationships with 27 different
11:49
procurement systems, 27 different
11:51
political environments, and one
11:54
overarching EU structure that doesn't
11:56
always align with what individual
11:58
countries want. Second, there's the
12:00
entry fee issue. Canada had to pay an
12:02
undisclosed amount to join SAFE. And
12:05
that fee is supposedly based on
12:06
projections about how much business
12:08
Canadian companies will actually do
12:10
under the program. If those projections
12:12
don't materialize, if Canadian firms
12:15
can't compete effectively, or if
12:17
political resistance develops in Europe
12:19
against giving contracts to non-EU
12:21
companies, Canada might have overpaid
12:23
for access that doesn't deliver. Third,
12:26
integrating into European defense
12:28
standards is expensive and timeconuming.
12:31
Canadian manufacturers will need to
12:33
adapt their products to meet different
12:35
technical requirements, different
12:37
certification processes, and different
12:40
quality standards than they're used to
12:41
in North America. That takes investment,
12:44
training, and years of relationship
12:46
building. Some companies won't make it.
12:49
Some will try, spend millions adapting
12:51
their systems, and then lose contracts
12:54
to European competitors. Anyway, fourth,
12:56
there's the risk of American
12:58
retaliation. Trump has already shown
13:00
he's willing to use tariffs as weapons
13:02
against Canada for much smaller
13:04
perceived slights. If he or future
13:06
American leaders view Canada's European
13:08
defense partnership as an act of
13:10
disloyalty or a a threat to American
13:13
defense industry profits, they could
13:15
respond with economic pressure that
13:17
outweighs whatever benefits Canada gains
13:20
from SAFE. We've already seen Trump
13:22
escalate tariffs multiple times over
13:24
relatively minor issues. Imagine what he
13:27
might do if he thinks Canada is actively
13:29
undermining American strategic
13:31
interests. What comes next? So, where
13:34
does this all go from here? The deal is
13:36
done, but official ratification and
13:38
launch of Canada's participation in SAFE
13:41
is expected in the coming weeks. That
13:43
means Canadian companies will start
13:45
bidding on European defense contracts
13:47
probably by early 2026. The European
13:50
Union has a target of being fully ready
13:53
for any military threat by 2030, which
13:56
means the next 5 years will see an
13:58
absolute explosion of defense spending
14:00
across the continent. We're talking
14:02
about over 1 trillion in total defense
14:05
investments when you add up SAFE loans
14:07
plus national budgets plus the broader
14:09
Rearm Europe plan. Canada's Defense
14:12
Investment Agency will be the
14:13
coordination hub managing all of this.
14:16
They'll review which projects Canadian
14:19
companies should target, facilitate
14:21
approvals, and ensure that Canadian
14:23
industry actually captures a meaningful
14:26
share of that trillion euro opportunity.
14:29
If they execute well, this could
14:31
transform Canada's entire industrial
14:34
base, not just defense. The technologies
14:37
developed for military applications,
14:39
advanced sensors, secure communications,
14:42
drone systems, materials science,
14:45
artificial intelligence. All of that
14:47
spills over into civilian sectors.
14:50
Countries that master defense technology
14:52
historically leverage it into broader
14:54
economic leadership. But the bigger
14:57
question is how the United States
14:58
responds. So far, there's been
15:00
relatively little public comment from
15:02
Washington about Canada joining SAFE.
15:05
possibly because the Trump
15:06
administration has been distracted by
15:08
other issues or possibly because they
15:10
don't fully understand the implications
15:12
yet. But at some point, American defense
15:15
contractors are going to realize that
15:17
Canada just gained access to a massive
15:20
market that they're shut out of. At some
15:22
point, American political leaders are
15:24
going to realize that their closest ally
15:26
just made a strategic bet on Europe over
15:29
America. When that realization hits,
15:31
things could get very uncomfortable very
15:33
quickly. There's also the question of
15:35
what this means for other countries. If
15:38
Canada can join SAFE, why not Australia?
15:41
Why not Japan? Why not South Korea? Are
15:44
we watching the beginning of a new
15:46
Western alliance structure that's no
15:49
longer centered exclusively on the
15:51
United States? Some analysts think
15:53
that's exactly what's happening, that
15:55
we're seeing middle powers around the
15:57
world hedging against American
15:59
unpredictability by building alternative
16:01
partnerships that don't depend on
16:03
Washington's approval. If that's true,
16:06
then the Canada EU defense deal isn't
16:08
just about missiles and drones. It's
16:10
about the fundamental restructuring of
16:12
global power. And we're living through
16:14
the early stages of that transformation
16:16
right now. For Canada specifically, the
16:19
biggest test will come in the next
16:20
election. Mark Carney has to call a
16:23
federal vote no later than October 2025, [meaning October 2026]
16:26
though many expect he'll do it sooner to
16:28
capitalize on the Liberal Party's recent
16:30
surge in polling. If Carney wins, the
16:33
SAFE partnership becomes locked in for
16:35
at least another four years, giving
16:37
Canadian companies time to build real
16:39
relationships and win real contracts in
16:42
Europe. If he loses and the
16:44
Conservatives take over, it's unclear
16:47
whether they'd continue the strategy or
16:49
try to repair relations with the United
16:51
States by pulling back from Europe.
16:54
Conservative leader Pierre Palev hasn't
16:56
said much publicly about SAFE, which
16:59
means we don't really know where he
17:00
stands. What we do know is that Canada
17:03
just made a bet, a huge bet on Europe's
17:07
willingness and ability to defend itself
17:09
independently of American leadership.
17:12
They're betting that the European Union
17:14
will actually follow through on its 2030
17:17
readiness targets, that SAFE financing
17:19
will flow as promised, that 27 countries
17:22
can coordinate effectively enough to
17:24
execute trillion euro procurement
17:26
programs, and that there won't be a
17:28
political backlash in Europe against
17:30
giving defense contracts to a non-EU
17:33
nation. Those are big assumptions. And
17:35
if any of them prove wrong, Canada could
17:38
end up caught between an angry United
17:40
States that views them as disloyal and a
17:43
European market that doesn't actually
17:45
deliver the opportunities they were
17:47
promised. The bottom line. But here's
17:49
what's undeniable. Canada looked at
17:52
decades of dependence on the United
17:54
States, looked at the chaos and
17:56
unpredictability of recent American
17:58
politics, looked at Europe's desperate
18:00
need for reliable defense partners, and
18:03
made a calculated decision to diversify.
18:05
They didn't announce it with dramatic
18:07
press conferences or threats. They
18:09
didn't burn bridges or issue ultimatums.
18:11
They just quietly negotiated their way
18:14
into the most exclusive defense club on
18:16
the planet. secured terms that give
18:18
their companies unprecedented access to
18:20
European markets and position themselves
18:23
as the bridge between North America and
18:25
Europe at exactly the moment when that
18:27
bridge matters most. Whether this turns
18:30
out to be brilliant strategy or
18:32
catastrophic miscalculation won't be
18:34
clear for years. What is clear right now
18:38
is that the old assumptions about
18:40
Western security, about who depends on
18:42
whom, about where the real power lies,
18:46
those assumptions just got shattered.
18:48
Canada isn't a minor player anymore.
18:50
They're not the polite neighbor that
18:52
just goes along with whatever Washington
18:54
decides. They're a strategic actor with
18:56
options, leverage, and the willingness
18:59
to use both. And in a world where
19:01
alliances are being tested, where
19:04
traditional partnerships are fracturing,
19:06
and where nobody knows what comes next,
19:08
that might be the smartest move anyone
19:10
has made.
——
MY COMMENT: The following, on December 29th, from the retired Colonel Douglas Macgregor, who is one of the best public commentators on geostrategy, adds further depth to the above analysis:
https://www.youtube.com/watch?v=2SAv699XNzg&t=1091s
All of this is bad news, and it signals I think the decay, the destruction, the disintegration of NATO and the EU, which
18:21
is: these things are now inevitable. JUDGE NAPOLITANO: Should Russia fear NATO since it's disintegrating?
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MACGREGOR: I don't think Russia needs to fear NATO except the possibility that a maniac in
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London or Paris would turn to the use of a nuclear weapon. And I say maniac because I don't think Starmer or
18:41
Mcronone are maniacs. Could a maniac come to power and do that? I think that the possibilities are remote. But the
18:47
Russians can't ignore that as a possibility. Otherwise, no. And again,
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who would you rather fight? Would you rather fight a large fight with a large force that is homogeneous? Where the
19:00
language of command is uniform across all the formations where the general
19:05
staff, the command structure are set, there is absolute unity of action at every level.
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Do you want NATO where you have units that speak different languages, that that do business differently, that are
19:18
equipped differently, that think differently, that have different levels of commitment and interest, and
19:24
governments that may not fully back whatever the Supreme Commander wants to do. And so the Supreme Commander really
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isn't the Supreme Commander. He's commanding what effectively looks like a compromised force. Which one do you
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want? Well, you don't want the compromised force. So if you're a Russian, you look at this, say, "These people aren't going to be difficult to
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defeat because there's no unity of action and there won't be."
19:50
——
That disunity would, of course, be even worse under SAFE. But Mark Carney is now so angry against Trump that Canada is taking this path.
The entire interview of Macgregor is well worth hearing and thinking about:
https://www.youtube.com/watch?v=2SAv699XNzg
“This Is HOW NATO ENDS — Col Douglas Macgregor On The Collapse Of Western Unity”
Craft Campus, Dec 29, 2025
In this revealing interview, Colonel Douglas Macgregor drops a bombshell: President Trump may not be a "free agent." Macgregor argues that financial oligarchs and figures like Jared Kushner and Steve Witkoff constitute the "real government," driving US policy in the Middle East and Ukraine.
Macgregor slams the recent Gaza peace proposals as a "scam" designed to pave the way for real estate development rather than actual peace. He also analyzes why the White House abruptly cancelled the Budapest summit with Vladimir Putin, effectively making the ongoing conflict "Trump's War." With Russia rejecting Marco Rubio's ceasefire demands and Israel moving to annex the West Bank, Macgregor warns that Western unity is collapsing and the US is drifting into perpetual confusion.
And, yet another reason why Canada and the EU are breaking away from the U.S. was reported on December 22nd by “Democracy Now,” headlining “‘Destroying Knowledge’: Michael Mann on Trump's Dismantling of Key Climate Center in Colorado”.
The imperial nation in the U.S. empire is now losing its colonies (or ‘allies’), just at the very same time when Trump demands it to gain new colonies, such as Greenland, Panama, and even Canada itself (which further antagonizes the Canadian people).
Also, what Trump is doing to Venezuela is further antagonizing the populations south of the U.S. border, against the U.S.
—————
Investigative historian Eric Zuesse’s latest book, AMERICA’S EMPIRE OF EVIL: Hitler’s Posthumous Victory, and Why the Social Sciences Need to Change, is about how America took over the world after World War II in order to enslave it to U.S.-and-allied billionaires. Their cartels extract the world’s wealth by control of not only their ‘news’ media but the social ‘sciences’ — duping the public.
