Trump's World Order

January 9, 2025

On January 7, President-elect Donald Trump launched his geo-economic war to make the world safer and bolster America’s living standards. He said NATO’s 32 members should spend 5% of GDP on defense, not just 2%; he has threatened tariffs everywhere and even suggested that Canada, Greenland, and the Panama Canal should be annexed for security reasons. The reality is that these and other regions have been happy to allow America to be their policeman for decades, but America now bears nearly 40% of all the world’s military costs to guard wealthy regions like Europe, Canada, Israel, oil-rich Arab nations, Japan, and South Korea. America has also racked up unsustainable trade deficits with countries, hovering around $1 trillion annually. Naturally, Trump wants to reduce these burdens but goes too far. When asked by a reporter whether he would use military force to annex Canada, for instance, Trump quickly responded: “No. Economic force”. Presumably, this meant tariffs, invoices to cover American military protection, and demands to reduce U.S. tariff deficits by importing more American goods and services. His New World Order amounts to, in other words, a series of shakedowns, not invasions. And, he claims, this is justified because “I’m talking about protecting the free world.”

But his reasoning fools no one, and forced acquisitions abrogate international law. Canadians, Panamanians, Greenlanders, and European Union citizens haven’t appreciated his menacing remarks. Fox News Trumpies contrasted his annexation notions to nation-building transactions such as the Louisiana Purchase from France or the acquisition of Alaska from Russia. However, the difference is that these regions were for sale, while Canada, Greenland, and the Panama Canal are not for sale. 

Trump’s hectoring has successfully pushed NATO members to meet their 2% commitments. But now, he wants a 5% target, more than any NATO member currently spends. The U.S. spent 3.4% of its GDP last year; the closest is Poland, which spent 4.7%. Further, he threatens European Union members with 20% tariffs on their exports into the U.S. to lower America’s trade deficit. This has caused panic in some quarters, but Christine Lagarde, former finance minister of France and now head of the European Central Bank, sees Trump’s “demands” as business horse-trading. “Europe should not retaliate but negotiate and adopt a `cheque-book strategy’ to reduce American trade deficits with Europe by purchasing liquefied natural gas and defense equipment from the United States,” she said.

But the gambit in Greenland is head-scratching. The gigantic island is part of North America but tied to Denmark and the European Union. There is an American military base there, but little else. The country, with a population of 56,000, mainly fish and enjoy a nice lifestyle. It has untapped critical minerals but hardly a treasure trove. However, Trump wants to control the place and believes he can pressure or throw money at its citizens by promising higher incomes, mining development, and more military bases. He said he’s concerned about the Chinese and Russian ships that ply Greenland’s waters, but that’s hardly relevant or justification for gobbling up the place.

The same confusion applies to the Panama Canal issue. It is critical infrastructure, as are several potential “chokepoints” worldwide, which are patrolled and monitored by America and others because they are key to international trade flows. Trump is rightly concerned that Chinese interests now manage the operation, but simply seizing the entire Canal back after it was gifted to the country of Panama by the late President Jimmy Carter is illegal and, at this point, unjustifiable.

His Canadian ambition is another matter. In 2013, I wrote “Merger of the Century which pointed out that the two countries had been socio-economically merging and a full-blown merger was inevitable unless Canada developed its Arctic and northern resources and weaned itself from dependence on American military protection. It did not. In November, security lapses along the US-Canada border upset Donald Trump, who threatened 25% tariffs against Canada (and Mexico) unless border controls were in place. Canada’s Prime Minister Justin Trudeau immediately flew to Mar-A-Lago and whined about the hardship tariffs would cause Canadians, to which Trump snapped back, saying that perhaps it should become the “51st state.” Trudeau should have proposed concrete solutions to all these irritants and dangers but did not. In a newsletter, I outed Trump’s “51st state” idea as hare-brained, given that Canada is geographically more extensive, has more resource wealth, and that Canadians are uninterested in joining America with its awful healthcare and gun law madness.

But Trump always doubles down and now claims that America’s free military protection for Canada and its trade deficit amounts to a “subsidy” of at least $100 billion annually. He’s kept up the pressure, and on January 6, Canada’s unpopular Prime Minister Justin Trudeau resigned. Then, on January 7, Trump hinted at his press conference that he would exert “economic force” to bring about a union with Canada. Elon Musk, another bully, waded in with a childish retweet of Trudeau’s assertion that Canada would never become part of the United States.

The world watches as Canadians, like Greenlanders and Europeans, are abused, angered, and mortified by events. Trump believes foreign policy is no different than business or real estate wheeling and dealing in New York City. However, as business guru Peter Drucker observed: “Culture trumps strategy.” Trump cannot buy and sell countries like distressed properties in Queens. Last week, a citizen of Greenland told The New York Times: “There is this enormous pride you get from being one of just 56,000. Greenland is amazing. It’s beautiful, the most wonderful country in the world. And it is a country fighting for independence. Not a piece of property you can buy.”