PBS News Hour - Full Show - How the U.S. and Canada fell into a feud – and how it could end

Episode Date: September 4, 2026

It's supposed to be the world's longest peaceful border, but you wouldn't know it listening to the country's leaders. What's next now that America and Canada, whose economies are intertwined, are on the verge of unwinding? Compass Points moderator Nick Schifrin discusses how we got here and where this once rock-solid alliance goes next with Shuvaloy Majumdar, Christopher Sands and Robert Zoellick. PBS News is supported by - https://www.pbs.org/newshour/about/funders. Hosted on Acast. See acast.com/privacy

On a break or a break up. It's supposed to be the world's longest peaceful border, but you wouldn't know it, listening to the country's leaders. You're at war when you get attacked. We got attacked. How are we going to be a war with Canada? They're going to take their two submarines and sick them on us? What's next now that America and Canada,

whose economies are so intertwined, are on the verge of unwinding. Coming up on Compass Points. Hello and welcome to Compass Points. Seven months ago, Canada's Prime Minister, Mark Carney, got the world's attention when he said this, about the United States. We are in the midst of a rupture, not a transition.

At least an economic version of that rupture is taking place quite publicly and it's hard to look away. Including from the president's AI memes, to which Carney says, Stop doing memes, stop throwing shade, stop trying to be tough and start being serious.

Regardless of the shade, this is a pivotal moment for two long-time allies. and the consequences of this tension will prove lasting. Joining us to explain how we got here and where this once-rock-solid alliance goes next, Shuvalloy Majumdar is a member of Canada's parliament in the opposition, Conservative Party,

and his party's U.S.-Canada Relations Minister. And here with me in the studio, Christopher Sands is the director of the Center for U.S. Canada Studies at the Johns Hopkins University School of Advanced International Studies. And Robert Zellick is a former president of the World Bank and a former U.S. trade representative during the George W. Bush administration. He also helped negotiate NAFTA in the Clinton administration. Thanks very much. All of you, welcome to Compass Points.

As I said, in January, Carney called this a rupture. And this is what he said about the United States most recently. Our government understood before many that America would transform all of its commercial relationships, that it would put a series of tariffs on its closest allies and use economic integration as a weapon. We recognize that sometimes its signature was written in pencil. Signature written in pencil.

Chris, how much of this is about trade and how much of this is about something much, much larger? I think it is about something much, much larger. Canadians have trusted us, and they trusted us because, with free... free trade agreements, we didn't use our size and our leverage to bully them. In fact, we showed from Canada's free trade forward that we could write rules and we would follow them.

Even though we had the size advantage on Canada, the economic advantage on Canada, that's how you build trust. And we had 40, 50 years of that. And now we're saying we're changing the rules, we're doing something different. And for a lot of Canadians who were skeptical about free trade, worried they were going to lose their culture, their distinctiveness, their identity. now all of a sudden they see us as being unreliable, uncertain. They're trying to figure out whether they can have a relationship with us.

Bob, is the trust broken? Is the U.S. unreliable? This administration is unreliable, and that's, I think, the bigger picture even than the North America angle, which I got one of the most interesting comments on this from a friend in Asia who said, if this is how the United States treats its family and its friends. What should the rest of us secure? expect. And so going back to Chris's point, actually the NAFTA was negotiated in the Bush 41 administration was passed in Clinton, and the Canada Agreement was in the Reagan administration.

And I was about both of those. The logic was actually by integrating the North American economy. We not only could lower prices for the three different countries, which a lot of people care about, but we'd make all three stronger globally. So the idea was that whether it's minerals, whether it's energy systems, whether it's the energy systems, whether it's the manufacturing, the supply chains, whether it's the services, that 500 million North Americans, if you're competing with 1.4 billion Chinese, would be better off that they're operating together. So the rupture is not just between the U.S. and Canada.

The question is, how does the United States want to engage globally and use the strengths with its partners? Shrove, just to make a point for viewers, as I mentioned before, you're in the conservative party, you're in the opposition, the prime minister. is the Liberal Party, way in here. From the Canadian perspective, how fundamental is this tension? Is it about trade or is it about some kind of unreliability, as Bob's saying, in the United States? Well, you know, we're the loyal opposition in Canada, so we're loyal to the Crown and loyal to the debate that Parliament can provide the country through wars and depressions and hard times. Listen, I think the Canadian public is tired of being used as a punching bag by President Trump.

And time and time again, we had a deal with QSMA 1, and now we're negotiating a new QSMA, and new tariffs are slapped onto sectors that require reliability. Two and a half million Canadians now depend on trade with the United States, which comprises 75% of our trade outlook. Hundreds of thousands of Canadian workers are extremely anxious today. Many are incapable of planning for the future. They're getting pink slips. They're getting laid off.

We're seeing this across southwestern Ontario and other parts of the country as this tariff war has ratcheted up. In that context, the country has unity and resiliency against what it perceives to be an economic attack by the United States administration. And internally, it is grappling with the big decisions around how it can best navigate it. And you can imagine that it's a diverse country with a lot of different perspectives, but there is a consensus that the country is tired of being bullied by the United States. I think in a bigger picture, it's a luxury that Canada has had with the United States

for the balance of the last half century. We've been in a great neighborhood and a good relationship. And now the country needs to begin to assess what other countries around the world need to, which is being in a tougher neighborhood and being able to look after its interests a lot more rigorously. Cosma, I should say, for our non-Canadian viewers, is the USMCA, as is called, in the United States. Which is what Trump renegotiated from NAFTA in the first term. So he's violating his own agreement. Right. He doesn't seem to care about what he's agreed to in the past. He wants, in fact, a new trade agreement. But Shoev, go back to that anti-Americanism, if you will, the kind of being fed up with, you know, being the punching bag.

How fundamental is that from Canadians? Is this a temporary notion of being. anti-Trump or anti-his tactics, or is this becoming anti-Americanism? It's a great question, and I think it's what Chris had mentioned as something deeper, is being unlocked in the country. For the last four decades or so, much of Canadian identity has been taught in schools and across the academy to be, quote, not American, quote. And that distinction at first sounds polite, but it can open the door to something more insiduous and something that, I think, undermines our national history.

and our contribution to Western civilization, let alone the last one and a half centuries of the greatest contributions to human history. You know, Canada is a country that is both heir to the Magna Carta and the French Declaration of the Rights of Man. We are a compact between newcomers and First Nations that have endured wars and depressions and hard times together.

We are a federation and a constitutional monarchy that the people themselves write. Now, a lot of what I'm described, here has, I think, been diluted in the last four decades or so and woven into what can be easily unleashed as an anti-American, a non-American identity. But when you don't know who you are and which you are, you know, really setting yourself up to fight four, then it's easy to get confused by politicians that seek to do demagoguery at the expense of our actual national interests. This antipathy, I guess, if you will, that we've seen out of Canada toward the president,

certainly towards Americans, has cut across cultural lines, it's cut across Canadian society, really ever since the president started to suggest Canada was the 51st state. It was December, 24, posted that on truth, saying, I think it's a great idea, 51st state. Today, we see Canadians traveling less, the United States. We see talk of renaming Trump Avenue in Ontario to Taco Avenue, as in Trump always chickens out. And there has been a widespread popular boycott of American liquor. You see American liquor coming off the shelves.

Chris, how much of this is about the 51st state getting under the Canadian skin and how much of it is successive steps and rhetoric by the United States government? Well, I'm going to introduce a third element. So, yes, you're right. It starts with insulting comments from the president about Canada's nationhood. It then goes to the trade issues, which give it sort of a form. The president said he wasn't going to invade Canada, but he was going to use economic force to bring Canada into the United States.

And just as recently as our trade talks had broken down, he said, well, Canada feels entitled. They want all the benefits of being a state without actually being a state. Those comments resonate. We still remember the kind of things that John F. Kennedy said about the Kennedy-U.S. Relationship Board that other leaders have. What did Kennedy say? Well, Kennedy said history, history made us partners. Economics makes us partners.

Geography makes us neighbors. And again, history makes us friends. I mean, it was a really important line. As we think about those things, I think Trump's comments will resonate with us for quite a long time. But let me add one other thing. You're right. Canadians are not crossing the border. They're boycotting our products.

A lot of people aren't taking vacations or coming to see sporting events in the United States. But it ends up being a little bit like giving the U.S. the silent treatment because they're so angry. And there's nothing worse, at least in my relationships, there's nothing worse than having somebody give you the silent treatment and you don't notice because it just gets the matter. Now, most Americans are vaguely aware that Canadians are upset,

and they know about Trump. But I really wish more Americans would say to their Canadian friends and say publicly, we disagree with this. We might think it's a joke, but I think one of the reasons this is so damaging is that Canadians are in a nationalist mood and they're feeling insulted, and their American friends and relatives are brushing it off.

And that's not the response Canadians want. Bob, let's talk about the kind of geopolitical implications of this, because this isn't just only about Americans, Canadians, U.S. government, Canada's government. Prime Minister Carney has looked around the world and said, I'm going to diversify. I'm going to hedge a little bit. most notably on trade. So earlier this year he went to Beijing to visit Xi Jinping,

and Canada and China have announced a preliminary trade agreement. Carney signed deals with Indonesia, Ecuador, the UAE, is negotiating with India, has a possible deal with the European Union over defense procurement. I mean, is this hedging? How important is Carney looking around the world for other partners? Geography is reality. And so Canada, and for that matter, Mexico, are not going to be able to escape sort of the magnetic power of the United States.

But if you're the more powerful country, why do you have to bully and insult people? You've got the power. You use the magnetism as opposed to trying to use the club to have some influence on people. And so, Shoev mentioned this, is that these agreements that we negotiated over time have a set of rules.

Okay, and now and then there'll be frictions. People get into different disputes. But what prompted some of this was that when the Trump administration used the authority for national security, you see, Canada's a national security threat. The same authority they've now used against almost all countries because they lost the Supreme Court case. That's one of the authorities. But in particular, gee, we fought with the Canadians in World War I, World War II, Korean War. They fought and died with us in Afghanistan. at 9-11, they helped take care of some of our people. They help, here we're in another conflict with Iran. In the first one, the Canadians helped get people out.

That's a national security threat. So this goes to the point that Chris mentioned. This just doesn't resonate to the Canadians. And as he mentioned, most Americans look at the 51st stage and they just think it's a humorous job. Unfortunately, the way that this plays out in Canada, it's an insult to their independence, and even because, as Shoe was kind of talking about, you have a confederation.

You've got French-speaking parts. You've got the energy in Alberta. You've got the auto industry in Ontario. Canadians have to keep the confederation together, and Trump partly suggests he's trying to wedge and split them apart. So the point here is not only kind of the insult to the Canadians, but it's also what does it say about the United States

that our best friends we can ignore? So when it comes time to basing in Asia or other relationships in Europe, what conclusions do people draw? The United States is a very powerful country and the military, AI, our economy, but we're not alone in the world. We have to figure out how to work with others. And that was the strength of the United States for 80 years until some people came in and figured out that you can insult your neighbor and somehow come off better. Shov, part of the prime minister's call has not only been to diversify or hedge, but also somehow gather with middle powers. And in fact, he was one of the only ones

to actually push back on the United States. As the White House has pointed out multiple times, only Beijing and Canada actually imposed countermeasures against the United States. Carney's called for middle powers to unite, but it hasn't happened. And even efforts, for example, to tie Europe to Canada to Asian trade

haven't really worked. Is Canada isolated in this sense, despite what Carney wants, which is middle powers resisting the United States? Well, to Bob's point, our geography defines our national and our economic security. And the press of history and destiny is woven into this with the United States. And I think what the prime minister has been trying to do, and I'm not going to speak for him, but I will say he has laid bare that he has a thesis for Canada as a middle power manager as a means to try and organize an alternative to the United States dollar by proposing synthetic currencies to the European Union.

He has tilted toward Beijing decisively, including a security arrangement that has not been disclosed to the Canadian public. He has installed at the chairmanship of investment mechanism to Canada, the former Canadian ambassador to Beijing under Justin Trudeau, Dominic Barton, McKinsey, chairman, who obviously turned that company into a quote, success story with the consulting they had done across China for many years. I think the prime minister's thesis is that the alternative to the United States are these markets in those areas. We haven't seen much beyond memorandums of understanding and some notional agreements as to directionality.

But when brass tacks come off, we find that European nations particularly choose the United States. Europe chose a trade arrangement with the United States. The United Kingdom chose a trade arrangement with the United States. the United Kingdom chose a security arrangement with the United States. There is a rejigging of telecommunications and satellite architecture, but for our own continental security, for the Arctic that Canada's sovereign responsibility is, it will have to be a North American integrated defense relationship using technologies that are interoperable

and militaries that are aligned and capable of speaking with each other in the contest ahead. So I think, you know, one of the things that, I think the Prime Minister might be underestimating is the source of the disruption that he had described at Davos. I'd say that it's just that much of the disruption preceded the Trump administration with the emergence of Xi Jinping in Beijing, who weaponized commerce and started threatening supply chains, energy, investment, and technology. It became more pronounced during the pandemic in a full-out rivalry in the period since. and whether it's been Republican or Democrat administrations, Canadians notice that there is a consensus in the United States

and how to deal with that. I don't think it makes a lot of sense for Ottawa to intentionally put itself in the crosshairs between Beijing and Washington when our alignment needs to be with the Western market democratic model rather than the state-backed one that China is using to dominate various sectors and various societies. Nick, one thing about this is that what we're describing now is kind of a lose-lose situation.

So it's not, is Canada going to be hurt more or the U.S. is going to be hurt more. Ronald Reagan, when he launched his presidential campaign back in 1979, said we'd be better off if Canada and Mexico were stronger rather than weaker, and it's time that we stop looking at our nearest neighbors as foreigners. Okay, that was a strategic view, okay? And so what you have going on now is a disruption of the exact opposite type. And so, you know, you see the trade debate about, well, will Canada be hurt more? Yes, in some ways because it's more dependent on the U.S. economy.

The U.S. will be hurt more internationally because we look like a bunch of clowns in dealing with this. But the bigger question is kind of not kind of who can be hurt more. It's the question of how we should try to figure out how North America can compete with others. When Canada grows, they buy more from the United States, much more than China does. When Mexico grows, they buy more from the United States. If you take the auto industry, the cars and the parts. parts cross the borders about seven or eight different times. You've got production of, frankly, the GM and Ford operations in Canada dating back to 1965. Well, why is that? It's because Canada isn't

big enough to have its own auto industry. But on the other hand, if the U.S. doesn't engage them in terms of a shared auto industry, well, then fine, they'll just buy Chinese cars. So it's a classic notion where we got an administration that looks at everything in zero-sum power terms and even sort of childish statements as opposed to how you make a win-win venture. Let me give the president a chance to defend himself for one second. Just to reiterate that, though, Chris, you made this argument to one of my colleagues. This is not a trade war. This is a trade civil war in terms of how integrated these economies are. But let me listen. Let's listen to the president speaking this week who argued that the U.S.

loses $60 to $100 billion because of trade with Canada. They take advantage of our farmers. they take advantage of our tourists, they take advantage of airlines. They have ripped us off for years, and now we're turning the tables, very easily turning the tables. Ripped us off for years. This is what the president says, Chris? Completely wrong. I mean, one of the reasons that we have an auto industry that's integrated was that early on in the beginning of the 20th century, the British Empire was our big rival market. And by building in Canada, our automakers were able to sell in Britain, in India, all over the world.

But then when it came to World War I and World War II, those plants supplied the Allies with weapons before we even entered the war. And in the post-war, when Europe was decimated, Canadians, Americans were trying to figure out how to help the world rebound, we negotiated an auto pact so that we could bring some of that production to the United States where it was needed. We have always worked carefully together, and the economics and the security have been closely intertwined. And that's how we have evolved. Canada had specializations we didn't have, access to markets we didn't have, and natural resources, tremendous minerals. And now we're talking about critical minerals being so important and China's stranglehold on processing of critical minerals, it's going to take a lot of money and it's going to take a lot of access to minerals for us to be able to compete. There's a more basic clap trap here you have to address, which is that when the Trump administration talks about trade,

they only talk about goods. They don't talk about goods and services. This show would be, an example of services. About 30% of trade is services. So you have about $900 billion of trade, okay, that both sides benefit. The United States invests about $750 billion in Canada. Canada invests about $500 billion in the United States. So where exactly is the loss here? How have we been taken advantage of? I'll tell you where people will learn they're being taken advantage. When their prices go up and you're going to see this in the midterm elections and politics, they don't like it. They didn't like another Biden and they're not going to like another. under Trump. Shrv, we don't have that much time left, so relatively briefly. Keep your brilliance

brief, as my father would say. Is there an off-ramp here? Cooler heads should prevail. I think that there is a, there is no way that there won't be a continuing of the negotiation. What matters is the terms in which those negotiations are done. Maybe it's necessary to have new voices around the table to reset it. We know that we're entering a political environment in the United States and obviously the impact on Canadian workers are high. We've got a political environment in Canada as well. And so I think that over time there will be a conversation to be had. And I hope that happens sooner rather than later because it's important resourceability and move along. I think this is very distracting to both our economies and very distracting to the

kinds of things we need to make for the big security decisions we need for both of our countries. Chris, I'll give you the last word in the last minute. You teach Canadian diplomats at Canada, School of Public Service, a class called How Washington Works. In the last minute, we have, what do you tell them about how Washington works today? Well, one thing I try to tell them is that it's not just the presidency. And, of course, we all in America, we do tend to focus on President Trump. He's very good at getting our agenda. But what I try to remind them is that there are members of Congress who are paying attention

to these issues, who have a variety of views, not all agreeing with the president. there are civil servants who have genuine compassion for Canada and we've developed that expertise. I think if we think of America as only Donald Trump right now, we can't see a future. But if you realize that ordinary Americans, and Americans in positions of power, still retain a respect for Canada

and an appreciation for Canada, that's where I can be hopeful. Maybe I'm foolishly hopeful. The people, presumably. The people, that we can get this back. There's more to this country than the president. He makes a big difference right now. now, but we have to focus on the long term and we have to focus on that friendship.

Chris Sands, Bob Zellick, Shuv Mahjumdar, thank you so much to all of you guys for being here. And thank you for joining us at home. I'm Nick Schiffen. We'll see you here again next week on Compass Points.