The Munk Debates Podcast - Munk Dialogue with Andrew Coyne: Carney considers concessions to Trump as U.S. power wanes abroad

Episode Date: August 7, 2026

What is the point of negotiating with Donald Trump when experience suggests that agreements may not be binding, concessions may not be reciprocal, and terms may not be honoured? Reports now suggest the Canadian government is preparing to make significant concessions, including allowing more American dairy into the Canadian market. But in this climate, and with this president, any Canadian concession should come with a concession of equal value from Washington. So what exactly is Ottawa’s strategy? Are its conflicting signals a deliberate effort at strategic ambiguity—or evidence that the government itself is divided? And how might Trump’s negotiating posture change if Republicans lose the U.S. midterms in November and he becomes a lame-duck president?In the second half of the show, Rudyard and Andrew turn to the emerging Oman-Iran agreement over control of the Strait of Hormuz, asking whether it signals a retreat from freedom of navigation and another step in the decline of American power abroad. They argue that Trump fundamentally misunderstood the Iranian regime he was confronting and the retaliatory tools at its disposal. The result, they contend, is more than a strategic defeat: it is a humiliation for the United States.Become a Munk Donor ($50 annually) to get 72-hour advanced access to the full length editions of Friday Focus and Munk Dialogues. Go to www.munkdebates.com to sign up. Hosted on Acast. See acast.com/privacy for more information.

What is the point of making concessions? What is the point of signing a deal with this president? When every experience tells us nothing of it will be binding, he will not live up to the terms on his side. He will not make any serious concessions to begin with, but he will graciously accept our concessions and then turn around and hit us again anyway. Welcome to the regular Friday Monk Dialogue.

this summer featuring Globe and Mail journalist Andrew Coyne. Andrew, great to be in conversation with you. To be with you. Got to talk. Trade off the top of today's show, Andrew. We're hurdling towards this August 19 deadline. The prime minister is flagging that he wants a more comprehensive deal with the Trump administration. Yet all the signs out of the United States seems to be a desire to delay, to push any kind of comprehensive deal, if one is possible, out until 2020. What's your take of the mix as we hurdle through the dog days of the summer to this consequential date? Well, it's odd how the positions have turned around. It used to be the Americans were expressing frustration because we were dragging our heels.

And we were trying to play for time, you know, just to watch Trump grow weaker to wait until after the midterms or what have you. Why this sudden turnaround where now we want to get a deal by August the 19th, I mean, I understand the exact point about the tariffs. But the overarching question, you know, surrounding all of these talks is, what is the point of a deal with Donald Trump? This is a lesson that every country has been learning to its cost. One of the things that had distinguished the Canadian approach until now is that we didn't rush into a deal. We've watched other countries that did and got nothing forward.

They signed a deal on extortionary terms. and then even those extortionary terms were ignored. So the Europeans, for example, made all kinds of concessions in return for a tariff of merely 25%, only to see Trump impose new tariffs on them after that, after the deal had been struck. So I know it's an obvious point, but it's nevertheless a compelling and point that has not gone away

is what is the point of making concessions? What is the point of signing a deal with this president? when every experience tells us nothing of it will be binding. He will not live up to the terms on his side. He will not make any serious concessions to begin with, but he will graciously accept our concessions and then turn around and hit us again anyway. So on top of which, we're now seeing reports

that the Canadian government, which had previously been vowing elbows up, no concessions, et cetera, is prepared to make quite a string of concessions. Now, I have to be carefully. Some of these concessions are things I would be glad to see us get rid of. If they make any concession, for example, on giving more room for American milk in the Canadian market, that would be good for Canadian consumers, good for Canada. But in this climate and with this president, if you're going to make any concessions at all,

you should be getting at least the pretence of some kind of concession on the other side. But for me, it would just be a matter of just keeping the talks rolling, keeping the talks going rather than anything else for the reasons I've been saying. But on top of everything else, to be making a bunch of concessions preemptively to a leader who will not reciprocate other than to slow down perhaps the pace of his tariff attacks on us just seems to me to be hard to understand, hard to understand the logic. So, Andrew, let's go there. I mean, what do you think happened?

Because the tenor the tone out of the PMO and the prime minister certainly changed with this threat of these new, quote, 50% tariffs, which are really only, in fact, a two to three percent change in our effective tariff rate because so much is sheltered by the North American Free Trade Agreement. It's still potentially $20 billion worth of export, so I don't want to discount it. But it isn't Andrew exactly as if the proverbial sky will fall on the 19th. So is part of this political? As part of it, the prime minister and his government wanting to show Canadians war action or activity on the file? Or do you think there's something substantive and real here? Because I think your point is bang on.

I mean, where is our leverage at this moment? But the midterms are still months ahead. Why wouldn't you wait at least until after the midterms when potentially this president will be at the weakest in this, his second term? Well, I've been trying to rack my brains about this. And, you know, anytime you see a story where something is revealed from the inside, the first question is, why does somebody want this to be revealed? So the fact that there's this story now on the globe about how we're about to make all these concessions,

you start to wonder. And so this may veer into the realm of conspiracy theory, but could one reason be unique that you're going to make concessions so as to firm up Canadian public opinion against the concessions? Maybe you want to show the Americans. I actually don't have a lot of room to negotiate here. If you're asking for these concessions, look at the reaction I'm getting from my Canadian public. I can't necessarily do that. So that's one possibility. Second possibility is you're setting up the talks to fail, but you want to look.

like you're the ones who were prepared to go the extra mile. You were being reasonable. You were making concessions. And it was only because of the intransigence and, you know, irrationality to the other side that you weren't able to come to a deal. So there may be an effort there. Maybe it's designed to try to shape public opinion in the United States in the run-up to this, to these midterms. You know, the MAGA people in Trump in particular are going to great lengths to try to to present Canada and Canadians of all people as the bad guys. So you saw this eruption from Trump about how nasty we are, which I think a lot of Canadians.

I think it was nasty five times in a row, Andrew, nasty, nasty, nasty. I don't, as I say, I think in their current mood, a lot of Canadians wouldn't mind being thought of as nasty by Donald Trump. So that's not going to work with most Americans, but it may with the MAGA troops themselves, and there may be some benefit to at least presenting yourself as being prepared to make deals, prepared to make concessions.

I don't know. This is all speculation. If it's just, you know, on the surface, we're prepared to make these concessions because we're so desperate to get a deal, then I come back to my first point. I just don't see what the percentage there is because the deal that you get will not turn out to be a deal. The other message, though, Andrew, we seem to be getting from the prime minister is that retaliation is not off the table.

If these tariffs go forward, then potentially, in fact, we're not making concessions. We're now in a retaliatory posture. I'm just getting a bit of whiplash here between what seems to be a different set of messages. And as you say, maybe some of these are for the administration, others are for the Canadian public. I don't know. Can you help parse this? Yeah. Well, I mean, even a labor negotiation, even a relatively simple labor negotiation with management and labor, if it's at all customer facing, is a very political thing. There's a lot of attempt to try to work the refs, if you will, to try to massage public

opinion to see it your way, particularly if it's anywhere near politics. So even that, you always have to look at about four different ways to interpret what people are saying and doing. Now add the complexity of not just Canada-U-S relations, but internal Canadian politics, federal provincial dynamics. For example, the issue of should we be prepared to use energy as a bargaining chip in these talks? Well, if you just looked at it in pure logical terms, you might say, yeah, the United States needs our energy. This is something we could actually inflict some pain on them if we're prepared to do it. It would inflict some pain here. here as well, but it might be worth it. But if you look at it through the lens of Alberta's got

a referendum coming up, Quebec's got a referendum coming up, maybe certainly an election coming up, you're trying to prevent energy and the environment from blowing up into some massive inter-provincial or federal provincial fight. So that adds a layer of complexity to it. Dealing with Donald Trump in the run up to a midterm. There's so many variables there where you're, again, you're trying to keep one eye or perhaps both eyes on public opinion in two countries. I think anybody who was the prime minister at this point

would be issuing multiple conflicting messages, partly just to keep people off their front foot, to make, keep people guessing, to keep people from being able to too easily pigeonhole your position is one thing or the other. I think there's a role there's a role there for strategic confusion. And so I'm being charitable here, but that may be one interpretation as to what they're up to. The other is, of course, is they're just making up as they go along. They're panicking from one issue to the next. And so one day

they're very strong and the next day they're very weak. That's also, you know, a possible explanation. And it's always possible that all these explanations could coexist because you're dealing with fallible human beings who are trying to be strategic, but who are nevertheless running up against political pressures and political roadblocks that they didn't expect, and then they don't necessarily react in the most rational way. So that's a complicated answer, but I think it's a complicated situation. Just before we go behind the proverbial paywall with monk donors, let's wrap up this section on the latest in the Canada, U.S. trade disputes.

Could there be another way to think of this, Andrew, which is because the war in Iran has gone so badly for this president, we're going to get into that in depth exclusively with mock donors in the back half of today's show. Could this president, in fact, be quite desperate for a win, a political win before the midterms? Could we in a sense, maybe what we're hearing for the prime minister is maybe there is a grander bargain on. the table. Maybe it's not coming from us, Andrew. Maybe it's coming from the Americans. Maybe this is what's happening. And as you've said, the prime minister is now trying to prepare the ground that there will be some concessions made. But this president, in fact, is the most vulnerable before the midterms counterintuitively versus after where he just may not give a proverbial you know what if he's reduced to lame duck status. Yeah, I mean that that has a certain

logic to it, particularly with a normal president. So a normal president making normal calculations would be desperate for a win before the midterms. There's so many ways in which Donald Trump is not normal. And one of them is he doesn't seem to give the proverbial F about the midterms even in the advance of them. So there's all kinds of things that a normal president would be who was at 30 something percent in the polls would be doing right now to try to rescue what his party from what looks like an absolute debacle in the election to come. And he's not doing any of them. In fact, he's making things worse for them by the week. He does things that just simply don't make any sense in electoral terms. For example, talking about how the elections rigged.

Could there be a better way to calculate it to keep your faithful from turning up with the polls? So that's the first point. The second point is, again, what's the enforcement mechanism? You get this great deal because he's so desperate to strike a deal before the midterms. How do you know you will ever actually live up to it? This is just anything you're doing with Trump is confounded by these just basic norm-breaking, you know, psychologically inexplicable behavior. And so the temptation always to fall back into rational analysis

of cause and effect, cost and benefits, if I do this, he'll do that, is difficult to the point of nonsensical. So there's a certain logic in what you say, but it's not a logical situation. Yeah, fair enough. Well, talking about norm breaking, Andrew, we're going to get you to stick around

to spend some time exclusively with our monk donors to talk about what seems to be, unfortunately, a norm-breaking agreement shaping up between Iran and Oman on the future management of the Straits of Promos with the United States and Donald Trump currently on the sidelines. We're going to break that all down with Andrew. After this short break, exclusively for monk donors,

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