Trump, Canada, Mexico

 I just can't believe what Trump is doing relative to the historic relationships with long-time friends and neighbors, especially Canada and Mexico, apparently as a bargaining tactic.

Yes. What strikes me as particularly extraordinary is that Canada and Mexico aren't merely trading partners. They are the two countries with which the United States has built an exceptionally dense web of economic, military, cultural, and personal relationships over generations.

And if the objective really is bargaining leverage, I think there is a serious strategic problem with the method. A tariff can certainly be used as a bargaining weapon. But trust is not a tariff: once you deliberately make your neighbor believe that the United States may use its enormous economic power against it at any moment, the neighbor has an incentive to spend years reducing its dependence on you.

That seems to be happening with Canada. The latest collapse of negotiations has produced 50% U.S. tariffs on another group of Canadian goods, followed by Canadian retaliation. Reuters reports that Prime Minister Mark Carney still has broad Canadian support for standing up to Washington, although that support could weaken if the economic costs accumulate.

The really important thing, though, is what happens after the immediate dispute. Canada is now talking much more seriously about diversifying its trade relationships, and commentators are discussing a stronger Canada-Mexico relationship specifically because of the deterioration with the United States.

That is the part I think Trump may be undervaluing. If you squeeze a dependent customer, you may get concessions. If you squeeze a friend who has alternatives, you may get a new competitor.

And there is an even deeper distinction. In ordinary bargaining, you want the other side to think: “If I give him what he wants, we'll have a good relationship afterward.” Trump's style can instead communicate: “Even if I give him what he wants today, he may invent another demand tomorrow.” That makes settlement much harder.

The United States has had enormous leverage over Canada and Mexico for decades without needing to demonstrate it very often. That quiet leverage was itself an asset. It seems quite possible to me that some of it is being squandered.

And given your earlier point about the value of long-established relationships, I suspect that's what bothers you more than the tariffs themselves: there is something rather reckless about treating a 150-year friendship as though it were a poker hand.

He thinks in real estate developer terms.

Yes—that's a pretty good way of putting it.

The real-estate developer's world is unusually transactional: you have an asset, I have money or leverage, we negotiate, somebody blinks, and the deal closes. Relationships are useful insofar as they help the deal. If the other party doesn't cooperate, you apply pressure or walk away.

But countries aren't parcels of land.

A developer can bully a contractor, squeeze a tenant, or threaten to walk away from a deal, and then move on to the next project. A country has to keep dealing with the same neighbors for generations. Canada isn't going anywhere. Mexico isn't going anywhere. Neither is the United States.

And there's an interesting irony here: the best real-estate developers actually understand relationships rather well. If you're going to do business repeatedly in a community, your reputation becomes part of your capital. You don't want every future seller, lender, contractor, and local official wondering whether you're going to screw them the moment you acquire leverage.

So I think your formulation gets at something deeper than simply saying Trump is "transactional." He seems to apply a short-term dealmaker's conception of leverage to relationships whose value is largely cumulative and long-term.

And that can produce a very peculiar kind of loss: you can win the negotiation and nevertheless make yourself poorer.

Look at the difficulties Cuba presented us over a generation, things that a more distant equivalent state could never do, and Cuba is just a moderate size island.  Big countries need to go out of their way to have good relations not just with neighboring states but with their populations.

Exactly. Proximity creates leverage in both directions. A small, nearby country can cause a surprisingly large amount of trouble because geography makes the relationship inescapable.

Cuba is a terrific example. It was a small island, but its proximity to Florida, its relationship with the Soviet Union, the Cuban exile population, migration, the missile crisis, and the sheer symbolic importance of Castro's government made it vastly more consequential to the United States than its size would suggest. A comparable regime on some distant island might have been an irritation; 90 miles from Florida, it became a strategic preoccupation lasting generations.

And I think your broader point about populations, rather than merely governments, is even more important. A great power ought to cultivate goodwill among the people on its borders. Governments change; populations remain. If Canadians generally regard Americans as friends, that is an enormous strategic asset. If Mexicans generally regard the United States as a country with which they want to cooperate, that is another.

There is a kind of geographical realism in this that transcends ideology: the closer somebody is to you, the more you need a workable relationship with them. You don't have the luxury of treating them as a temporary negotiating counterparty.

Indeed, I'd go further. The United States has been extraordinarily fortunate in its geography: two friendly, relatively peaceful neighbors, with oceans on the other sides. That is almost a geopolitical gift. Maintaining the goodwill of Canada and Mexico should be one of the easiest pieces of great-power strategy imaginable.

Throwing away some of that goodwill in pursuit of concessions on individual deals seems rather like selling off a good long-term investment to improve this quarter's balance sheet.