What We’re Watching: Davos speeches show strain US-Canada relationship, EU Mercosur deal delayed again, Friendly fire in Ethiopia

Canada, US relations get frosty in Davos

Did Canadian Prime Minister Mark Carney deal a major blow to his country’s relationship with the US? During his speech at Davos yesterday, Carney underscored how deeply the US-Canada relationship is fraying. Without naming President Donald Trump, he framed US behavior as part of a broader rupture in the rules-based order (welcome to the G-Zero World, to reference our founder Ian Bremmer). Trump responded during his speech today, chastising Carney and calling Canada “ungrateful.” The public breakup with America’s closest ally comes as once-frigid relations between Canada and China thaw. During a landmark visit to Beijing last week, Carney and Chinese President Xi Jinpingagreed to reduce tariffs on some Chinese electric vehicles and Canadian canola products. One thing to watch: As tensions rise between the US and Europe over Greenland, could we see Europe follow Canada’s lead?

In bid to halt insurgents, Ethiopian military commits friendly fire

The Tigray war in Ethiopia ended in 2022, but the East African nation of nearly 112 million people has faced another issue since then: multiple insurgencies in the Amhara and Oromia regions. In a bid to stamp out one of these groups, the Fano, the military launched drone strikes in the Waghemira area last Thursday, but they reportedly ended up hitting and killing 40 fighters on their own side. The Fano had fought alongside government soldiers during the Tigray war, but that alliance faded once the war came to a close. Exacerbating the situation is a long-running border dispute between Ethiopia and Sudan over the Al-Fashaga district, which sits across from Amhara.

EU-Mercosur deal blocked

After 26 years in the works, what’s one last hurdle to the European Union’s largest ever trade deal?The recently approved pact between the Union and Mercosur, a South American trade bloc anchored by Brazil and Argentina, is now headed to the European Court of Justice for a ruling on its legality. The deal, which would integrate markets that are home to nearly 700 million people, was narrowly approved by the EU’s parliament this month, after strong objections from European farmers, particularly in France, who worry about stiff competition from South American producers. The court ruling could take months. In the meantime, lawmakers have voted to hold up the deal.