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While Biden leans in for moderates, Trudeau plays his greatest progressive hits
Comedian Bill Maher sees Canada as a cautionary tale for the United States, or perhaps more particularly for President Joe Biden.
“Yes, you can move too far left. When you do, you end up pushing the people in the middle to the right,” he said on a recent edition of his HBO show, “Real Time.”
Maher’s central contention was that the US doesn’t have much to learn from Canada on immigration, the economy, or “extreme wokeness.”
Biden most likely agrees.
Maher’s point speaks to an emerging divergence between the president and Prime Minister Justin Trudeau, driven by their respective electoral imperatives.
Winning strategies?
The US presidential race is a coin toss, according to recent polls. To win, Biden needs to woo the one-third of American voters who consider themselves “moderates,” especially whites without college degrees, even at the risk of upsetting part of his progressive base. In 2020, he traded on his blue-collar roots and ran on a moderate message. That appears to be the game plan for 2024.
Trudeau, on the other hand, has decided to double down on his appeal to young, left-of-center voters, who first helped elect him in 2015 but who have since deserted him in favor of his Conservative rival. Pierre Poilievre now holds a 2:1 advantage with people born since 1980, according to a recent poll.
“Both candidates (Biden and Donald Trump) have their separate problems getting moderates to show up while playing to their base,” according to Jon Lieber, Eurasia’s head of research. “Biden has progressive Democrats who think he has not done enough on the climate, or student loans, or has done too much on Israel. It's not clear that it's a one-sided strategy,” he said.
Biden has just forgiven student loans and increased the top rate of income tax.
But he has also backed a $26 billion aid package to Israel, at the same time as Canada has halted arms shipments to Jerusalem.
On the border, Biden has shown a willingness to get tough. “Let’s shut down the border right now and fix it quickly,” he said before House Republicans nixed a bipartisan deal.
In Canada, Trudeau’s government presided over a 1.3 million increase in the country’s population last year, as temporary workers and international students flooded the country and contributed toward sharply raising shelter costs. (As Maher noted, the median cost of a home in the US is $346,000; in Canada, it is $487,000).
Defender of liberals
The Canadian prime minister was always much more of a kindred spirit with Biden’s Democratic predecessor, Barack Obama. Trudeau was invited for a state visit to Washington in spring 2016, when Obama all but passed him the baton as defender of the liberal economic order.
Sen. Amy Klobuchar, D-Minn., said the moment was reminiscent of the scene in the movie “The Graduate,” where a young Benjamin Braddock is told the future is in plastics. The view was that Canada’s time had finally come.
Biden didn’t particularly buy into that mania, and Trudeau was never Robin to the president’s Batman the way he was with Obama.
Biden did follow Trudeau’s lead in appointing a gender-balanced cabinet.
When the president eventually visited Ottawa last spring, the two men made substantive agreements, particularly on the North American Aerospace Command and an integrated North American approach to clean energy, electric vehicles, and critical mineral development.
Still, there are perennial disagreements. Canada is plowing on with its plan to bring in a digital services tax that would hit US tech companies like Alphabet and Amazon. Washington opposes the move for singling out American firms.
There remains discontent about Canada’s military spending levels, even after last week’s budget announcement of increases that will see it spend 1.76% of GDP on defense by 2028, up from 1.4% now.
But any digressions are more political than policy-related.
The battle for moderates and independents
Biden’s path to reelection could hinge on his ability to win back blue-collar former Democratic voters in places like Pennsylvania’s 8th Congressional District, which went with Donald Trump in 2020.
The president has touted an economic plan to use government investments to rebuild America’s manufacturing capacity, but many voters remain unconvinced after inflation touched 40-year highs.
Polling suggests widespread disappointment with Biden’s performance, even among strong supporters like Black and Hispanic voters. According to an AP-NORC poll last month, only 38% of voters approved of his performance, down from 61% three years ago. The numbers on the economy are worse.
In such an atmosphere, identifying too closely with the left in the culture wars when it comes to transgender policies, diversity, equity and inclusiveness, critical race theory, or on-campus anti-Israel protests would be toxic to Biden’s prospects. He has condemned the intimidation of Jewish students on college campuses. “I condemn the antisemitic protests,” Biden said Monday.
Despite Biden’s falling approval ratings, Trump has even more problems attracting moderate voters. Of the one-third of voters who self-identified as moderates in 2020, 62% voted for Biden and 36% for Trump. There are indications that a significant share of moderate Republicans will not do so again this time.
Recognition that he was out of line with public opinion likely prompted Trump’s surprise announcement that he would not sign a national abortion ban as president, even though he has called the Supreme Court decision to overturn Roe v. Wade “an incredible thing.”
The battle for the moderate and independent vote is firmly engaged, which explains Biden’s tacit acknowledgment of Maher’s point that going too far left could drive the people in the middle into the arms of his Republican opponents.
The story for Trudeau is different, which is not surprising. As Lieber noted, the Canadian electorate is generally to the left of that in the US. Trudeau faces Canadian voters next year, and polling evidence suggests voters have tired of the idiosyncracies that once amused them.
He hopes he can reconnect with young voters and continue to be the standard-bearer of woke culture, prioritizing the interests of historically marginalized racial, gender, and sexual identity groups.
To those special interests, he has now added millennials.
The most recent federal budget focused on the issue of “generational fairness” for people born since 1980, who Trudeau says are not being rewarded like their parents or grandparents. “That’s not right. It’s not fair,” he said.
The problem, as many critics pointed out, was that the Liberals campaigned on a “fairness” agenda in 2015. At that time, “fairness” meant helping the middle class keep more of their income.
That definition shifted over time to appeal to people engaged in the culture wars – a shift from the aspirational left to the identity left.
Millennials may scoff at the Damascene nature of the Liberal conversion to generational fairness. The Trudeau government has recorded eight consecutive budget deficits and doubled the national debt since coming to power – a liability that will be passed on to the generation whose interests it says it is now trying to promote.
One veteran Canadian political observer said the Trudeau Liberals are like an aging rock band that realizes too late that people don’t want to hear the new songs, so they go back to playing their greatest hits.
It remains to be seen whether millennials will give the Godfather of Woke an encore.
Biden, Microsoft, and the United Arab Emirates
Microsoft has quickly become the most important investor in artificial intelligence technology, holding a $13 billion stake in ChatGPT-maker OpenAI. It’s a peculiar deal with a revenue-sharing agreement that’s raised eyebrows from global regulators. But its latest billion-dollar investment is perhaps even more of an eyebrow-raiser.
The US tech giant announced last week that it would invest $1.5 billion in G42, a leading artificial intelligence holding company based in Abu Dhabi. The deal was “largely orchestrated” by the Biden administration, according to the New York Times, an effort to beat back China and gain influence in the Persian Gulf.
“There’s no question the investment was made to try and box out Chinese investment” in artificial intelligence in the Middle East, said Alexis Serfaty, a director in Eurasia Group’s geo-technology practice.
Under the terms of the new deal, Microsoft will let G42 sell its generative AI services and, in exchange, G42 will use Microsoft’s Azure cloud services. It also agreed to stricter assurances with the US government to further cut off China and remove their products and technology from use.
It’s not every day that the White House plays corporate dealmaker, but the administration hasn’t been shy about making AI — and the chips needed to power it — an economic and national security priority. Serfaty said the closest parallel he could think of was the proposed Trump administration deal to hand a stake of TikTok to the US software and cloud giant Oracle. (TikTok’s Chinese parent company ByteDance never sold a stake of its social media app to Oracle, but it did strike a deal to host its US user data on Oracle servers). Plus, the US has recently given massive grants and favorable loans to global chip manufacturers—like TSMC and Samsung—for moving production to the US.
The Biden administration has imposed strict export controls on US-made chips going to China, especially powerful ones used to run artificial intelligence models. The goal: cut off China and hamper their ability to build powerful AI. Tech investments in the Persian Gulf have been something of a casualty of this Cold War over AI. G42 announced in December 2023 that it would cut ties with China in order to keep working with US industry.
“For better or worse, as a commercial company, we are in a position where we have to make a choice,” G42 CEO Peng Xiao told the Financial Times. “We cannot work with both sides. We can’t.”
Serfaty said that the deal signals that the US government is going to increasingly treat artificial intelligence like defense technology, and play a more hands-on role in its commercial affairs and investment.
“When it comes to emerging technology, you cannot be both in China’s camp and our camp,” Commerce Secretary Gina Raimondo told the Times.
Venezuela's President Nicolas Maduro leads the celebration of the 22nd anniversary of late President Hugo Chavez's return to power after a failed coup attempt in 2002, in Caracas, Venezuela April 13, 2024
Biden reimposes sanctions on Venezuela*
The Biden administrationannounced this week it will reimpose oil sector sanctions on Venezuela because President Nicolas Maduro’s government has backed away from a commitment to hold a free and fair presidential election this year.
The US lifted sanctions six months ago, but Maduro’s government has since banned opposition leader Maria Corina Machado from running for president and blocked her chosen replacement from running too.
Now for the asterisk: US oil giant Chevron will be permitted to keep a joint venture with Venezuela’s national oil company. Why? Look at the calendar. Biden’s got an election to win in seven months. Venezuela is a major oil producer, and the US wants to avoid giving oil markets any more reason to worry.
After all, the threat of a wider war in the Middle East is creating oil supply jitters while a rapidly recovering Chinese economy is expected to start guzzling more crude again this year.
So while Joe Biden can no longer pretend Venezuela’s people will have a real choice in their election, with US inflation still stubbornly high, he’s got to make some hard choices about his own — and this is one of them.
US President Joe Biden delivers remarks at United Steel Workers headquarters in Pittsburgh, Pennsylvania, US, April 17, 2024.
Dems push on hot-button election issues
President Joe Biden used a meeting in Pennsylvania with United Steel Workers on Wednesday to call for a tripling of steel tariffs on China. Trade representative Katherine Tai, in response to a petition from the union, also announced an investigation of unfair trade practices in China’s shipbuilding industry.
Administration officials insist these moves are about economics, not election-year politics, but there are clearly messages to be drawn here. Aware that his reelection depends on victory in Pennsylvania and other union-heavy Midwest swing states, we can expect Biden to continue to lean into his “friend of the working man” image. As political commentator Paul Begala has noted, Democrats havelost votes in recent years by shifting “from being the party of the factory floor to the party of the faculty lounge.” Biden appears determined to avoid that trap. It also demonstrates that China will remain a go-to election-year political target.
Democrats are also on offense in a crucial Sun Belt swing state. In Arizona, they worked to force a vote this week onrepealing a hyper-controversial law that bans nearly all abortions, a question that highlights deep divisions on this issue within the state’s Republican Party. The aim was to push state GOP lawmakers to take public positions on an issue many of them would rather ignore. On Wednesday, Republicans opted to prevent the vote from happening, leaving the party with political responsibility for defending the 160-year old law.
Australian Prime Minister Anthony Albanese and New South Wales Premier Chris Minns join other politicians as they lay flowers at the scene of Saturday's mass stabbing at Bondi Junction, Sydney, Australia April 14, 2024.
Hard numbers: Sydney stabbing, Pricey Pakistan, US Steel deal, Costco gold rush
6: Australia is reeling from one of the country’s deadliest mass killings after six shoppers were stabbed to death at a mall in Sydney on Saturday. The attack left several others injured, including a baby who is in intensive care. The assailant, who was shot dead by police, was known to authorities and had been diagnosed with a mental illness as a teenager.
25: Pakistan has the highest cost of living in Asia, according to a report from the Asian Development Bank, and it’s only set to grow with a crushing 25% inflation rate. Authorities have hiked interest rates to 22% to try to alleviate the problem, but Pakistan’s economy will likely require further support from the International Monetary Fund.
14.9 billion: Shareholders in US Steel overwhelmingly voted to approve an offer from Nippon Steel to acquire the company at about $55 a share — but don’t expect the deal to close anytime soon. US President Joe Biden has expressed opposition to the deal, which could cost him crucial support from steelworkers in upper Midwestern swing states like Michigan, Pennsylvania, and Wisconsin.
200 million: Wholesaler Costco is estimated to be selling over $200 million worth in one-ounce gold barsevery month, according to an analysis by Wells Fargo. Those who made their purchases in the fall, when Costco was selling the bars for around $2,000 each have earned a nice bit of profit, as gold has surged to over $2,300 an ounce since March.Cityscape of the Guanabara Bay at the peak of Corcovado Mountain in the Tijuca Forest National Park in Rio de Janeiro, Brazil, 1 July 2019.
Hard Numbers: Brazil bets on tourists, Canada braces for flames, Biden beefs up bridges, Is Ottawa spending too much money?
3: Brazil has now, for the third time,prolonged visa-free entry for citizens of the US, Canada, and Australia. For years, Brazil’s visa policy has operated on the principle of reciprocity — “we ask of your citizens what you ask of ours” – but in 2019, the Bolsonaro administration scrapped that for the US and others to boost tourism. While current President Luis Inácio Lula da Silva pledged to reverse that decision, the flood of US tourists has made it a hard sell. Brasilia now says it’ll wait until next year at the earliest.
6,000: As Canada girds for another “catastrophic” summer wildfire season, Ottawa hasdoubled the tax credit for volunteer firefighters to $6,000. Last year was the country’s worst wildfire season on record, with blazes that displaced more than 230,000 people and sent smoke billowing across the US, blanketing major cities with smog for days at a time.
830 million: Speaking of governments spending money, the Biden administration announced Thursday that it has earmarked $830 million to make US infrastructure — roads, bridges, rails, and ports — more resilient to climate change. The money will go to 80 different projects across 37 states and territories.
59: Is the Canadian government spending too much money? Some 59% of Canadians think so, according to anew survey (carried out just in time for tax season!) The partisan divide is stark though — more than three-quarters of conservative voters said Ottawa is too loose with its cash, but just 30% of Liberal voters agreed.
Japan Prime Minister Fumio Kishida poses with U.S President Joe Biden as they are on the way to state dinner in Washington DC, U.S, on April 10, 2024.
Biden and Kishida bromance is meant to make Xi sweat
The White House showered Japanese Prime Minister Fumio Kishida with gifts and honors during his state visit starting Wednesday, but the friendly display is aimed just as much at Beijing as it is Tokyo.
Kishida and Biden announced an upgrade to the longstanding US-Japan defense agreement on Wednesday that will make Japan’s military more agile by appointing a local US command and organizing a joint military-industrial production committee. The two will hold a trilateral meeting with Philippine President Ferdinand Marcos Jr. on Thursday to discuss further military cooperation.
“The US-Japan security alliance – even though it’s remarkably strong – is not well integrated and unified in a way where forces can rapidly respond,” says Eurasia Group Japan director David Boling, “The long-term goal is for a combined command, with deep force integration, that can respond lickety-split to emergency contingencies.”
A Paul Simonconcert over ribeye must be a nice change of atmosphere for Kishida, who is unpopular and struggling to put a lid on party scandals at home. One of the few areas where he does relatively well with voters is foreign policy, and Kishida has continued the augmentation of Japan’s armed forces while bolstering relations with South Korea, Taiwan, and the Philippines — all potential conflict zones with China.
Tokyo’s relationship with Manila has seen the greatest strides forward, including a new agreement that could see Japanese troops deployed to the archipelago.
“On the Philippines, Japan has recognized that any contingency that escalates into a kinetic conflict is going to immediately implicate Japan,” says Eurasia Group senior analyst Jeremy Chan. After all, many of the US troops and ships that would support the Philippines (or Taiwan or South Korea) are stationed in Japan, making US bases there tempting targets for China.
We’re watching for Beijing’s reaction to Thursday’s trilateral.
Inflation sign going upwards
March inflation report threatens Biden campaign’s economic strategy
The S&P 500 dropped over 1% after consumer inflation rose 0.4% in March and 3.5% from the previous year, indicating that high inflation could be here to stay. The report surprised forecasters and poses a challenge to President Joe Biden's reelection chances, as persistent inflation means higher gas prices and bigger grocery bills for voters.
Energy prices continue to rise – 1.1% month over month and 2.1% year over year – thanks to wars in Ukraine and the Middle East driving up the price of oil and, as a result, inflation.
The latest figures have cast doubt on the Federal Reserve's progress toward its 2% inflation target, meaning it may reassess its interest rate plans. Investors now expect rate cuts to be pushed to later in the year, instead of earlier predictions of a March cut.
This is bad news for Biden, who has been anxious for inflation to fall even further to spur the Fed to cut interest rates — a move that would help drive down borrowing costs for mortgages, car loans, and other consumer credit.