1 Samuel 17:48–50

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  By Guest Blogger Doug Rowat

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Bloomberg columnist John Authers nails it:

Donald Trump is a bully. If you don’t recognize that, the chances are that you had a better time at school than I did. Bullying can be an effective, if morally questionable, way to get what you want…[and] smaller nations are natural targets.

I played Dungeons & Dragons growing up, so I share Authers experience with bullies and whole-heartedly agree with his assessment of Trump. But identifying the bully isn’t the hard part, the difficulty is figuring out the best way to deal with them.

And this is the crossroads that PM Mark Carney finds himself at.

The trade war’s now in full swing and we’ve been trolled by the US in every conceivable way, including most recently being called a “little yippy dog” by Treasury Secretary Scott Bessent. Of course, our feelings on these matters are clear, but it’s interesting that Americans don’t much like the trade war or the trolling either:

What Americans think about Trump’s trade war with Canada

Source: Reuters/Ipsos

All of this dovetails, of course, with Trump’s dismal overall approval rating, which according to Reuters, stands at only 33%, the lowest level of his second term with an even lower approval rating (only 22%) for his handling of cost-of-living expenses. Inflation is killing Americans’ finances, but it’s also killing Trump’s popularity.

But America’s negative reaction to Trump’s policies is all part of Carney’s calculus as he retaliates on tariffs. No one, of course, believes that Canada could actually survive an extended trade war with an economy that’s 10 times our size, but the present battle becomes an exercise in game theory. Carney’s essentially playing a game of chicken. He’s not concerned with the duration of the trade war because he’s wagering that Trump will blink first, and relatively quickly.

Here are Carney’s advantages or, from a game-theory perspective, evidence for why challenging the US is, for now, the ‘optimal response’:

The Canadian economy is doing much better than the US’s. Annualized Q2 GDP growth was 3.3% in Canada versus only 1.5% in the US. In hockey terms, the US is the bigger team, but our team is healthier.

1. Republicans are unlikely to survive the US mid-terms. Polymarket pegs the odds of the Republicans losing the House at 88% with a 53% chance of losing the Senate. Losing control of Congress would cripple Trump’s agenda. Trump needs wins before November and a trade deal with Canada would be just that. (Forget highlighting that Trump created this trade problem to begin with—Trump’s bread and butter is taking credit for solving problems that he himself creates.)
2. The Trump TACO. You don’t earn a detailed Wikipedia entry highlighting all the times that you’ve watered down your own trade policies if it’s not a genuine behavioural tic. Bloomberg Economics also calculated that of the 49 tariff threats that Trump made over roughly the first year of his second term, only about 1 in 5 remained fully implemented.
3. The Americans have made their trade terms so unpalatable with promises so frequently broken that it’s actually become (again, for now) the better option for Carney to engage in a trade war. Essentially, Trump has overextended his own bullying. Bullying is only useful if it intimidates and steers a victim in the desired direction. Once being bullied becomes a worse option for a victim than fighting back, the bullying’s failed.
4. In game theory, a winning strategy often involves assuming that other players in the game will act co-operatively. Mathematician John Nash (Russell Crowe) in the famous pub scene from A Beautiful Mind said it best: “The best result would come from everyone in the group doing what’s best for himself AND the group.” But in this instance, the objective isn’t to pick up girls at a bar through co-operative action between bros, it’s to weaken the US’s position through co-operative action between nations. Literally, as I was writing this, the following Bloomberg headline popped up on my phone:

Source: Bloomberg

Carney’s likely considering all of the above and betting that Trump doesn’t really want a protracted trade war with Canada.

But maybe I’m wrong and Trump’s prepared to go the distance. In which case, Carney’s gambit becomes a losing proposition with dire economic consequences. However, game theory almost always suggests that the best way to win a war with a bully is to stand up to them.

It’s presently our best option, and even if we lose, Carney’s making sure that Trump eats a few elbows before we hit the ice.

Doug Rowat, FCSI® is Portfolio Manager with Turner Investments and Senior Investment Advisor, Private Client Group, Raymond James Ltd

Source: https://www.greaterfool.ca/2026/09/12/1-samuel-1748-50/