Folks, coronavirus is going to be with us for awhile, and it isn’t going to hit every country the same.
While all eyes are on New York City right now, it is only at the leading edge of the epidemic in the United States. Each metro region is going to experience its own peak and plateau in COVID-19 cases. NYC’s “peak” will hopefully be this week (but it may be a month from now) along with New Orleans and Detroit. Then other cities. The slapdash and erratic nature of the American lockdown, combined with a woefully insufficient testing system and America’s huge geographic spread, ensures that America’s coronavirus peaks and plateaus will not line up, and as such, occur over a much longer period of time.
The damage in the developing world is certain to be far worse. More densely populated cities defined by more cramped living conditions make social distancing difficult to impossible. Even worse, most of the developing world’s workers do not have jobs that enable telecommuting nor do the developing world’s governments have the raw fiscal power of the United States to simply send everyone home for a few weeks. People have to work, and they likely have to work in economic sectors where they most directly interact with one another in specific places. All that encourages both coronavirus’ spread and its ability to treat the poorest parts of the developing world as reservoirs.
Don’t see cases in the developed world yet? That’s no surprise. The virus started spreading there after most of the developed world so the epidemics are still early. Most of the developed world lacks high levels of air travel or between-city mass transit, slowing the virus’ spread. In addition, the very weakness of health systems in the developing world that will make the epidemic more painful also means there is hardly any testing.
Combine a longer American economic shut-off with pending deeper epidemics in the developing world than what we have seen thus far, and the end result will be a global economic system that both splinters and faces a very long period of subdued activity.
This hits every economic sector in some way, but arguably the industry which will suffer the most rapid and catastrophic change will be energy. Before 2020, the greatest global oil demand drop was only 10%, at the height of the 1998 Asian Financial Crisis. As a result, oil prices plunged by three-quarters. So far in the coronavirus crisis, global oil demand is down between 15% and 35%. Unlike in 1998 when low energy prices stimulated energy demand and so prompted its own recovery, this time we have months of large sections of the world simply remaining offline.
Not every producer is going to survive this. In fact, the global nature of the energy sector isn’t likely to survive this.
Join Peter Zeihan for a videoconference April 10 to explore which countries will fall out of the market, which will make the cut, and how the changed map of production will remake consumption patterns in the post-COVID era.
The British government announced March 27 that Prime Minister Boris Johnson tested positive for coronavirus, making him the first world leader to do so. As the United Kingdom is an advanced democracy, here at ZoG we are not overly concerned with Johnson’s isolation and perhaps incapacitation or even death. Part and parcel of democracies is that succession is part of life. The UK will get through this one way or another.
However, there are many countries that are not democracies and there are many world leaders far older than Johnson…
Not all epidemics are created equal, even when everyone is battling the same pathogen. Let’s start with timing and intensity. The imminent coronavirus wave of cases about to hit the United States is going to hurt, but it will hurt less than what’s about to occur in Europe.
Despite all their similarities, there are sufficient differences between America and Europe demographically, geographically, economically and institutionally to generate significantly different epidemic experiences.
Let’s start with connectivity. Despite being all under a single political authority, the US has considerably less connectivity than either China or Europe.
First, because of its failure of national infrastructure. The US has no meaningful passenger rail system aside from creaking Amtrak in the Northeast corridor, and it has no highspeed rail at all. If Americans want to travel long distance, their choices are limited.
Passenger aircraft: While it hasn’t officially been shut down (yet) American carriers have already reduced their flight schedule by over two-thirds, and most of America’s smaller airports are already closed. Expect several of the larger ones to follow suit.
Automobiles: Car travel is slower and outside of summer vacation season (which is likely suspended for 2020) is largely limited to short-haul travel. It is also incapable of serving as robust of a disease vector as passenger aircraft.
Second, it’s a simple issue of size. China is physically larger than the United States, but some 95% of its population lives on less than one-third the land area. Europe’s usable land is one-third less the size of America’s while its population is one-third larger. That makes America’s functional population density roughly half that of Europe and one-fifth that of China. Social distancing is simply easier when there is already some distance baked in to living conditions. Those hell commutes many Americans factor into their lives at least have one silver lining.
Third, the “normal” function of the American economy is a bit more resistant to viral spread than the European or Chinese equivalent. America’s economy is primarily service based, and roughly one-third of its workers can work remotely. Yes, that’s a low number, but it is significantly better than the figure in more industrial China or more manufacturing-based Europe.
Even within manufacturing, arguably the economic sector most impacted by the virus because staff must come to the facility to work, the Americans have a bit of insulation.
In part it is because the outsourcing of manufacturing jobs to China means the US manufacturing base is smaller in the first place and so less likely to serve as a disease vector. American manufacturing largely limits itself to North American needs. It isn’t nearly as export-driven as Europe or China and as such simply has fewer personnel to expose.
In part it is because the America’s manufacturing is integrated with Mexico, a country with which the US has a hard border that limits personnel exchange. For their part, China’s system is largely self-contained within its borders, while the German manufacturing system enjoys passport-free access to all its manufacturing partners throughout Europe.
None of which means the Americans are incapable of having an epidemic, obviously, but it does mean that epidemiologically segregating America’s cities from one another is a far simpler task than doing so in China or Europe.
The road forward will look something like this:
Europe is next up. Best guess is Europe had more – perhaps several times more – coronavirus cases than the United States. What is occurring now in Italy with high numbers of deaths and higher numbers of cases, will repeat in northern Europe on a much grander scale. Americans will get a good hard look at what the virus can do to a place of similar socioeconomic development before the virus crashes into the United States. From the point of large-scale movement restrictions, the peak in cases and deaths is typically two weeks out with notable declines in three weeks. Europe didn’t begin their restrictions until the week of March 16, so expect the epidemic to likely peak in the first or second week of April. In the meantime, Spain is following closely in Italy’s footsteps. Madrid is at the heart of the outbreak with a rapid increase in hospitalizations and a rising mortality count now well above what the US experienced on September 11, 2001.
One to two weeks later comes the United States. For the reasons noted above, the virus’ penetration into the United States will likely be somewhat less intense in terms of number of cases with several metro regions unlikely to experience severe outbreaks, but that doesn’t mean the Americans are in for a softer ride. There will be plenty of population centers that will feel the pain: Seattle, San Francisco, New York and New Orleans are particularly high on our watch list.
American deaths will fall into two general buckets.
First, the elderly. This group will feel disturbingly similar to cases elsewhere. Best data out of Italy suggests the average age of mortality from coronavirus is 80. On the somewhat bright side, however, is the simple fact that the Americans have fewer elderly. Birth rates in most of Europe cratered over 30 years ago, meaning that the average American is about a decade younger than the average European.
The second category for mortality are those with impaired respiratory health. Mild (and easily survivable) cases involve “only” the upper respiratory system and often involve “only” a dry cough and fever. Severe and critical cases (which require hospitalization) see the virus migrate into the lower respiratory system, inducing pneumonia and lung failure. Americans may be younger than Europeans on average, but they are also in poorer health. America teems with “lifestyle” diseases such as obesity and diabetes. Over half the American population has restricted respiratory health, making much of the population more vulnerable to the virus’ effects.
Once the initial peak passes, we’ll start peeking out from under our rocks and start venturing back into the sun. We’ll loosen our quarantines on both sides of the Atlantic, but the virus won’t be done with us. Europe’s higher connectivity means the virus is likely more entrenched more deeply within the population than the United States. Europe’s quarantine will need to last longer, and Europeans’ close proximity to one another means a local flare-up can easily go national or transnational. Distance and the de facto suspension of air travel means the United States can – will – have local flare ups and they will jump cities. But the combination of the virus’ relatively long incubation period combined with the fact that most US cities are at considerable remove will make the post-quarantine period feel like a giant game of whack-a-mole instead of a nationwide secondary (and tertiary, and quaternary…) epidemic.
There’s one additional difference worth noting. Leadership at the national level in the United States and the supernational level in Europe is sorely lacking.
Ideologically, the Trump administration is fairly opposed to government, and as such has refused to fill – three years into its term – many top spots throughout the federal system. Mr. Trump is also pretty hard on what staff he has; Even within his cabinet Trump has a bit of a revolving-door policy for top personnel. For example, the president is already on his fourth chief of staff. Don’t-shoot-the-messenger is a concept largely lost on the American president and he is allergenically opposed to information that doesn’t match his worldview or whim.
That makes epidemic mitigation – something that to be done right requires seeking bad news – damnably difficult. Trump’s decision to stop air traffic first to China and later to Europe was probably the right decision, that bought the United States a month of time to prepare. But then the Trump administration returned to business as usual and, a month later, here we are. Functional action on the epidemic, therefore, falls to the states and cities who are now competing for resources to combat the virus.
Europe isn’t any better, but it is less because of ideology or personality and instead because of constitutional law. The European Union has no indigenous disaster response capabilities, and what little it has are held within the NATO alliance. Since NATO’s backbone is US troops and since not all EU members are NATO members, it is highly unlikely we’ll see NATO forces enforcing quarantines across Europe.
Making decisions about novel situations at the EU level typically requires multiple all-night summits of all EU heads of government to hash out ad hoc legal and financial compromises. Under quarantine, that’s simply impossible. With the exception of Italy, the Europeans didn’t even begin travel restrictions until a week ago. Legally and functionally, the EU’s member states are entirely on their own, and most lack even scant bits of the supply chains required to ramp up medical services.
These differences in health, age, governing and health care systems abound and are giving us a real-life compare-and-contrast case study between two similar-yet-different systems that is simultaneously large-scale, amazing and disturbing. These differences will also generate radically different consequences in finance, manufacturing, currency and governance – all of which will be the subject of subsequent installments in our Coronavirus Guides series.
And now the pitch: the Coronavirus Guides are our primer documents, intended not to finish the discussions of this or that topic, but to launch them. Contact us at Zeihan.com/consulting to inquire about rates and scheduling options for teleconferences, videoconferences and in-depth consulting calls.
Note from Peter: Dealing with health issues that impact family structure is not my strong point either topically or mentally. The bulk of this newsletter is the product of one Melissa Taylor who is both my chief researcher and a mom. If the text reads empathetic, instructive, and unambiguous, that’s Melissa’s voice. If it is snark in the face of despair, that would be me.
I just shared a lovely meal with my family. We all brought our own food and chairs, sat outside, and maintained a constant 6ft bubble around everyone, especially my parents. It was hard with a toddler running around, wanting to hug his uncle and grandparents. But despite that, it was comforting. This family gathering would have made most people laugh in disbelief a few weeks ago. But now it’s the new normal until we’ve been free from exposure long enough to relax… a little bit. That’s about 14 days, though even that might not be long enough to be sure.
Coronavirus manages to play into our weaknesses in a big way. Our brains are bad at comprehending risk, understanding probability, anticipating and accepting big changes, or dealing with uncertainty. So if this crisis has hit you like a ton of bricks, you’re not alone. And don’t worry, those spring breakers in Miami? They’ll have their own…moment.
I’m sure you’ve guessed from our company name – Zeihan on Geopolitics – that we are not doctors. But making the world a bit more comprehensible is what we do, so we have turned our efforts to compiling the best information that we could find to help you understand the virus and protect yourself. I assure you this is purely selfish. If you all get sick, who will read our stuff?
There are three reasons you should stay home and try your damndest not to get coronavirus. The first is that we do not know enough about the virus. Yes, it’s been around for 3+ months, but in part because of the Chinese attitude towards information control and in part because of the nature of viral medicine our understanding is limited. We don’t know if there are long-term consequences to infection for those that recover, but there are indications coronavirus can leave patients with permanent lung damage. There could be other permanent damage. We won’t know until we have people who have survived it get fully checked out months after their recovery. That will take, well, months.
Second, you need to protect yourself and your family. Yes, about half of cases are so mild that they’re mistaken for a mild cold. But “mild” in the medical lexicon means something else: that you simply don’t need to go to the hospital. Another roughly 30% of the cases are that flavor of “mild”: people who experience the worst flu-like symptoms of their life.
The next level up, “severe” affects an estimated 15% of cases. These people end up in the hospital because they require supportive oxygen treatment and are hardly able to use the bathroom on their own. Are most of these “severe” cases older and/or suffering from pre-existing conditions like asthma? Absolutely. Are they all? Absolutely not.
Finally, about 5% of sufferers experience “critical” symptoms. They need a ventilator to breathe. That’s the fancy way of saying they need to be on life support. The largest study – one out of China – indicates half the people in this category didn’t make it (although keep in mind that it appears roughly half of all cases are so mild that they were never diagnosed with coronavirus in the first place, so it’s believed the true fatality rate is far closer to 1% of all cases than 2.5%… as long as hospitals are functioning).
Which brings us to the final reason you should take this seriously. Regardless of the country you consider, no hospital has enough ventilators. America has more critical care beds than anyone else (almost more than everyone else) and we only have 100,000. Those who recover successfully from the “critical” category need a week or so of intensive care.
That means if everyone lines up and gets sick in a very orderly process, and no one anywhere has a heart attack or stroke or gets in a car accident or gets stabbed or shot or otherwise needs critical care, it’ll take nearly three years to cycle through everyone who coronavirus puts into ICU. Even then, this pie-in-the-sky scenario only gives everyone precisely one week of treatment. For many that simply isn’t enough. But with hospitals overloaded, no one will be allowed to linger in those critical care beds.
We have a word for what happens when you have to choose who gets help. Who to save.
Triage.
The Italians and Iranians have been mournfully struggling with that for days. They now have guidelines for who gets any time in critical care and who is left to die.
In the worst-case scenario, four times as many Americans will die than during the whole of World War II, including the lives of doctors and nurses risking their lives for you and everyone you love. You can literally save lives by staying home and binging Netflix. So do it. Now.
Here are some other ways to save lives. Maybe even your own. Let’s start with personal protection based on our current understanding of the virus.
Keep Germs at Bay – Washing your hands is the absolute best thing you can do. Watch this short video on doing it properly. Coronavirus may live on cardboard for a day, plastics and metals upwards of three days. So don’t wear your shoes in your house, clean or quarantine anything coming into your home from outside for at least three days, and use normal alcohol (at least 60% alcohol), peroxide, or bleach based cleaners frequently on commonly touched surfaces. Yes, some of this is overkill. Here at ZoG we are all about viral overkill.
Masks – Donate them. Seriously. There are doctors and nurses going without and everyone knows someone in the field. Reach out to them. It’s not that masks offer no protection, its that unless you’re up in someone’s face – like a health professional – the chances of your mask helping you with anything is extremely low. Keep a small stash in case you get sick to protect your family members from your germs. When more supplies are available, wear a surgical mask everywhere, but not for you. Masks for the general public are more about not spreading illness before you become symptomatic, than protecting you as an individual.
Leaving the house – If you must go out, bring hand sanitizer or alcohol wipes. Wear your glasses. Put on your least serial killer-looking pair of gloves. Don’t shake hands. (Peter’s greeting preference is the Bruce Lee fist-in-palm bow, Melissa goes with the hand-guns *pew pew*.) Keep distance. Pretend the people you’re interacting with are the extended family members you only see at holidays that you’d rather not see at holidays. Six feet is good. Two meters (six and a half feet) is better. Open air is better than enclosed spaces. Keep your hands off of your eyes, nose and mouth. That’s just gross even if there isn’t an epidemic. Most major grocery stores these days have apps which enable you to order and even pay for food ahead of time. That way you just need to pick it up. Use them.
Health – The heathier you are, the better. Get the flu shot. Not because it will protect you from coronavirus, but because you do not want to have the flu and coronavirus at the same time. Coronavirus at its core is a respiratory condition, so get in shape. Run, hike, swim, whatever it is that helps you breathe deeper and easier.
This graphic is from Our World in Data, an excellent source of well researched, accessible data on coronavirus.
What you should know
Symptoms – Symptoms usually appear in about 5 days after exposure, but it could be as many as 14 days (or maybe more. See “We don’t know enough.”). Some people never show symptoms but still spread the virus. This means that if you have been in a risky situation, you should stay away from people with compromised health for at least 14 days. If you develop symptoms, they will likely include fever and a dry cough. You may get extremely tired or have muscle pain. If you are short of breath, you have likely progressed from the “mild” to the “severe” category…overnight. It’s time to call your doctor, immediately.
If You Are Sick – Stay home, even if it’s clearly not coronavirus. Isolate yourself from your family to the extent possible. If you get coronavirus, that does not mean your immediate family already has coronavirus even though you’ve likely been contagious for a few days. They should take precautions from you. The CDC has advice for disinfecting your home
A couple of things to not worry about.
Don’t horde food – The United States is the world’s largest food exporter by a ridiculous margin. Your grocery store has been preparing for this and warehouses are full even if workers are struggling to keep retail shelves stocked. Tech supply chains fall apart because it’s difficult to make an iPhone if you only have 99% of the parts. Food supply chains are the opposite. A taco without salsa may not be fabulous, but you can still eat it. And you only have to have one of the 500 types of salsa which typically make it to your store to enjoy it. (Melissa lives in Austin, so really not exaggerating about the 500.) You may have to come back another day (so don’t let your personal food stores get too low), but more food is incoming. And because food will continue to be prioritized, this should be true even if things get much worse before they get better. And for goodness sakes, don’t horde tap water. It is strictly monitored, safe, and there is no reason to think it’s going offline. Regulations and practices for producing bottled water are not nearly as rigorous and producing bottled water is far more labor intensive (i.e. people cough all over that stuff).
Don’t horde gasoline – Heard of the shale revolution? The United States isn’t simply a net exporter of crude oil, it is the world’s largest exporter of refined product. Product like gasoline. Unlike manufacturing, oil production and refining and fuel transport are extremely low-employment activities. There’s zero reason to expect disruptions to any part of the system for at least the remainder of this calendar year.
How long will this last? We would love to tell you, but we just don’t now. You should start settling in. Best case scenario estimates are a couple months. But that probably just means that about then we will relax…only to a few weeks later have to cope with a flare up in this or that city. There are any number of treatment regimes which show promise, but what we really need is a vaccine. At the soonest that will be October. And that’s very unlikely
Today, I’m not going to go through all the country-by-country details of the ongoing coronavirus pandemic. My team and I are working diligently – franticly – to assimilate a huge amount of ever-changing information. As soon as we have some preliminary conclusions, we will share them. But for now we just don’t have enough hard data.
That will change soon.
This coming week (March 23-28) the South Koreans will be in the fifth week of their epidemic. To be blunt it is what I’ve been waiting for. The “typical” coronavirus experience for someone who requires hospitalization and survives is about 25 days end-to-end; five weeks is about what we need to get some good data.
Why the Koreans? The South Koreans are technically minded, they have a top-notch health care system, they are culturally wired for quick responses, their first instinct isn’t to lie about everything, and they believe in math. They will soon provide the world with the best and most holistic information about all aspects of the virus. If coronavirus had first erupted in South Korea, I have zero doubt it would have been contained, squashed, and we’d not be discussing it at all, much less living under self-imposed quarantine.
Until I have that information, however, I think our time is best served discussing the ongoing panic. In particular, the (I’m not sure this is quite the right word) positive aspects of the panic. There is more to American panic than toilet paper shortages.
The American geography is by far the best on the planet. The Greater Midwest is the largest chunk of temperate zone, high-quality arable land in the world, and it is overlain by the world’s largest internal navigable waterway network. Development and industrialization is the cheapest there of anywhere in the world. Barren deserts, rugged mountains, dense forests, giant lakes and ocean moats make for a nigh invasion-proof homeland. For five generations the United States experienced greater development, rising standards of living, easy financial access, minimal health concerns, rising economic growth, all in an environment of almost perfect security.
This has many, many outcomes. Three are worth highlighting:
First, considering its riches, its low development costs and its security, the U.S. economy is geographically set up for massive success. It isn’t about policy or governance or ideology. It is about place. That cannot be copied. The American system has exited every decade in a stronger position than it was in when it entered, including the decade periods of the Great Depression and Great Recession. It came thru the 1920s Spanish flu epidemic (a far more deadly pathogen than coronavirus) just fine. It will come through this one.
Second, the United States isn’t very good at national governance. When geography takes care of all the big issues, there is little need for a large, overarching, competent, national government. And it shows. The U.S. isn’t Germany or Korea, countries that live in geographic pressure cookers and so governance has to be top notch to ensure survival. This isn’t Russia which is paranoid for good reason and so must excel at intelligence operations. This isn’t Brazil where the terrain and climate are hostile to development and so excellence at infrastructure policy is essential. America’s lack of federal competence means that when there is a crisis it all comes down to the personality, skill and contacts of the person at the top. America’s initial reaction to the coronavirus isn’t its first failure of presidential leadership. But America’s sublime geography means the country will survive this failure to have others down the road.
Third, Americans are cocky. When your national founding myth is one of achievement with minimal adversity, it is eaaaaaaaaaaaaaaaaasy to become convinced you are the Chosen People and life is simply about navigating oneself from success to success. Of course, I think we all realize this isn’t how things actually work. From time to time something or someone punches you in the face. And when that happens to Americans, we absolutely, positively, lose our shit.
Americans have no sense of proportion. The same thing that gives us our can-do optimism and arrogance means that when we face unexpected challenge we fear the covenant with God has been broken and doom doesn’t so much beckon, but instead will crash down upon us presently. And so we panic. We overreact. But we overreact with the power of the world’s largest and most stable and most technologically advanced economy. We overreact with the strength of a continent. We overreact with the world’s most powerful long-range military, a military that absolutely controls all global waterways. And in doing so we reshape the world. Not on purpose, but simply as a side effect of our panic.
American history of all eras is rich with examples of such manic-depressive behavior. Some “recent” ones:
The Pearl Harbor panic fostered the deepwater dominance strategy, culminating in a Navy more powerful than all other players combined.
The Sputnik panic brought us a root-to-branch overhaul of the educational system and industrial plant.
The Vietnam depression married tech to military strategy and brought us JDAMs, cruise missiles, the Internet and cell phones.
The 1979 and 1983 oil shocks led directly to deepwater oil production and the shale revolution.
Our allies understand this. Winston Churchill famously noted that “Americans will always do the right thing, after exhausting all the alternatives.” So do our rivals: a common Russian phrase during the Cold War was “Americans feel that if it is worth doing, it is worth overdoing.”
Americans have not felt a panic since the September 11 attacks. It has been two decades since we were scared. We are due. I always assumed the next fear-response would be because of something that some dumbass country did to the United States, thinking the Americans were over the hill. Then the full force of the United States military and economy would crash down upon it and wipe it from memory.
Apparently, viruses can trigger America’s fear-response too.
In the past 96 hours the United States has gone from functionally zero actions against coronavirus to among the world’s most invasive. And unlike other countries – China comes to mind – who have only instituted constraints on specific areas where there are known coronavirus outbreaks, the Americans have instituted their restrictions nationwide. America now hosts the largest population in the world under lockdown.
The speed and depth of the change is something only Americans can culturally manage, and this is only the beginning.
The scale of resource application that is about to occur is nothing less than historically unprecedented, rivaled only by American actions in previous fear-response incidences.
The Federal Reserve’s new bond-buying program to support the markets? Its only analogue is what the same Federal Reserve did back during the 2008 Financial crisis, but this time it was done in a day instead of a month.
The industrial plant’s re-tooling to make medical supplies? Completely unprecedented…unless you compare it to America’s post-Sputnik industrial overhaul.
Want to see something really impressive? Watch the process for crafting, manufacturing and distributing the coronavirus vaccine. The US just started human trials on March 16. That’s a solid two months faster than any such trials, ever. (And if that were not enough, in the heart of the crisis the US government is attempting to wholesale purchase the German firm furthest along in generating the German anti-coronavirus vaccine. Needless to say, in Germany this is perceived as a total dick move.)
Americans are capable of incredible ideological, economic, technological, logistical, military, and cultural leaps when the panic sets in. The coronavirus crisis is by no means anywhere close to being over, but the switch has been flipped. Now comes mobilization.
These are “merely” things the United States is doing at home. With a few weeks (maybe days?) the Americans are going to do what they’ve done during every other fear-response. Apply (perhaps unfairly) that fear to all aspects of all of their international relationships.
The timing of this particular fear-response gives it far greater weight than those that have come before.
The global system as we know it – the system that has enabled everything from global manufactures trade to global energy trade to the existence of the European Union to the rise of China – is an American creation, designed for the Cold War. That system was the payment to our allies to side with us against the Soviet Union. That system ceased serving American strategic interests at the Cold War’s end, and in the days before coronavirus it was coming to an end. Coronavirus has sped things up, severing most of the remaining ties that bind the world together. No one else has the military capacity to ensure freedom of the seas, nor the demographic consumptive capacity to fuel global commerce. Since their economy is largely self-contained, the Americans really don’t care if the system collapses.
And that was before the coronavirus-induced fear response.
In this environment, other nations need to be extremely careful, lest they court American wrath. America has a near-infinite capacity to act, a near-immunity to blowback, and a near-zero concern for consequences. It isn’t clear to me that there is yet recognition of this fact in the wider world.
Russia’s continual use of military aircraft to needle the North American air defense envelope during an American fear-response is monumentally stupid. I lack the vocabulary to communicate how fantastically foolish it is for Chinese state media to spread conspiracy theories that the US Army originated coronavirus and dropped it into Wuhan. Even Europeans whining that the Trump administration acted too hastily in enacting travel restrictions on flights between Europe and the United States wasn’t perhaps the right time to take issue with American policy.
Yes, all-in-all it has been a crappy couple of weeks, and we should just bake into our expectations that the next three months won’t be even remotely fun. But honestly the real news is that we are now – right now – suspended in a deep-breath moment between eras of history, and the world’s only superpower is absolutely terrified.
I try to avoid US domestic politics in most of my work. In part because domestic politics are a loud and busy space, and it is easy to have your work get lost in the noise and rage. In part because – especially at the primary level – it is mostly fluff that doesn’t move the national needle.
Four things have popped up in the past 48 hours that are worth a look. First, we now have enough preliminary data to say some general things about the virus and the news is good: the virus is neither as deadly nor as communicable as the SARS virus from more than 15 years ago.
This piece is part of the Cutting Room Files, portions of the upcoming Disunited Nations text that were cut for length. Disunited Nations is available for pre-Order now on Amazon.com, Harper Collins, and IndieBound.
Canada is… not a normal place.
Everything from its settlement patterns to its defense strategy to its national politics to its economic structure is wildly different not just from the United States, but from every other country on the globe. Until now that has not had an overly negative impact upon Canadian-American relations, but times are changing (and from the Canadian point of view, not for the better). To really understand recent shifts, we need to start not in Canada, but in Mexico.
It comes down to demography.
Mexico has a more-or-less standard demographic profile. Lots of children, a good number of young workers, fewer mature workers and very few retirees. Chart it out, children on the bottom and retirees on the top, and courtesy of simple mortality you get a pyramid.
For purposes of the North American market, there are two big takeaways here. First, Mexico is hungry. All those young workers having lots of kids means the country is a never-ending festive parade of spending on education and food and diapers and homes and cars. Second, Mexico isn’t all that skilled. This is less an indictment of Mexico’s educational system, and simply that people below age 40 don’t have all that much experience in their chosen professions. It makes Mexico excel at relatively low-value-added manufacturing and assembly, but the Mexicans are forced to leave the high-value-added stuff and design to others.
For the Americans, this makes Mexico the perfect complement. Its people are ravenous for American exports, the Mexican work force meshes nicely America’s more high-value-added workers, and for the most part the two countries do not compete head-to head. No wonder that Trump’s rhetoric on Mexico has evolved so strongly over the course of the past two years from issues of trade to issues of identity and migration.
Simply put, from American point of view, the Mexican demography is the demography of the perfect partner.
Canada’s is not.
Canada’s population bulge isn’t among the young workers who complement the American economic structure, but instead among the mature-worker demographic who compete. A demographic bulge in the 40-65 bracket means Canada is super-saturated with high-skill workers. This extra supply depresses the cost of skilled labor within the Canadian system, which has a similar impact upon the price of the goods the country’s skilled labor force produces.
Even worse, the lack of 20- and 30-something Canadians means Canada cannot even consume its own production. It must dump that production on foreign markets, and proximity alone means that some 75% of it goes to the United States. Economically, Canada isn’t a partner. It is a competitor, and that’s before one considers the Canadian tendency to subsidize industries as unrelated as dairy and aerospace and timber and electricity.
In a time when the Americans are pulling back from the global system and rewriting all their trade relationships, this alone would be cause for great concern in the Great White North. But the Canadian-American economic mismatch is only the first problem.
The second problem in Canadian-American relations is the Americans are having a change of heart about their northern neighbor not simply in economic terms, but overall.
When the Trump administration started its whole the-world-is-screwing-us-and-we’re-going-to-forcibly-renegotiate-all-trade-deals campaign, the Canadians took it as an opportunity to make demands of the United States. That clearly didn’t fit with TeamTrump’s understanding of what was supposed to be going on. Why in the world would the Canadians believe they have leverage over the government who controls the only market that matters to Canada, and global finance, energy and sea lanes to boot?
Canada’s confidence dates back to the Cold War. The flight path for the feared Soviet nuclear missile strike on the United States would have been over Canada. There was no version of American security that would not by default also guarantee Canadian security. The Canadians could have been security free-riders if they had chosen to, but to their credit they have fought and died alongside American soldiers in nearly every overseas endeavor the U.S. military has undertaken.
That does not mean the Canadians did not use their leverage, they just used it on issues of trade rather than security, leveraging their strategic position to gain concessions on market access for their products. The Canadians had a strong hand and they played it well. Repeatedly. Those trade victories were all folded into the original NAFTA accord back in the early 1990s.
It all fit with the times. The whole concept of the American-led global Order was that the Americans would create and subsidize a security and trade rubric to induce countries to join them in the fight against the Soviets. Guns-for-butter was the rule of the era. Canada’s position meant it had more to offer, and granting Ottawa some extra trade concessions for its cooperation was a price the Americans were eager to pay.
Times change.
Canadian negotiators resisted the Trump administration’s trade goals, thinking Canada’s leverage still existed. But with the Cold War over, the Americans no longer fear Russian attack. Canada is now just another country. Once the Americans had finalized NAFTA2 with Mexico, they turned to Canada and issued a simple ultimatum:
Mexico’s market is growing. Yours is not. Your market is protected. Mexico’s is not. The Mexican labor force is complementary to ours. Yours is not. We have a deal with the country that matters, and that isn’t you. We are leaving NAFTA. You know our terms. Take them or leave them. We are moving on.
In a single searing moment of revelation, everything that had guaranteed Canada leverage over America, everything that granted Canada a place in the world, everything that had generated any meaningful international influence, had evaporated. Canada capitulated within days and signed on for NAFTA2.
All things considered, as emotionally crushing and economically damaging as a forced rejiggering of Canadian-American relations will be, it could be (a lot) worse. Canada is very close to the top of a very short list of countries that the Americans have positive feelings for. Will the Canadian ego and economy suffer under NAFTA2? You betcha. But Canada will still enjoy privileged, security-risk-free access to the American market. In a post-Order world precious few countries can claim the same. Canada may limp, but it will still be able to walk.
Unless the third issue completely overturns the Canadian system from the inside.
Again, Canada is not a normal place. Unlike the United States where the states and federal government exercise roughly equal amounts of power, in Canada the provinces are preeminent and often have the ability to block federal policies they do not like. The country didn’t even get its first comprehensive internal free trade agreement until 2017.
As such, the provinces of Canada function less like components of a common country, and more like a loose clutch of independent countries which compete – oftentimes furiously. That would be problematic enough if the provinces shared a common demographic base. That, they do not.
Quebec is as vitriolically Francophone as the Maritimes are Anglophone. A huge chunk of the population of Toronto is South Asian, while East Asians tend to be overrepresented in Vancouver. The Prairies are as white bread as America’s upper-Midwest. These splits at least partially explain the seemingly never-ending drama of Quebecois separatism, but it is the intersection of demography and economics where the real problems erupt:
The Maritimes’ economies crashed decades ago and its subsequent “recovery” has been anemic at best. Now those provinces have all aged into mass retirement making them de facto wards of the national government. Mighty Quebec is only a few years behind, and is making the transition to demographic basket case right now. Both British Colombia and Ontario are no more than five years behind Quebec. A big piece of the BC economy is serving as the gateway to Asia, and the Trump administration’s trade war is likely to enervate those links. Even worse, the NAFTA-integrated manufacturing and agriculture that makes Ontario and Quebec hum were sectors that specifically benefited from NAFTA1, and which now face far steeper competition from the United States and Mexico under NAFTA2. More specifically, Quebec’s aerospace company, Bombardier, is both one of the most heavily subsidized in the world and is linked into Airbus – a firm that is both the target of extensive American tariffs and one whose fate is locked up in the Brexit drama.
Functionally, that restricts economic dynamism to the demographically young provinces of Alberta and Saskatchewan, a pair of entities whose economies depend upon old-school oil and natural gas production. For years now, funds transfers from the pair – quintuply so from Alberta – to the center is what has enabled Canada to enjoy its much-lauded social welfare state.
That’s not the end of the story, but instead just the beginning.
Canada’s leader is one Justin Trudeau, a scion of a powerful family. Justin’s father, Pierre, was a force of nature. Love him or hate him, everyone acknowledged that Trudeau the Senior was a commensurate politician. Dude could work a room, and it isn’t much of a surprise that he served as Canada’s prime minister for 16 years.
Justin, in comparison, isn’t a particularly smooth operator. His rise to the prime minister’s chair five years ago largely occurred because of circumstance. Many Canadians had tired of a decade of conservative minority rule under the somewhat curmudgeonly Stephen Harper. A coalition of liberal players banded together around the Trudeau name and managed to carry an election.
In that environment, Trudeau the Younger fit the bill. He isn’t very bright, his French is on the weak side, his past work experience was at best mediocre, but he is young and so very very pretty. In a world of social media and an increasing split between modern liberal values and traditional economic sectors, that proved enough.
Under Justin Trudeau’s rule Canada has… gotten by. There have been no disasters, but few serious new policies. Really, Justin Trudeau’s administration has only shifted two things.
First, it has steadily centralized power in Ottawa, making it easier to drain cash from Alberta and Saskatchewan both to balance out the slipping economic performance of the rest of the country, and to push this or that pet policy. Second, the pet policy of the moment is a fairly aggressive environmental program that has proven popular with Justin Trudeau’s base. That program has put ever-more-stringent restrictions on the economies of Alberta and Saskatchewan – specifically on the sectors that make the Canadian national budget possible.
Justin Trudeau’s lackluster performance has cost him. His Liberal Party has been ejected from parliaments in Alberta, Saskatchewan, Ontario and some of the Maritimes in favor of the conservatives; in BC in favor of the left-leaning NDP and Greens; and in Quebec in favor of more nationalist sentiments who are furious with his capitulation to the Americans in NAFTA2.
Within the Liberals, the future isn’t all that bright either. Aside from the Trudeau name, the one characteristic that Justin inherited from his father is the charisma necessary to suck all the air out of the room. Justin is such a big presence that there is no next-generation of young leaders working their way up through the Liberal Party ranks. When Justin falls, so too will the party.
Fast forward to this week.
The Canadians voted in national elections October 21. Justin Trudeau’s Liberals were not exactly gutted, but they lost a lot of seats ending up with just 157, thirteen shy of what’s necessary to form a majority government. That will force the Liberals to rely upon support from the Greens (whose primary concerns are climate change policies) and the NDP (who are like a more math-challenged version of the Greens).
For Canada as a whole, this courts disaster.
Political sentiment in Alberta and Saskatchewan turned sharply anti-Green and anti-Trudeau years ago. The Albertans and Saskatchewanians assert the Greens, the NDP and the Trudeau government are actively conspiring to stymie any and all efforts to get Albertan and Saskatchewan energy exports to the wider world. The Greens and NDP openly say they do, with anti-Albertan policies in the one province they control – British Colombia – having reached the point that BC and Alberta have a hot little inter-provincial trade war going. The Trudeau government attempts to be at least a bit circumspect on the issue, but under Justin Trudeau’s rule construction has yet to begin on a single cross-province pipeline.
Legally, there is an excruciatingly painful route forward. Quebec’s on-again, off-again independence spasms firmly established that Canadian provinces have the right to leave Canada. Paths to secession have been approved – at least in theory – by both the Canadian parliament and the Canadian Supreme Court. We are approaching the witching hour.
There is no modern Canada without Albertan and Saskatchewan financial strength, and there is no Albertan and Saskatchewan financial strength without the two provinces’ energy sectors. Now, with the Liberals needing Green/NDP support to rule, the already-deep political split is taking on more ideological, more hostile overtones.
The vote breakdown is not encouraging. In Monday’s elections the Liberals lost every seat they previously held in both Alberta and Saskatchewan. In an echo of America’s 2016 presidential elections, the opposition Conservatives actually won the popular vote, but because of Canada’s equivalent of America’s electoral college they earned 25 fewer seats than the Liberals. Further mirroring America’s more recent political evolutions, Justin Trudeau claimed a “clear mandate” for stricter climate-change-related policies – an assertion positively Trumpian in its ability to creatively reinterpret the facts on the ground.
We are likely to see two things over the course of 2020.
First, the new federal political alignments are the absolute worst-case scenario for Alberta and Saskatchewan. They have already tried and failed – horribly – to renegotiate their financial relationship with Ottawa, and now they can look forward to ever harsher restrictions on their economic capacity paired with ever more robust siphoning of their wealth to the Canadian center. The formal, open, public debate on secession begins now.
Second, the Americans are likely to take both notice and action.
In the War of 1812 Canadian colonials burned down the American capital. In the war’s aftermath, realizing the Americans would be jonesing for revenge, the Canadians carried out what has arguably been the most successful rebranding effort in history, from trigger-happy arsonists to polite, cuddly socialists.
That effort enabled Canada to avoid American wrath. Later, Canada maintained a bit of protection due to its status as part of the British Empire. In the interwar period the U.S. had bigger fish to fry at home, what with the Great Depression and all. Post-World War II the Americans’ need to maintain the global Order meant that Canada, for all its inconsistencies, was under American protection – which included protection from America.
The Canadian system is splitting along provincial, economic, demographic and ideological lines, and there is no one in the Trump administration who likes Justin Trudeau personally, ideologically or politically. Add in a now-unrestrained America, an America who sees Canada as a competitor, an America who sees the Canadian government as a mix of annoying and ungrateful and self-righteous, and a complete role-reversal is fully in play. Unless the Canadians can get their shit together, it will be eeeeeeasy for Washington to start cutting deals with individual Canadian provinces to hammer preexisting wedges ever-deeper into the Canadian system.
Alberta has the means and motive to destroy Canada. Washington has the means and motive to destroy Canada. And the likely format of the new Trudeau government is providing the opportunity.
This piece is part of the Cutting Room Files, portions of the upcoming Disunited Nations text that were cut for length. Disunited Nations is available for pre-Order now on Amazon.com, Harper Collins, and IndieBound.
American-Mexican relations have been…colorful of late. American President Donald Trump has threatened Mexico with a rising tariff system that would constitute the greatest tariff effort in dollar terms by Americans in their history. Mexican President Andres Manuel Lopez Obrador (AMLO) is pushing a change to tax law that would more or less treat businesspeople like money launderers which would throw trade relations into the freezer. Threats and counterthreats on migration and trade and law enforcement and energy and water rights have ratcheted up to near-crisis levels.
This is actually… really good. Ever since Mexican independence in the early 19th century, American-Mexican relations have oscillated between cold-shoulders and American invasions. Today, really for the first time in both countries’ histories, the Americans and Mexicans are not talking past one another, but instead speaking with each other. The process is loud and messy, yes, but it is actually a conversation. The United States and Mexico are working out deals, making functional compromises, and finding common ground. What’s been happening the past two years are the sorts of interactions one would expect between two countries who find themselves increasingly intermingled both economically and demographically. We all fight most vociferously with our families.
That hardly means it is all well thought out. One of the most frustrating things about working in the geopolitical forecasting space is that sometimes luck plays a role, and that has most certainly been the case of late.
Consider the individuals helming both countries.
In the United States, Donald Trump rose to power on a wave unapologetic nativism, which expressly included a harsh campaign against Mexico on economic, political, security and racist grounds. On the other side of the border is AMLO, a guy who combined Trump’s disdain of foreigners, Elizabeth Warren’s enthusiasm for dressing down corporate interests, Ted Cruz’s penchant for blind obedience to ideological dogma, a Clinton-esque love-affair with political corruption, and Bernie Sanders’ pathological refusal to engage in basic mathematics. It’s difficult to imagine a set-up that would be less constructive to functional bilateral relations.
And yet, here we are, with the Americans and Mexicans enjoying the most positive bilateral relationship ever.
The unexpected outcome largely has to do with an olive branch from AMLO. After his election in mid-2018, but before his inauguration in late-2018, AMLO apparently had an epiphany. He realized that if he and Trump engaged in a binational pissing contest over who was more populist, the bad blood would consume his entire presidency. As he had put together a laundry list of tasks to remake Mexico in his own image, that simply would not do. So he reached out to both his predecessor and Trump, and indicated that if they could complete the renegotiation of NAFTA2 before he took office, he would not seek to reopen talks and would ensure the new deal would be ratified in a timely manner.
AMLO has since proven to be a man of his word. Mexican ratification occurred on June 19 of this year.
While there are obviously portions of NAFTA2 the Mexicans are less than enthused about and the new deal will disrupt a great many industrial patterns across the length and breadth of Mexico, for the most part the new deal is as much a win for Mexico as it is for the United States.
Among the Trump administration’s biggest goals in the NAFTA renegotiations was to make sure goods that benefitted from the low tariffs of the NAFTA system were mostly produced inside of it. These “rules of origin” quotas were increased and ensure that a certain percentage of the product’s value was produced within Mexico, Canada, and the United States rather than outside of it. As Mexican manufacturing capacity is both less expensive and more efficient than most manufacturing in both China and Canada, Mexico will certainly pick up a disproportionate share of whatever relocates to the North American market. Add in the general breakdown of the global Order, and Mexico’s now-even-more-privileged access to the American market, and Mexico’s economic future looks brighter and brighter.
Merchandise trade is only one of several aspects of a tightening, more constructive, relationship between the two North American powers.
One of the many aspects of America’s shale revolution is an accidental, incidental oversupply of natural gas prices in the U.S. market. American natural gas prices are now the lowest (unsubsidized) in the world, and a dozen major pipeline networks have been laid down to connect that supply to Mexican demand. All the pipes are now completed and soon about half of the electricity consumed in Mexico will be sourced from American natural gas.
One of AMLO’s less-functional plans is an overhaul of Mexico’s state energy monopoly Pemex, a company so badly run and a process so ill-conceived that it would probably be better for Mexico to burn the entire company to the ground, shoot everyone involved, and start over from scratch. The more dysfunctional Pemex is, the less able Pemex will be able to meet Mexico’s growing energy needs… and so the more reliable a customer Mexico is for American energy product exports.
Mexico has rapidly developed since the implementation of the first NAFTA accords back in the early 1990s. That has shifted millions of Mexicans off subsistence farms and into urban environments, even as the standard of living of the average Mexican has surged. Less agricultural production plus more disposable income makes Mexico a premier destination for American agricultural products. In particular, when Mexicans get a bit of extra scratch, the first food product they reach for is beef – American beef.
Higher living standards within Mexico have gutted immigration from Mexico to the United States – it has been negative for ten straight years. That gives both countries a vested political interest in regulating Central American migration through Mexico to the United States. One of the dirty secrets of the immigration debate in North America is that Mexicans are even more opposed to Central American migration than Americans. Trump has provided the Mexicans with the perfect excuse to crack down on the through-migration, while enabling the Mexican government to rack up a public relations win.
While Mexican migration to the United States peaked years ago, past migration has made Americans of Mexican extraction the second-largest minority in the United States. Even if the economic mingling were not occurring – and it has already surpassed that of any other American co-mingling in history – the demographic co-mingling easily puts Mexican cultural influences in third place behind German and British culture.
Taken together, Mexico is now America’s second-largest partner in energy, trade, agriculture and security, and is on the cusp of taking the top spot in all categories.
So… that’s the good news.
Understanding the bad news requires a bit of a step back.
Roughly a decade ago Mexican and American authorities were tracking hundreds of small groups involved in moving cocaine and marijuana through Mexico to America’s southern border. Just as mountainous regions help fracture regions among several competing countries, Mexico’s mountainous geography meant no single drug trafficking organization (DTO) could command all that much territory. A small DTO might control a single stretch of highway, or a single city or a local shake-down racket. Violence between these groups and Mexican law enforcement was horrific, but that carnage was nothing compared the violence among the various drug trafficking groups as they battled to expand their role in the drug trade or defend their patches from one another. In that environment, Mexico’s murder rate soared.
But even then, not all DTOs were created equal because not all DTO leaders were created equal. Today’s story involves a 5’ 6” dude by the name of Joaquín Guzmán, aka El Chapo (which roughly translates as “shorty”), who ran his drug group less like the Sopranos or a street gang, and more like a Korean chaebol.
Under his hand, the Sinaloa alliance focused on three general themes:
First, the bread and butter of drug smuggling to the United States. Violence within the alliance was snuffed out, while the sort of petty violence – assaults, rapes and robberies – that characterized other DTOs was frowned upon. Regular Mexican citizens living in Sinaloa territory were not terrorized by the cartel, so they tended to not resist its efforts.
Second, experimentation with new business lines that would enable the Sinaloa to deepen and expand its business. Cocaine never went out of fashion, but the cartel also commercialized heroin and methamphetamines. Selling counterfeit pills to profit from Americans’ opiate addition was an easy add. Cash-heavy businesses found favor as a means of assisting in the drug-money-laundering effort: limes, beef, avocados, real estate, tourism. More business lines mean more and more stable profits.
Third, oblique cooperation with the Mexican government to help weaken the competition. Officially, the Sinaloa would provide the Mexican government with scads of intel on their competitors’ operations. Unofficially, the Mexican government would turn a blind eye to the Sinaloa’s operations because Mexico City could only prosecute raids on so many targets at a time. The Gulf and Zeta cartels tended to suffer the most from this de facto alliance.
El Chapo’s strategies were so successful the Sinaloa grew to become the most powerful organized crime group not simply in Mexico, but the world. As the Sinaloa alliance expanded and deepened, violence among its constituent components plummeted. After all, they were all on the same side, and El Chapo did not tolerate infighting. Mexico’s murder rate fell.
But nothing happens in a vacuum. Sinaloa’s success meant it also became the most powerful organized crime group in the United States, which earned El Chapo a spot at the top of the Obama administration’s most-wanted list. A joint American-Mexican effort resulted in his arrest in 2014. El Chapo promptly escaped… and was re-arrested in 2015. Mexico extradited him to the United States in 2017, where following his conviction on… lots of charges he is now serving multiple life sentences in an American prison.
Without the business-minded El Chapo to ride herd on the Sinaloa alliance, the relative peace of the Sinaloa era quickly collapsed as the DTO’s various factions fought for control. The biggest and baddest of those factions is known as the Jalisco Cartel Nuevo Generacion, a group run by the Sinaloa’s former enforcers. Whereas the Sinaloa expanded by collaboration and diversification, the Jalisco expands by brute violence.
Four things come from this.
First, the Jalisco is not the Sinaloa v2.0. The Jalisco’s leader – Nemesio Oseguera Cervantes aka El Mencho – first instinct is to kill everyone in every room he enters. He absolutely lacks El Chapo’s charisma and management skills. The Jalisco is expanding, particularly in challenging its former patron, the Sinaloa, but it is most certainly not on course to dominate the drug trade.
Second, between the Sinaloa’s fall and the Jalisco’s rise, Mexico’s murder rate is once against setting record after record. El Mencho has also – repeatedly – broken the cartels’ unwritten rule that one does not engage in open violence in tourist areas.
Third, the Sinaloa is not dead and still supplies the majority of drugs that enter the United States. After a year of chaos and breakdown, elements of El Chapo’s family – most notably his sons – have seized control over what was left of the alliance and thrown up substantial roadblocks to El Mencho’s bloody expansion. Los Chapitos may not be the leaders their father was, but they have proven far from incompetent.
To give an idea of just how potent the Sinaloa remains, consider the events of last week. A government raid October 17 on a suspected sniper in the city of Culiacán accidentally captured one of los Chapitos. Shocked by their unexpected haul, the government stammered a bit. Shocked by the loss of one of their own, the entire Sinaloa alliance descended upon the city in a tsunami of carnage, forcing the unprepared government to release El Chapo’s son. In northwest Mexico, the Sinaloa remains the de facto government. The old man would undoubtedly be proud.
Which brings us to the fourth and arguably most important outcome. El Chapo’s business diversification efforts combined with the breakdown in the “peaceful” nature of the Sinaloa’s management strategy combined with the rapidly deepening economic integration between the American and Mexican markets means that the cartels are now becoming part of the North American economic picture and they are bringing their violence levels with them.
At present this expansion has not penetrated manufacturing – that’s an industry that’s simply too high value-add and too finance-heavy for easy links with DTOs. But nearly everything else is game: transport, trucking, energy, agriculture, construction, tourism, real estate. All these sectors and more now have DTO threads woven throughout, particularly in the Sinaloa heartland of northwest Mexico. And it doesn’t take a big leap to link these Mexican sectors with their American peers. First landfall of Mexican DTOs in these veins will be U.S. regions just across the border from Sinaloa strongholds: Tucson, Phoenix, El Paso, San Diego, Los Angeles and the California Central Valley.
It is worth remembering that while the collapse of the global Order has consequences for everyone, and in many cases those consequences will be the determining factor in a country’s future, regional and local factors don’t simple fade away. Countries’ local geographies and local economic trends and local histories remain relevant. Global shifts are likely to favor Mexico more than any other country, but it can still get tripped up on issues closer to home.
