Jacob Shapiro: "Sell America" Is Real—Canada Breaks Away, NATO at Risk & the Shift to Multipolarity

Key Concepts

• Sell America: A trend of global investors diversifying away from US assets, driven by geopolitical uncertainty and concerns about US economic policy.
• Multipolar World: A shift away from US dominance towards a world with multiple centers of power, including China, Europe, and regional players.
• Middle Powers: Countries seeking to navigate a multipolar world by forging partnerships and maintaining independence from major powers.
• USMCA Renegotiation: Potential renegotiation of the United States-Mexico-Canada Agreement, with Canada taking a more assertive stance.
• Geopolitical Risk: The impact of political and international events on financial markets and investment strategies.
• Populism & Economic Policy: The influence of populist political agendas on economic decision-making and market perceptions.

Geopolitical Shifts and Investment Implications: A Discussion with Jacob Shapiro

Introduction

This discussion with Jacob Shapiro, Director of Research at the Bespoke Group, centers on the evolving geopolitical landscape and its implications for investors. The conversation highlights a shift away from US dominance, increasing assertiveness from Canada and Europe, and the potential for significant economic and political disruptions. The analysis emphasizes the importance of understanding underlying trends beyond the daily “reality TV show” of political headlines.

I. The “Reality TV Show” Presidency & Economic Concerns

The conversation begins by characterizing the Trump presidency as a “reality TV show,” emphasizing its focus on dominating news cycles and utilizing social media. Shapiro notes this approach is unique in modern US presidential history. A critical point raised is the concerning trend in Trump’s approval ratings on economic management. Specifically, his current numbers mirror those of Joe Biden upon leaving office – a “kiss of death” for a reelection campaign. This suggests a growing voter perception that the economy is not performing as expected, despite Trump’s claims. The speaker emphasizes that the economy is the primary concern for voters, overshadowing geopolitical drama.

II. Canada’s Assertive Shift & USMCA Implications

A significant development discussed is Canada’s increasingly independent stance, signaled by Mark Carney’s actions and statements. Initially, expectations were for Carney to secure a quick USMCA renegotiation favorable to the US. However, Carney has instead forged strategic partnerships with China and Qatar, securing investments in Canadian energy infrastructure designed to reduce reliance on the US. He publicly criticized the “liberal international order” and asserted Canada’s willingness to engage with multiple partners – China, the Gulf states, Europe, and even the US – but on its own terms.

Shapiro explains that this move is driven by a growing Canadian national pride and a willingness to endure economic pain to avoid being treated as a “51st state” by the US. The outcome hinges on Trump’s response: a cooperative approach could benefit Carney, while a punitive response could create a difficult period for Canada, though potentially positioning it for long-term stability.

III. Middle East Dynamics & The Syrian Kurdish Situation

Shapiro highlights the situation with the Syrian Kurds as a crucial, yet often overlooked, development. The US is urging the Kurds to rejoin Syria under a former al-Qaeda operative, potentially destabilizing the region. This situation is significant because it could trigger a broader Kurdish nationalist movement, uniting Kurdish groups across Syria, Iraq, Iran, and Turkey. The speaker notes that historically, Kurdish groups have been divided, but a unified movement could reshape the Middle East’s power dynamics. Turkey’s quiet but growing influence in the region is also noted.

IV. Greenland & The Future of NATO

The discussion touches on the Greenland situation, framing it as a potential catalyst for a major geopolitical shift. Shapiro warns that if the US decides its current agreement regarding Greenland is insufficient and attempts to assert control through military deployment, it could lead to the collapse of NATO. This would signify a major fracturing of the transatlantic alliance and the rise of an independent European security posture.

V. The “Sell America” Trend & Economic Vulnerabilities

A key theme is the emergence of a “Sell America” trend, where global investors are diversifying away from US assets. This isn’t a sudden collapse, but a gradual shift in portfolio allocations, with countries increasing their holdings of currencies like the Swiss Franc and Singapore Dollar, as well as precious metals and even cryptocurrencies. This trend is driven by concerns about US political instability, unpredictable trade policies, and the politicization of institutions like the Federal Reserve.

Shapiro argues that the US Treasury is no longer a reliable “safe haven” asset. He emphasizes that constant economic uncertainty is more damaging than tariffs themselves, as it discourages investment and long-term planning. He notes a growing perception among voters that the economy is not performing well under Trump, despite his claims.

VI. The Rise of Middle Powers & A Multipolar World

Shapiro articulates a vision of a multipolar world, not dominated by the US and China, but characterized by the rise of “middle powers” seeking to maintain independence and foster trade. These countries are forging partnerships with each other, seeking to create a network of relationships that are less reliant on the two superpowers. He cites the EU-India and EU-Mercosur trade deals, as well as Canada’s engagement with China and Qatar, as examples of this trend. He stresses that while these powers lack the military might of the US and China, they possess economic leverage and a desire for stability.

VII. Japan’s Potential & European Opportunity

The conversation briefly addresses Japan, noting its potential for significant change if it embraces reforms and addresses its demographic challenges. Shapiro believes Europe, despite its internal issues, presents a significant opportunity, particularly if it invests in energy independence and technological innovation. He argues that Europe is capable of overcoming its energy vulnerabilities and becoming a more assertive geopolitical actor.

VIII. Biggest Risks & Opportunities

Shapiro identifies the potential US military intervention in Greenland as the biggest risk, as it could trigger the collapse of NATO. He sees the biggest opportunity in a more assertive and independent Europe, as well as in investments in countries with secure energy supplies and a focus on cutting-edge technologies.

Conclusion

The discussion paints a picture of a rapidly changing geopolitical landscape, characterized by declining US dominance, rising assertiveness from regional powers, and increasing economic uncertainty. The key takeaway is the need for investors to look beyond short-term headlines and focus on long-term trends, diversifying their portfolios and seeking opportunities in a multipolar world. The speaker emphasizes that while geopolitical risks are significant, they also create opportunities for those who are prepared to navigate the changing dynamics.