How the great deal maker got played

While Trump was gearing up his trade war machine, [Mark] Carney, Canada’s Prime Minister, wasn’t just sitting in Ottawa twiddling his thumbs. He’d been quietly increasing Canada’s holdings of U.S. Treasury bonds—over $350 billion worth by early 2025, part of the $8.53 trillion foreign countries hold in U.S. debt. On the surface, it looked like a safe play, a hedge against economic chaos. But it wasn’t just defense. It was a loaded gun.

Carney didn’t stop there. He took his case to Europe. Not for photo ops, but for closed-door meetings with the EU’s heavy hitters—Germany, France, the Netherlands. Japan was in the room too, listening closely. The pitch was simple: if Trump went too far with tariffs, Canada wouldn’t just retaliate with duties on American cars or steel. It would start offloading those Treasury bonds. Not a fire sale—nothing so crude. A slow, steady bleed. A signal to the markets that the U.S. dollar’s perch wasn’t so secure.

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The U.S. Treasury market is the backbone of the global economy. Foreign holders like Canada, Japan, and the EU keep it humming, financing everything from America’s military to its tax cuts. Start selling those bonds in unison, even gradually, and the yields spike. The dollar wobbles. Borrowing costs climb. Suddenly, Trump’s “beautiful” bond market—he bragged about it just yesterday—looks like a house of cards in a stiff breeze.

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Foreign countries hold $8.5 trillion of U.S. debt (as of 2025).

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They buy bonds to park money safely and earn steady interest.

The U.S. uses this borrowed cash to fund everything—military, Social Security, tax cuts.

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If countries like Canada, Japan, and the EU start selling bonds together (even slowly):
Flood of Bonds: Too many bonds hit the market at once.
Prices Drop: More supply than demand pushes bond prices down.
Interest Rates Spike: When bond prices fall, yields (interest rates) rise to attract buyers.

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Higher interest rates mean the U.S. pays more to borrow. Debt Snowballs: The U.S. owes $34 trillion already; pricier loans make it harder to manage. [...] Selling bonds means dumping dollars, so the currency’s value drops.

Spending Dries Up [...]
Businesses Tank [...]
Imports Cost More: A weaker dollar makes foreign goods (oil, tech) pricier, jacking up inflation.

Markets Crash[...]

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A slow, coordinated sell-off isn’t a bluff; it’s a quiet gut punch that would take the US YEARS to recover from.

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Canada wasn’t alone. Japan, holding over $1 trillion in U.S. debt, signed on and started to sell those US Treasury bonds which scared Trump shitless. Key EU countries—collectively sitting on another $1.5 trillion—nodded in agreement. This wasn’t a bluff. It was a silent pact. A coordinated move to remind Trump that the free world doesn’t just roll over when he swings his tariff bat.

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Trump’s spent years calling Canada a freeloader—remember his 2019 NATO jabs?—while ignoring the inconvenient truth. Canada’s $350 billion in U.S. debt isn’t charity. It’s a lifeline.

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When Trump announced his tariff “pause,” it wasn’t a victory lap. It was a concession.

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Carney made sure to tell the world that despite Trump kissing our northern ring, we’re not negotiating shit until after the election. He also said we’re still moving away from our relationship with the US for greener, saner pastures.

  Dean Blundell Substack