Trump’s options are limited. There’s a reason this latest missive only impacts 5% of Canadian imports. The Supreme Court already decided the president can’t invoke emergency powers to impose tariffs. Walmart is now using its tariff refund to lower prices. The Iran war has increased demand for Canada’s oil, aluminum and fertilizer; Saskatchewan is known as the Saudi Arabia of potash, with more than a third of global supply. And Trump’s priority is to lower costs for inflation-weary consumers ahead of the midterms, just suspending tariffs on imports of up to 300,000 metric tons of ground beef to bring cheaper foreign meat into the market. As Eurasia Group founder Ian Bremmer told me over the weekend: “There’s still time to walk this back … Trump not taking a public victory lap makes last-minute resumption of talks possible.”

Canada is becoming more resilient. The Canadian government is diversifying trade, letting in companies like Chinese EV giant BYD, and can borrow money at 4.2% for 30 years while comparable U.S. Treasury yields have risen to 5.3%. As a dual citizen who often travels north of the border, though, I think the biggest shift is psychological. Canadians now see the U.S. as a greater threat to their security than Russia or China, according to a survey by Nanos Research Group. “Canadian opinion has turned largely on the direct attacks from Donald Trump,” founder and chief data scientist Nik Nanos told me yesterday. “At the same time, a very strong majority of Canadians want to have a trade deal.”

Just as the Luftwaffe’s bombing of London during the Blitz of 1940 strengthened British resolve in World War II, Washington’s repeated attacks on Canada have consolidated support for Prime Minister Mark Carney. Carney’s approval rating now hovers around 60%, while Trump’s approval rating has sunk to around 35%. From his fiery speech in Davos to his comments this weekend, the prime minister has turned each assault into a rallying cry. “America is trying to break us so that they can own us,” Carney said at a press conference on Saturday. “That will never, ever happen.”

This is a dumb trade war. From Florida tourism operators to automakers with integrated supply chains, most U.S. companies view Canada as a partner in prosperity. The Canadian American Business Council estimates the successful renegotiation of the United States-Mexico-Canada Agreement could create an additional 137,000 U.S. jobs and 98,000 Canadian jobs next year. Business Roundtable CEO Joshua Bolten issued a statement saying that “new tariffs and retaliation risk raising costs for American businesses and families.”

Canada used to be America’s best friend. Despite Trump’s claims, the world’s longest undefended border is not a pain point for illegal immigration, drug traffic or security threats. With bilateral cooperation, it’s the opposite. The economies remain intertwined, with the Gordie Howe International Bridge between Detroit and Windsor officially opening just days before the latest rift. U.S. officials weren’t invited. As one Canadian CEO told me recently: “In a dumb trade war, you eventually work out the trade but you never regain the trust.”

Contact CEO Daily via Diane Brady at diane.brady@fortune.com

Top leadership news

Women want ‘dads,’ not ‘duds’

Hardworking, highly-educated women may be concerned about the loss of autonomy that can accompany unequal child-rearing responsibilities, according to Claudia Goldin, a Nobel Prize-winning economic historian at Harvard. “The more that men can credibly signal they will be dependable ‘dads’ and not disappointing ‘duds,’ the more investment in women’s education and careers, and the higher will be the birthrate in the face of greater female agency,” she wrote in a recent working paper.  

Inside Walter’s sports empire and money machine

Mark Walter, controlling owner of the Los Angeles Dodgers, now faces scrutiny over the financial machinery behind his sports empire. A U.S. Securities and Exchange Commission is reportedly investigating whether financial firms tied to Walter improperly handled billions of dollars in loans from insurance companies also connected to him. Private equity and private credit are increasingly turning to insurers’ long-term capital to fund a broader range of transactions.

The Treasury’s ‘soft-form financial repression’

Markets are increasingly focused on whether policymakers will address the root causes of growing U.S. debt. Yet the U.S. Treasury Department’s recent interventions in the bond and currency markets suggest that officials are more focused on just managing the symptoms. “We see both the buyback and encouragement to use the FIMA facility for FX reserves as soft-form financial repression policies aimed at containing the long-end of the U.S. yield curve,” Deutsche Bank analysts argue, referring to the practice of trying to keep interest rates low by influencing financial markets.

The markets

S&P 500 futures are down 0.2% this morning. The last session rose 0.4%. South Korea’s KOSPI dropped 3.1%, Japan’s Nikkei 225 is down 0.7%, and Hong Kong’s Hang Seng Index dropped 1.9%. Mainland China’s CSI 300 is down 1.2%. Alibaba’s Hong Kong shares are down 8.5% after the Chinese tech company announced plans for a $10 billion share sale. Samsung Electronics also dropped 8.7% despite forecasting shareholder returns of $70 billion. India’s NIFTY 50 is down 0.3%, while the STOXX Europe 600 is flat in early trading. Bitcoin is hovering above $77,000.

Around the watercooler

Venezuela abandoning the bolivar and adopting the U.S. dollar would be the biggest currency switch since the advent of the euro, Hanke says by Jason Ma and Shawn Tully

American billionaires are showing off their farmland for elaborate hobbies, but a buying spree among the ultrarich risks pricing farmers out by Sasha Rogelberg

Powering the cloud after 60 years underground: Ormat’s geothermal pivot to AI by Jordan Blum

Meet the 18-year-old junk remover who vibe-coded his own pricing calculator and makes up to $15,000 a month by Nick Lichtenberg

Retired racer Jimmie Johnson credits his multimillion-dollar success to shining his shoes and arriving 10 minutes early: ‘Small things matter’ by Preston Fore

The AI boom is lifting economies across Asia. But for Southeast Asia, it might just be a ‘short-term blip’ by Angelica Ang

Today's edition of CEO Daily is curated and edited by Joseph Abrams, Jason Ma, Nicholas Gordon, and Lee Clifford.