2026 blew in at a dizzying pace, headlined by the “tale of two speeches” at Davos which underscored a profound reordering of global alliances and confirmation that we can no longer rely on the predictability of the past.
This February marks 4 full years since Vladimir Putin first invaded Ukraine. While Russia held its ground in 2025, Moscow did not make any meaningful territorial breakthroughs last year, and Putin is now facing added signs of economic strain back at home. Even so, the situation in Ukraine seems to have reached a critical inflection point, with the U.S.’s peace through pressure approach feeling ever heavier on Kyiv.
Earlier this week, Secretary of State Marco Rubio attended the security summit in Munich where he signaled a desire for a strong NATO, referring to the U.S. as a “child of Europe” and the Trans-Atlantic Alliance as one defined by reciprocity. Despite Rubio’s shift in tone, NATO’s future remains uncertain with the possibility of a fragmented European security architecture no longer solely a theoretical exercise, and the vulnerability of the continent each day more apparent.
In the Middle East, Israel has largely transitioned from active combat to, presumably, a development phase. With Hamas’s command structure effectively dismantled, regional security is now pivoting toward the Board of Peace – the Trump-backed international body self-tasked with Gaza’s demilitarization and reconstruction. However, this stability remains fragile as the U.S. intensifies its “maximum pressure” strategy on Iran. Between ongoing protests and violent crackdowns by the Iranian government and the White House’s renewed talks to thwart Tehran’s nuclear ambitions, the Middle East finds itself at a familiar juncture, teetering somewhere between a negotiated peace and conflict escalation.
President Trump’s maximalist stance toward Beijing has met a sobering reality; U.S. dependency on Chinese critical minerals has forced the U.S. administration to retreat from its aggressive decoupling rhetoric and deal with the reality of economic interdependence. In early February, U.S. Vice President JD Vance announced a critical minerals trade bloc, an attempt to counter China’s dominance in the sector. With an anticipated April summit between Presidents Trump and Xi, the U.S. also shelved a number of key tech security measures. The expected outcomes to the upcoming bilateral meeting suggest quiet wins in technical areas and mineral-sharing frameworks rather than a grand bargain.
In the Western Hemisphere, we are seeing the most dramatic shift in a generation. Secretary of Energy Chris Wright’s recent high-level visit to Caracas – the first by a U.S. Cabinet member in over 25 years – signals a significant pivot toward energy realism following the U.S.-imposed shift in Venezuelan leadership earlier this year. While the legal status of the new interim government remains a subject of debate, the movement toward de-facto diplomatic recognition driven by oil and gas interests is undeniable, with the potential of Cuba following now on the region’s mind.
Closer to home, the mood on trade is evolving. Despite President Trump’s aggressive posture, Congress has begun to signal aims to reclaim its authority over tariffs and trade policy. Today’s Supreme Court decision on the striking down Trump’s IEEPA-based emergency tariffs has a number of practical implications. Meanwhile, a recent study from the New York Fed found that U.S. firms and consumers bore nearly 90% of the tariffs implemented in 2025. And polling suggests that affordability and the economy stand as the top-tier issues going into the U.S. midterm election cycle.
In the midst of these global flashpoints, the North American trade bloc also finds itself on unsteady ground. In the leadup to this year’s USMCA process, President Trump has characteristically mused about whether the USMCA is even necessary, an extreme starting point typical of his negotiating style. However, the U.S. Senate Finance Committee hearings, held on February 12, reaffirmed strong bipartisan support for the agreement. Despite support, key friction points remain, including demands for tighter automotive rules of origin, stricter Mexican labor enforcement, and modernized digital trade rules for AI.
Last month’s U.S. Trade Representative report formally initiated the mandated USMCA review process, and political theater already abounds. In early February, President Trump threatened to block the imminent opening of the Gordie Howe International Bridge over the Detroit River until Canada meets the U.S. administration’s new ownership demands. Meanwhile, though Mexico’s President Claudia Sheinbaum has backed down from supplying oil to Cuba, she has continued to emphasize the need to send humanitarian aid to countries in need – including Cuba. Both these incidents elevate the risk of retaliatory actions that could spill over into wider North American tensions.
USMCA renewal is imperative for the U.S. economy and North America. Currently, the pact underpins nearly $2 trillion in annual goods & services and supports 13 million American jobs. Over 60% of U.S. imports are also facilitated by the agreement, and Canada and Mexico purchase about 30% of all U.S. agricultural exports. Maintaining this regional bloc is the best remedy against a tightening U.S. domestic labor market, economic uncertainty, and the fiscal drag of the U.S.’s $1.9 trillion deficit.
The social and economic vitality of the U.S., Mexico, and Canada is North America’s primary shield against global volatility. Strengthening our shared region should not be viewed solely as a worthy policy objective, it is a necessity for survival in a fragmented world.
I look forward to hearing from you and hope you’ll write, or simply stay in touch via Twitter, LinkedIn or Facebook.
Sincerely,
Antonio Garza
The views expressed here are solely my personal opinions and do not constitute legal advice from, or on behalf of, the firm.