Heading into late summer, the picture across North America presents a study in contrasts. Domestically, political noise remains high, while overall economic growth is modest—hovering around 1.3% to 1.8% in Mexico and roughly 1.5% to 2.0% in the U.S..
Yet, underneath those sluggish headline numbers, consumer resilience and cross-border commercial ties are holding up surprisingly well, even as headline inflation remains stubbornly in the high-3% to 4% range on both sides of the border. It’s a slow-growth, sticky-cost environment, making the stability of our regional trade setup all the more vital as a real-time “pulse check” on North American economic health.
Late last week in Mexico City, Economy Minister Marcelo Ebrard and U.S. Trade Representative Jamieson Greer wrapped up the latest round of US-Mexico/USMCA talks. Following Washington’s decision earlier this month to forgo an automatic 16-year extension, these sessions have taken on a different weight. Yet, the atmosphere was notably constructive. Ambassador Greer went so far as to publicly acknowledge “many successes” and real momentum on resolving trade barriers—a welcome break from the posturing some had feared.
By whittling down a sprawling list of friction points to a core set of priorities, negotiators made tangible headway on steel, aluminum, and transshipment safeguards. In fact, there is a growing sense that both sides would like to have sector-specific interim agreements before the end of the year. While a full trilateral pact may not formally crystalize until after 2027, these interim deals could serve as the crucial anchors that keep capital moving and markets stable in the near term.
The real test, however, comes in the fall. Both sides have set a fourth round for September in Washington, where automotive rules of origin will take center stage. Meanwhile, the Ottawa track is beginning to thaw. Following a recent exchange between Donald Trump and Canadian Prime Minister Mark Carney—where Carney signaled a willingness to negotiate around “Fortress North America” industrial alignment—there is a sense that Ottawa, too, will be negotiating in earnest before year’s end.
Adding another layer to the landscape is Washington’s recent rollout of Section 301 forced-labor tariffs. For both Mexico and Canada, the 10% rate comes with a crucial silver lining: USMCA-compliant exports remain fully exempt. As pending excess-capacity measures take effect, this regional carve-out actually strengthens North America’s relative competitive standing against non-treaty global peers.
We aren’t heading toward a cliff, but rather a protracted, rolling negotiation. A complete trilateral package will take time, but incremental bilateral wins are keeping supply chains intact, preserving our shared competitive edge and helping to manage the attendant uncertainty.
Beyond North America, yesterday’s convergence of key international leaders in Washington for Senator Lindsey Graham’s funeral—including Presidents Zelenskyy and Prime Minister Netanyahu—underscores how closely linked the conflicts in Ukraine and the Middle East remain. To cut through the political noise and track the fast-moving tactical developments in both regions, I regularly rely on the daily assessments from the Institute for the Study of War.
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The views expressed here are solely my personal opinions and do not constitute legal advice from, or on behalf of, the firm.
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