Franklin Thomas Welles 🇺🇲

The missing aspect in all USMCA/CUSMA trade discussions is the simple fact that President Trump and U.S. Trade Ambassador Jamieson Greer would prefer bilateral trade agreements.  The reason is simple and is highlighted in all the problems with the three-party USMCA. Two countries can negotiate based on their individual interests; multiple country assemblies get complicated.  Canadian Prime Minister Mark Carney and his “middle power” strategy of multiple interests assembling to create larger influence simply doesn’t work in trade discussion. That’s the bottom line. Mexico has played this very well.  Mexican President Claudia Sheinbaum has not participated in any antagonisms toward the U.S. position; they are simply negotiating for their best outcome.  The Mexican government officials don’t try to hide their U.S. dependency under the misguided premise of patriotism.  They understand the nature of the relationship. If President Sheinbaum wants to keep a strong economy, she needs the USA.  Both leaders want a trade agreement - it’s business beyond politics.  Canada on the other hand is playing pure politics and trying to carve out a deal for themselves the rest of the world doesn’t have.  Canada wants to be excluded from the baseline tariffs applied to everyone, that’s not going to happen. Canada believes they can negotiate a deal that removes the section 232 steel and aluminum tariffs, as well as eliminate the baseline tariffs.  That is not going to happen. When announcing the baseline tariffs last year President Trump specifically said all trade relationships would change. The US informed all of its trading partners it was changing the trading relationship, with the U.S imposing a base line tariff on all imports into the US. The reasons were simple. The U.S wants to raise revenue to address the deficit and debt; and Trump is facilitating the reshoring of manufacturing in key sectors of the economy. Mexico understands this and can see the value in a strong American economy lifting up the Mexican economy; Canada, filled with hubris, does not share that same outlook. Mark Carney, on behalf of his British Commonwealth interests, wants to control the expansion of the American economy. Two entirely different approaches, and as a result the bilateral strategy with two separate trade agreements becomes a self-fulfilling prophecy. We have watched this dynamic play out for almost two years, and we watched the original framework constructed in 2017 and 2018 before that.  I am often asked when we will see the ultimate trigger to eliminate the trilateral complexity thereby setting Canada on the path to economic contraction.  My answer today is the same as it was two years ago. We will see the Trilateral USMCA termination notice after the United States and Mexico successfully conclude the Bilateral free trade agreement. Prime Minister Mark Carney has tried to influence Mexico by requesting President Sheinbaum not negotiate with the U.S. bilaterally.  However, Sheinbaum is looking at the reality of the situation and unwilling to put her nation through the economic chaos that Carney has created. Mark Carney and his trade Minister Dominic LeBlanc have lied to the Canadian people.  The Canadian government is playing politics.  Claudia Sheinbaum and Marcelo Ebrand have been honest with the Mexican people.  Mexico is focused on the economics. Things are proceeding exactly as we would expect. In the bigger picture, Mexico wall be under the “Shield of the Americas” both economically and with national security. Canada has hitched their wagon to Europe. Prepare your financial affairs accordingly.