Most of MAGA will miss this one.

“There are trillions at stake.”

Three months ago, a certain Democrat Senator from Arizona wrote a letter to President Donald Trump and USTR Jamieson Greer asking them to either radically modify or dissolve the USMCA trade agreement {LETTER HERE}.

I said at the time (March 2026), he was putting a target directly on his back – that a certain ‘seven ways from Sunday group’ would now acquire. Well, look at what happens:

[STORY HERE]

Whenever a Democrat is targeted by democrat IC operations, there’s always something else behind the effort.

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President Trump is navigating a narrow path through a minefield of foreign and domestic opposition to his preferred trade position on the USMCA. Ironically, or not, on the issue of ending the USMCA we likely have more allies in the labor unions and Bernie Bros than we do amid the congressional republicans.

President Trump was asked again today about his position on the USMCA against the backdrop of a hot-mic moment when Canadian Prime Minister Mark Carney was telling him about caps on Chinese EVs coming into Canada. [Prompted]

“I would rather not have the USMCA. The primary reason I wanted it was because there was no way out of NAFTA, which was the worst trade agreement ever made — like, ever — and they had no termination… I would prefer not having an agreement, but I’m open to doing it.”

Several desperate Canadian trade watchers have framed President Trump’s “that’s good” response to Carney as if Trump was approving of the Chinese EV deal.  Again, folks are just not looking at Trump’s position through the correct lens.

Trump doesn’t care about the issue. Trump is ambivalent to the issue. It’s the same mindset Trump has carried throughout all questions and comments since the questions were first raised.

The reason for Trump’s ambivalence about the granular, sectoral questions is simply because in the big picture of Trump’s outlook, he doesn’t plan on staying in a trilateral trade deal.  Any bilateral trade deal Canada makes with a trade partner is perfectly okay, because Canada is not going to be connected to the USA in a trilateral obligation.

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Watching U.S. Ambassador to Canada Pete Hoekstra discussing current U.S-Canada trade dynamics is to be witnessing one man behind enemy lines trying to explain a situation the audience cannot fathom. It really is remarkable.

The longer he is assigned to this almost hopeless task, the more he develops an ‘I don’t give a damn‘ attitude, regardless of the audience size. It’s completely understandable.

The Canadian government controls the information available to the entire country. The Canadian media push that skewed information to the entire country. Then there’s Ambassador Hoekstra; the guy with completely different information, trying against all odds to present a viewpoint that is so fundamentally different the audience cannot grasp it.

In this video segment all of the dynamics come into play, but that’s not the real value in this capture. WATCH:

What I would recommend to all those who have followed this genuinely bizarre disassociation topic, is to go to YouTube and read the comments underneath this CTV video – GO HERE.

I love and respect our Canadian Treepers who are here with us in the CTH branches of discussion.  I cannot fathom what it must be like to live in Canada amid this level of social, cognitive dissonance.  You have my utmost respect and sympathy.

Within all of the Canadian free trade agreements (FTAs), regardless of nation, there is something called a baseline memorandum of understanding (MOU). That MOU outlines how the trade agreement for goods sold into Canada are contingent upon Canada retaining access to the U.S. market.  When the USMCA is dissolved, almost every single FTA organized by the Canadian government that matters, collapses.  Canadians have no concept of what is coming.

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It is not shocking to us.  It is not shocking to anyone who has followed this story for the past few years.  It is particularly not shocking to you.   However, the Canadians are going bananas right now.

President Donald Trump responded to a question about the current status of the USMCA trade agreement, or what Canada calls CUSMA.  Watch and listen to how President Trump points out that he has no intention of renewing the USMCA.

This has been obvious since May of 2025 {GO DEEP}.

I don’t want to say ‘I toldya so’, but…. Video prompted to 37:55:

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A rather ironic sequence of events as Canada formally requests to renew the USMCA (CUSMA) trade agreement for 16-years, followed a day later by the U.S. announcing additional tariffs toward 60 countries including Canada.

On Tuesday, Dominic LeBlanc, the trade minister from Canada assigned to USMCA negotiations, traveled to Washington DC for a meeting with U.S. Trade Representative Jamieson Greer.

LeBlanc, reflecting the obtuse nature the Canadian trade delegation is now well known for, seemed oblivious to the friction points in the U.S. position and formally requested the trade deal be renewed for another 16 years. {Citation}

LeBlanc called the agreement “highly beneficial” to all three countries. From the Canadian position this may be true, but that’s not even remotely what the U.S. team has presented in private and public comments.

Additionally, over the past two weeks the shift in Canadian strategy has become clearer.   While Carney’s administration previously seemed to be targeting Democrats in the U.S. congress to support retaining a trade agreement with Canada, that approach ended abruptly after several key Democrat senators began taking the position of influential U.S. labor unions who want the deal scrapped.  Canada now seems to be relying on pressure from the U.S. Chamber of Commerce and corporate republicans to support their position.

The day after news reports of Dominic LeBlanc’s expressed position, USTR Greer announced a new round of 301 tariffs against 60 countries who participate in third-party trade agreements with countries who use forced labor. {Citation} Suddenly, Canada’s embrace of China becomes even more serious.

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The continual message from President Trump to President Claudia Sheinbaum has been clear, ‘clean it up or possibly we will’, as Trump has publicly and repeatedly said Sheinbaum and the Mexican government were under the control of Mexican cartels.

Following the daring capture of Venezuela dictator Nicholas Maduro, Mexican President Sheinbaum took notice.  In the past few months dozens of government officials and cartel members have been targeted, arrested, indicted, extradited and removed from positions of influence.

Today, Mexican Security Minister Omar García Harfuch announced the arrest of Cuautla Mayor Jesús Corona Damián (pictured left).

(Bloomberg) — Mexican authorities detained the mayor of a historic city near the capital, the latest move designed to show the government is rooting out corrupt politicians from its ranks.

Cuautla Mayor Jesús Corona Damián was arrested Saturday, Security Minister Omar García Harfuch wrote in a post on social media platform X. An arrest warrant had been issued by the general prosecutor’s office on May 20.

Corona was on the run in recent days, after the security ministry announced in May the arrests of other top officials in Morelos State. The moves are part of a broader operation under President Claudia Sheinbaum, who took office in 2024 with an anti-corruption message, to nab dozens of politicians taking part in extortion scams and with alleged ties to broader crime rackets.

“With this operation, more than 85 officials and former officials have been detained, including seven mayors currently in office,” García Harfuch said on X. “The government of Mexico maintains a policy of zero impunity regarding any links between authorities and criminal groups.”

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Remember last weekend when we outlined how the sudden sense of urgency from Europe toward a trade agreement with Mexico? that agreement had little to do with purchasing row crops from Mexico, and everything to do with what Europe needs as access to the United States {Go Deep}.

The language being used by the United States trade office is specific. [SEE HERE] The first bilateral round of negotiations between the United States and Mexico for the USMCA free trade agreement has concluded. (Emphasis mine)

PRESS RELEASE – “MEXICO CITY — “Today, the United States and Mexico concluded the first bilateral round related to the Joint Review of the United States-Mexico-Canada Agreement (USMCA).

The United States concluded discussions with the goals of reducing the trade deficit with Mexico and strengthening American supply chains. During this first round, negotiators discussed priority issues related to automotive rules of origin, steel and aluminum, and economic security.

The United States and Mexico recognize the importance of advancing cooperation to enhance regulatory compatibility to strengthen sectors, including medical devices, pharmaceuticals, cosmetic products, and others.

We will continue advancing these discussions on June 16-17 in Washington, D.C., in addition to agriculture and a level playing field. The third round will be held during the week of July 20 in Mexico City.

The United States continues to emphasize the importance of ensuring the Agreement benefits U.S. manufacturers, farmers, ranchers, workers, service suppliers, and businesses of all sizes, and of addressing free-riding from third countries.” (source)

Currently, European automakers have billions invested in Mexican auto plants.  Much of the component material for those vehicles comes from Europe for assembly in Mexico.  That was the primary focus of the Europeans in their trade agreement with Mexico.

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The technical definition of a “recession” is two consecutive quarters of negative GDP growth. The 4th quarter of 2025 and 1st quarter of 2026 have identified exactly that problem, negative GDP growth in Canada. [-1% and -0.1% respectively] The pretending is fierce, and again CTH warns everyone to be careful about exposure to the Canadian sector in their investment holdings.

As customary, whenever the economic policy of a political leftist delivers a bad outcome, the media contort themselves in order to avoid defining the situation accurately.  Instead, the financial media project -without merit- that the current situation is more positive.  Unfortunately, the data doesn’t provide much room to arbitrarily change the definitions.

Keep in mind this announcement today comes on the heels of the Bank of Canada warning that a “cascading series of events could cause a sharp loss of investor confidence and lead to a spike in demand for liquidity or rapid asset sales.”  This is a particularly pertinent phrase given one of the common reasons being attributed to the negative GDP, increased import values – specifically Canadians purchasing gold.

Several financial outlets have noted the increase in the value of Canadian imports, a negative in the GDP calculation, is being driven by Canadians (institutions and individuals) purchasing gold as a hedge.  The Canadians are buying gold as a hedge against both inflation and currency devaluation.

This activity puts additional context onto the statements from the Bank of Canada, who would likely have advanced notice of this issue.  Hence, the Bank of Canada also saying, “In normal times, hedge fund activity helps keep markets running smoothly. But if conditions become strained, this activity could amplify stress and disrupt core funding markets.”  The Wall Street Journal:

WSJ – OTTAWA — Canada’s economy unexpectedly shrank for a second consecutive quarter as activity stalled at the start of the year, raising the likelihood the country dipped into a recession.

Gross domestic product, a broad measure of goods and services produced across Canada, edged down 0.1% in seasonally adjusted annualized terms in the January-to-March period, Statistics Canada said Friday.

The economy also contracted a larger-than-previously-estimated 1% in the final quarter of last year. Back-to-back quarterly declines typically define a technical recession.

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…”A cascading series of events could cause a sharp loss of investor confidence and lead to a spike in demand for liquidity or rapid asset sales”…

That’s a diplomatic way for the Bank of Canada to say the current financial situation in Canada is tenuously at risk, if the economic relationship with the United States severs as a result USMCA points of conflict becoming irreconcilable.  An interesting statement against the backdrop of Prime Minister Mark Carney having just visited New York making a pitch to American investors {citation}.

The Bank of Canada released their 2026 Financial Stability Report {see pdf here}, and Senior Deputy Governor Carolyn Rogers and Deputy Governor Toni Gravelle delivered remarks today about the analysis.  I’ve prompted the video below to the point of interest, as well as the transcript for the portion being highlighted [7:12 to 9:15].  WATCH:

[Transcript]  – […] “However, vulnerabilities have increased in some parts of the system. Stock and corporate debt valuations have risen and are high relative to historical norms. This makes markets more vulnerable to a sharp correction.

The issuance of global sovereign debt is also rising, and hedge funds are playing a bigger role in buying that debt, often using borrowed money. In normal times, hedge fund activity helps keep markets running smoothly. But if conditions become strained, this activity could amplify stress and disrupt core funding markets.

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I never quite understood just how controlled the information flow is inside Canada until about two years ago when we began closely monitoring Canadian positioning for the upcoming USMCA (CUSMA) renegotiation/cancellation.  It quickly became obvious the majority of Canadians have no idea why it is almost a certainty the U.S. would exit the trilateral arrangement and position for a bilateral free trade agreement.

In the two years that have passed, now we see a few Canadians starting to realize the core issues of trade conflict that make any FTA between the U.S. and Canada almost impossible.  The largest issue centers around Canada’s net-zero carbon legislation that now completely disconnects them from aligned North American energy policy between the U.S. and Mexico.

A trilateral agreement requires core alignment on industrial manufacturing, and that requires similar abilities & similar energy policy.  You cannot make steel, iron and aluminum without coal and gas.  You need joules for heavy industrial manufacturing that cannot be achieved without exploiting coal, gas or oil (carbon materials).  Canada’s energy policy no longer aligns with industrial manufacturing. This core issue cannot be resolved at the current level of energy policy in Canada.

There are other issues like Canadian trade deals with China, non-tariff barriers, legislated rules over intellectual property and other points of significant friction that make alignment within North America challenging. However, the energy component makes compatible trade impossible.

In the interview below, U.S. Ambassador to Canada Pete Hoekstra appears on a podcast with David Leis, for a blunt conversation about trade, pipelines, critical minerals, China, and why the U.S. is growing frustrated with Canada’s direction.  At the end Hoekstra even explains why he is doing Canadian podcasts; because information within Canada is restricted by the government control of media – and that explains why most Canadians are clueless about the issues.

I’ve prompted the interview to the point that gets into the details. If you are interested to be fully understanding of what is coming, this is a solid reference point. Also, if you have financial investments associated with Canada or any system that is connected to the economic relationship between the U.S. and Canada, you need to watch this interview to proactively defend your financial interests.  VIDEO PROMPTED:

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Watch it or listen to this roughly 30 minutes (prompted) as you cook, drive or go about your day. But listen to it and see the disconnect between Canada and the USA as outlined.  Things are going to get much worse in this relationship as the finality of it all suddenly starts to sink in north of the border with the average Canadian.

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