I’ve said it before, U.S. Ambassador to Canada Pete Hoekstra is the most underpaid U.S. emissary sent to a hostile nation and constantly surrounded by threats, bitterness, anger and hatred.

It would be easier to be U.S. ambassador to North Korea.

There is so much nuance inside this interview, it is remarkable.

Ambassador Hoekstra tries in his best diplomatic form to tell the two Canadians Michael LeBlanc and Dr. Sylvain Charlebois about the underlying nature of the U.S-Canada trade conflicts.  However, in typical Canadian fashion both indoctrinated interviewers are curiously stumped by the points Hoekstra presents.  I am prompting this one because you also need to see the body/facial language. WATCH:

[SIDENOTE: The Canadians needed to turn off the comments on YouTube because Canadians are angry, bitter, abusive, vulgar and nasty in every comment section on the subject of U.S-Canada relations.]

Canada’s greatest strategic weakness is what Canadians call their greatest strength, pride.

There is a big difference between being proud and being prideful. The Canadian worldview is based on the latter.

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Appealing almost entirely to an audience that doesn’t recognize the issues that really matter, Fox News has the opportunity to discuss U.S. trade policy with Jamieson Greer yet flubs the entire interview.

Instead of asking about the USMCA withdrawal announcement and the ongoing trade discussions with Mexico, the Fox News pundits misdirect Greer’s expertise and ask questions about the jobs report, the Federal Reserve and the Democrat Socialists of America in elections.  Seriously, no joke.

When serious people remark that Fox News is nothing except propaganda for out of touch ‘boomers’ (a pejorative), this Fox News interview is a case study in why many people now hold that opinion. It’s difficult to argue they’re wrong.

That said, within the one minute where trade was actually discussed, USTR Jamieson Greer points out that many Democrats and many Republicans are completely in favor of eliminating the USTR and resetting the baseline of North American trade.  This is a key point, because within the economic policy issues the left-right dynamic should not be the prism that matters.  Remember, MAGA and the Bernie Bros agreed on 80% of the economic problem. WATCH:

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U.S. Trade Representative Jamieson Greer has made it official.  Delivering an official statement today following a discussion between the United States, Mexico and Canada, USTR Jamieson Greer informed the group the USA will not be renewing the USMCA trilateral trade agreement. [SOURCE]

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Unfortunately, yet predictably given how much false information has been pushed on this issue, the Canadian team will now believe they have a period of ten consecutive years of negotiation before the trade deal is over.  This is structurally and completely false.  The Canadian media will likely continue selling this false hope.

In reality, with the non-renewal announcement now made, President Trump and USTR Greer can now complete the bilateral trade discussions with Mexico (noted in the announcement) and then move to stage two.

Stage two will be the United States announcing a complete withdrawal from the USMCA, which triggers a six-month countdown clock.   The formal notification of withdrawal will likely happen once the U.S. and Mexico complete the bilateral free trade agreement.

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The Canadian dollar is starting to feel the effects of long-term uncertainty. It will get worse.

...”Since the start of June, the currency has weakened 2.9%, which would be its steepest monthly decline since October 2024, as Canadian bond yields fell further below U.S. yields.”… {source}

Now, this is where you really need to pay attention to details.  Remember, the U.K and EU have a vested interest in protecting Canada from economic collapse.

President Trump doesn’t want immediate collapse either -because Xi will move in fast- but Trump is not going to provide the same financial and economic lifelines that the other four-eyes will trigger.

Reuters is reporting that tomorrow the U.S. will formally declare a “non-extension” of the USMCA trade agreement {ARTICLE} and that triggers a 10-year period to decoupling.  It is very important to understand there is a difference between announcing a “non-extension” and announcing a “withdrawal“.  The Canadians are completely confused about what is about to happen.

In a non-extension announcement, the USA is saying they do not want to extend or renew the terms of the agreement beyond the current trade agreement terms.  Yes, this is a 10-year exit.  However, that’s not the part that matters.  Announcing a decision to exit the USMCA (CUSMA), a full withdrawal from the trilateral deal, triggers a six-month countdown to exit.

The deadline to announce the decision to extend is tomorrow, July 1st.  There is no deadline on the timeline to announce an exit or withdrawal from the USMCA. That announcement can happen at any time.

Put simply, announcing a non-renewal is a 10-year exit.  Announcing a withdrawal is a 6-month exit.  The announcement to withdraw can come at any time after the statement of non-renewal.

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You might remember recent reports outlining how the economy of Canada has slipped into a recession, posting two consecutive quarters with a negative GDP outcome.  There are multiple reasons for this shrinkage, but the dominant factor is, well, quite frankly, Canadian politics and economic policy.

Meanwhile, in Mexico the opposite is happening.  Mexico’s economic activity grew 1.2% in April from the prior month, the national statistics agency said, compared with a revised increase of 0.6% in March and beating a forecast of a 0.9% increase in a Reuters poll of analysts. {source}

It is not coincidental to see the Mexican economy performing well, while the Canadian economy is contracting.  Despite their identical proximity to The United States, each nation is currently executing a fundamentally different set of economic policies.

The Canadian government has been exceptionally combative with the U.S.A, leading to friction, tariffs and economic back-and-forth measures between the two nations.

The Mexican government has expressly understood the nature of their dependency, admitted it, taken no action to diminish it, and purposefully set out to align itself with the interests of America.

Canada is combative. Mexico is collaborating.

It seems unlikely that the three nations can agree on major economic policies, as a trilateral partnership would need alignment in core areas like energy policy. Canada’s energy policy is fundamentally separate from those of the U.S. and Mexico, and this is an issue that can’t be resolved through a trade agreement alone.

A large part of Mexico’s economy relies on remittances from Mexican workers in the U.S. sending money back to their families. As long as the U.S. job market stays strong—and it’s only getting stronger in the industries where many Mexicans work—Mexico will continue to benefit from America’s economic growth.

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Multiple countries have proposed ‘digital service taxes’ which are taxes on the domestic use of American tech platforms like META, Twitter, Amazon etc.  EU countries are planning to tax U.S. based tech platforms for the revenues generated by operations within EU countries.

President Trump announces retaliatory action via reciprocity taxes, in essence leveraging the entirety of the U.S. consumer market, if the EU proceed with this new tax revenue scheme against U.S. companies.   Canada was on the cusp of a digital services tax last year when Trump made a similar announcement forcing Canada to abandon the plan.

[SOURCE]

WASHINGTON DC – […] Trump’s promise to raise tariffs threatens to complicate trade talks with the European Union. Trump’s threat comes one day after EU member states approved an agreement that would slash tariffs on U.S. industrial goods and some agricultural products. In return, the U.S. would cap most tariffs on the European Union at 15 percent.

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At The Economic Club of New York’s gala marking America’s 250th anniversary, Treasury Secretary Scott Bessent unveils a five-pillar framework for “economic statecraft” — tying trade, supply chains, and financial leadership directly to national security. WATCH:

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I have a half-day of travel that takes me offline until later today; however, President Trump is scheduled to deliver remarks on the economy today in the Lehigh Valley area of Pennsylvania.

President Donald Trump will deliver a speech during his visit to the Mack Trucks manufacturing plant in Lower Macungie Township.  The event is scheduled for 2:00pm ET with livestream links below.

UPDATE: VIDEO ADDED

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President Donald Trump gives an extensive interview to Axios on current events, the comparison between Term 1 and Term 2, and the issues surrounding the ceasefire agreement with Iran.

The conversation centers on Iran, where Trump defends the military campaign, the deal that followed and his decision to stop short of further escalation. He also discusses the Strait of Hormuz, Israel and Benjamin Netanyahu, Cuba, Venezuela, artificial intelligence, Anthropic, China’s AI race and how he thinks about maintaining power in the final stretch of his presidency.

CHAPTERS:

0:00 – Welcome to The Axios Show
0:11 – The one big thing: power
1:37 – “I’m the boss” and the G7
3:36 – What Trump sees in world leaders
4:05 – Trump on Xi Jinping and China
6:11 – Venezuela, military power and oil
7:19 – Trump on Modi, Pakistan and global leadership

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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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