Trump Threatens CUSMA — Canada & Mexico Reveal the Truth

Summary

In the lead-up to the July 2026 Kuzma review, the U.S. President's strategy of threatening Canada and Mexico with tariffs and withdrawal from trade agreements backfired. While the U.S. believed it held the upper hand, Canada and Mexico quietly built resilient trade networks and partnerships, bypassing U.S. control. By preparing strategically and forging alternatives, the two countries redefined power dynamics, demonstrating that leverage is built through foresight and preparation, not coercion. The narrative highlights the shift from U.S. dominance to a more balanced power structure, offering a powerful lesson in modern strategic thinking.

Takeaways

• 😀 Leverage is not solely about threats or tariffs; it is earned through exclusivity, control, and the absence of alternatives.
• 😀 Trump's attempt to use the Koozma sunset clause as leverage failed because it relied on the assumption that Canada and Mexico were powerless without the U.S.
• 😀 Power is not about threatening submission; it lies in creating alternatives and building resilience before a confrontation begins.
• 😀 While Trump saw tariffs and ultimatums as tools of coercion, Canada and Mexico were preparing alternatives, which made those threats irrelevant.
• 😀 The strategy of divide and conquer, a typical imperial tactic, failed when Canada and Mexico coordinated their response and aligned their trade policies.
• 😀 The true nature of power is structural, not performative. The countries with the foresight to build resilient systems are the ones with real power.
• 😀 By 2026, Canada and Mexico had already constructed networks of supply chains and partnerships that bypassed U.S. infrastructure, weakening U.S. control over North American trade.
• 😀 Trump misunderstood the importance of interdependence. U.S. companies depend on Canadian and Mexican supply chains, which meant that disrupting Kusma would harm U.S. businesses more than Canada or Mexico.
• 😀 True leverage comes not from the ability to coerce but from the ability to act independently, even while your adversary assumes control.
• 😀 The collapse of the Kusma agreement would harm American industries, not Canada or Mexico, because of the deep integration of supply chains across borders.
• 😀 The key takeaway is that power in the modern world is determined by preparation, foresight, and the construction of alternatives, rather than by coercive threats or tariffs.

Q & A

What was Trump's belief about the leverage he held over Canada and Mexico?

Trump believed that by using threats, such as imposing tariffs or withdrawing from Kusma, he could coerce Canada and Mexico into submission. He assumed that these countries, dependent on the U.S. market, would comply with his demands on defense spending, immigration, and critical minerals.

What was the fatal flaw in Trump's approach to leverage over Canada and Mexico?

The fatal flaw in Trump's strategy was assuming that Canada and Mexico were powerless without the U.S. He failed to recognize that true leverage is built on exclusivity, control, and alternatives, not just threats. Canada and Mexico were already preparing alternatives that would reduce their dependency on the U.S.

How did Canada and Mexico respond to Trump's threats and leverage?

Instead of cowering to Trump's threats, Canada and Mexico quietly built alternatives by forming strategic partnerships, redesigning supply chains, and creating new trade routes outside of U.S. control. These preparations significantly diminished the effectiveness of Trump's threats.

What is the 'Koozma sunset clause,' and how did Trump misuse it?

The Koozma sunset clause (article 34.7) required the three countries to meet every six years and decide whether to extend their trade agreement. Trump believed that by using this clause, he could force concessions from Canada and Mexico. However, he misjudged the situation, as Canada and Mexico had already begun building alternative trade networks that would render this clause ineffective.

What role did the strategy of 'divide and conquer' play in Trump's approach?

Trump attempted to use the strategy of divide and conquer, believing that by isolating Canada and Mexico and negotiating with them separately, he could extract maximum concessions. However, this strategy failed because Canada and Mexico were communicating, aligning, and preparing to negotiate as a coordinated bloc.

What strategic partnerships did Canada and Mexico form to counteract U.S. leverage?

In September 2025, Canada and Mexico launched a comprehensive strategic partnership that included integrated supply chains, joint production agreements, and direct trade routes bypassing U.S. infrastructure. These moves were aimed at reducing their dependency on the U.S. and securing autonomy in their trade relationships.

How did the American business community respond to Trump's trade policies?

American businesses, particularly those in manufacturing, agriculture, and technology, opposed Trump's plans to dismantle Kusma. They warned that tearing up the agreement would disrupt deeply integrated supply chains and harm U.S. industry. Their opposition added significant pressure to the negotiations.

What are the potential consequences of a collapse of Kusma for the U.S. economy?

If Kusma were to collapse, the immediate consequences would primarily affect U.S. industries, leading to disrupted supply chains, slower production, and higher costs. The U.S. would lose access to Canadian energy and Mexican manufacturing, and global competitors would take advantage of the uncertainty.

What was the central miscalculation made by Trump in his approach to power?

Trump's central miscalculation was assuming that the U.S. held all the power in North America. He believed that his threats and tariffs would coerce Canada and Mexico into compliance. However, he overlooked the fact that true power comes from creating alternatives and building resilience, not from using threats alone.

What lessons can be drawn from the power shift between the U.S., Canada, and Mexico?

The main lesson is that power is not determined by threats or size but by the ability to create viable alternatives, cultivate resilience, and act strategically before a confrontation occurs. Canada and Mexico’s preparation and coordination allowed them to negotiate from a position of strength, ultimately reshaping the balance of power in North America.