Trump 2.0 Global Policies Extend Volatility in 2026
We are only two weeks into 2026 and U.S. President Trump has made his agenda clear. “America First” remains the key driver of his 2026 foreign policy. His unilateral approach emphasizes U.S. sovereignty, economic leverage, and military strength to assert U.S. dominance in the Western Hemisphere. The arrest and extradition of Nicolas Maduro and his wife, as well as threats against Colombia’s president, Iran, and Greenland, all show a sharp focus on diminishing the China/Russia/Iran influence in the hemisphere.
Trump appears to view China as the primary long-term rival. He will travel to Beijing in April. His efforts in Venezuela are reported to put China on notice of their heavy investment activity in Latin America. Taiwan remains a key irritant of friction between the two as well.
Thus far Trump has withdrawn from 66 international organizations and treaties deemed “globalist” including the World Health Organization, UN Committees, and a host of climate accords.
Trump’s unilateral approach lends to more trade friction as countries position for protectionism. Expect volatility.
U.S. – Canada – Mexico Deal up for Review
One of the world’s largest free trade zones, covering a market of over 500 million people and representing about 30% of global GDP (with combined nominal GDP around $30+ trillion). Intra-regional trade in goods and services has grown significantly, reaching nearly $2 trillion annually in recent years.
- $18.5 billion in meat and livestock trade among the three nations.
- Biggest flows: Canada beef to the U.S. at $2.9 billion, U.S. pork to Mexico at $2.6 billion
- Reworked from NAFTA in Trump’s first term, signed in July 2020
- Mandatory review by July 2026; Up for renewal in 2036
- Prior revision from NAFTA: Greater U.S. access to Canada’s dairy market (tariff-free quotas expanded)
Key factors to watch in the 2026 USMCA Review
U.S. dairy access to Canada. Trump has been vocal and frustrated by the quotas. Canada’s “Supply Management” system necessitates import quotas. Can they appease by expanding quotas again, or does the Supply Management system come under fire?
Automotive rules of origin. The current threshold for duty-free access requires 75% value sourcing from the bloc.
Mercosur – EU Inches Forward
This deal would eliminate tariffs on 92% of all trade between 5 South American Nations (Argentina, Brazil, Paraguay, and Uruguay, Bolivia) and the EU trade bloc, a combined 780 million people. The deal has been under negotiation for 25 years, facing delays mainly relating to agriculture, as EU farmers fear South American competition.
On January 9th, the EU council approved the agreements by a qualified majority. This sets up a signing ceremony on January 17th in Paraguay. HOWEVER, the deal is NOT YET IN FORCE. It requires full ratification by all EU member states individually. That will be a BIG hurdle.
Meat and soybeans remain the key irritants to farmers across the EU, mainly in France, Poland, Ireland, Germany, and the Netherlands. Deforestation claims have fueled opposition. Ratification could take months, and more likely, years. With recent EU efforts toward climate goals and animal welfare standards, the day will come that they will need to consider meat imports. That may be years away, but Brazil and the gang are poised to be key suppliers when it arrives.
~Brett Stuart