Investors and businesses across North America are navigating three risks at once: tariff costs, the continued closure of the Strait of Hormuz, and the threat of a CUSMA withdrawal. On the surface, that looks grim... But a clearer picture is emerging from people closer to the negotiation than the press coverage suggests.

The most important thing being reported from those rooms is that Carney and Trump have a genuine working rapport and communicate directly with some regularity. That's not the relationship being portrayed on television, and the gap is deliberate on the American side. Two-sided relationships on a basic level are, ironically, the most reliable leading indicator of where a negotiation lands. And this one is in better shape than consensus currently reflects.

Canada also appears to be faring worse than Mexico in this negotiation, however there is a convincing explanation. Mexico has roughly ~50 discrete issues to resolve; Canada has just seven. More issues mean more visible negotiations and more headline momentum, which is exactly what we have seen from President Sheinbaum. Canada's narrower mandate makes progress harder to narrate publicly, even when the underlying negotiation is on track.

The July 1 deadline is also not the "cliff" it is being framed as. If the parties do not confirm a 16-year extension, the agreement enters annual reviews and stays in force through 2036. The real headline risk is a formal six-month withdrawal notice filed on or around July 1. Watch for that, not the noise around it.

Expect a noisy June and a volatile summer. Trump will call the agreement irrelevant, fake news, and the "worst deal in the history of deals" in public while maintaining its tariff exemption architecture in practice. For Trump, the turbulence is the strategy, not the desired outcome. In my view, this agreement survives this administration. It could be a hot summer, but cooler heads will prevail.

Sources: https://www.trade.gov/usmca