North America, composed of Mexico, the United States, and Canada, represents an interconnected economic and geopolitical region, with a combined GDP exceeding $30 trillion and a key trade agreement in place: the USMCA (T-MEC). As of August 2025, the region faces mounting tensions triggered by the protectionist policies of the United States under the renewed leadership of President Donald Trump, who returned to office in January 2025 after winning the 2024 elections. These tensions have manifested in the form of tariffs against Mexico and Canada, amplifying internal challenges such as inflation, migration, and security.
1. United States
Current Political Situation:
Donald Trump serves as the 47th president (second non-consecutive term), with JD Vance as vice president. His administration emphasizes “America First” policies through executive orders on immigration, global health, and trade tariffs. Trump’s approval rating is moderate (around 40–45%, according to Gallup), and recent polls show a shift toward Democratic identification in the second quarter of 2025. Congress remains divided, with ongoing debates about the debt ceiling and budget cuts.
Internal Challenges:
Key domestic issues include inflation and affordability (34% of voters’ top concern, according to Harvard CAPS/Harris Poll), followed by the budget deficit (57%), poverty (53%), and political polarization. Over 53% of Americans believe Trump is worsening government functionality. Other critical issues include climate change, the national debt (now over $36 trillion), and long-term fiscal health. Forecasts point to a year of political conflict and economic instability.
External Challenges:
The U.S. faces increasing friction with a coalition of adversaries: China, Russia, North Korea, and Iran. Ongoing conflicts in Ukraine and the Middle East add pressure, and fears rise over global tariffs reducing trade volume. Trump’s foreign policy includes cartel designations for Latin American organizations and growing tensions with Brazil. Over 70% of Americans expect rising international discord in 2025.
2. Mexico
Current Political Situation:
Claudia Sheinbaum assumed office in October 2024 after a decisive electoral victory for the Morena party. Her government emphasizes continuity of social programs but faces tension with the U.S. over 30% tariffs (temporarily suspended). Mexico has been a functioning electoral democracy since 2000, with alternating party control at federal and state levels. Recent reforms include the popular election of judges as of June 2025.
Internal Challenges:
Criminal violence from cartels such as the CJNG, along with corruption, torture, and disappearances, remain widespread. Judicial reforms aim to abolish guardianship systems and guarantee civil rights but spark controversy. Economically, both private and public investment are slowing, contributing to a growing fiscal deficit. Poverty, inequality, and organized crime remain persistent, keeping Mexico’s peace index low.
External Challenges:
U.S. tariffs (up to 30%) threaten the 84% of Mexican exports that currently enjoy tariff-free access under the USMCA. Cooperation on drug trafficking is strained, with Mexico opposing U.S. military interventions targeting cartels. While foreign direct investment is rising, uncertainty around U.S. politics and domestic reforms continues to cloud bilateral relations.
3. Canada
Current Political Situation:
Mark Carney became prime minister after the 2024–2025 political crisis, which led to Justin Trudeau’s resignation. Federal elections in April 2025 brought the Liberal Party back to power under Carney’s leadership. His administration is focused on internal trade and recalibrating U.S.-Canada relations, including labor and mobility agreements.
Internal Challenges:
Key issues include inflation, labor shortages in healthcare, internal trade barriers (costing up to CAD 200 billion), and weak productivity. The recent political crisis involved multiple ministerial resignations and growing national polarization.
External Challenges:
The U.S. has imposed 35% tariffs on Canadian exports, which account for 75% of Canada’s total exports. Canada also faces strained relations with China and Russia. Global tariff trends threaten growth, while immigration and poverty add further risks to Canada’s two-year outlook.
Outlook: What’s Coming for North America?
In 2025, North America faces a heightened risk of fragmentation driven by Trump’s policies, including tariffs and pressure over migration. This could escalate into a trade war, undermining regional cohesion. Global growth is expected to be modest (2.7%), with the U.S. outperforming Europe and China, yet recession risks loom due to protectionist measures. Ongoing conflicts in Ukraine and the Middle East may further increase instability. The USMCA is up for review in 2026, and unresolved disputes could cause its collapse. For both Mexico and Canada, their heavy export reliance on the U.S. (80–85%) might force strategic concessions but could also trigger diversification toward Asia. Regional prosperity has declined over the past decade, and further instability is likely without deeper integration.
The Pros and Cons of Acting as a Geopolitical Power
North America possesses unique strengths: vast natural resources, economic integration via the USMCA, and cultural diversity. These assets could position it as a counterbalance to China and Russia.
Advantages:
Economic:
Reduced logistics costs and internal tariffs; enhanced global competitiveness. North America holds 46% of the world’s financial wealth and could achieve 3–4% growth annually with stronger integration.
Geopolitical:
Collective security against threats such as transnational crime and global adversaries. Increased influence in forums like the UN and G20.
Innovation:
A dynamic mix of U.S. tech leadership, Canadian AI expertise, and Mexican manufacturing could drive advances in renewables and nearshoring.
Disadvantages:
U.S. Dominance:
Unilateral policies like tariffs erode trust. Both Mexico and Canada view the U.S. as a major threat (70% and 60% of citizens, respectively).
Internal Divides:
Political polarization and inequality—especially violence in Mexico—undermine unity. Protectionist trends risk further fragmentation.
External Vulnerabilities:
Reliance on global supply chains leaves the region exposed to shocks like conflict in Asia or the Middle East. Greater integration could also compromise national sovereignty.
