Global Risk Indexes (12-03-2025)

North America’s Trade Order Fractures as U.S.-Canada Dispute Escalates Amid Global Instability

The U.S.-Canada trade war has evolved into a broader geopolitical realignment, threatening to weaken North America’s economic cohesion while opening opportunities for external actors to reshape regional trade flows. The long-term consequences of this dispute extend beyond tariffs, as Canada accelerates its search for alternative trade partners, potentially reducing U.S. leverage over its northern neighbor.

U.S. economic policies are amplifying global financial instability. Trump’s tariff-driven trade strategy has reignited concerns about inflation, supply chain disruptions, and reduced investor confidence. Canadian officials are openly debating countermeasures, with Alberta signaling the potential for oil export restrictions that could significantly impact North American energy security.

U.S.-Russia intelligence talks introduce strategic uncertainty into global security dynamics. If Washington is pivoting toward a more pragmatic approach with Moscow, NATO’s strategic posture in Eastern Europe could shift, reducing U.S. military engagement elsewhere—including in Latin America. This realignment could open diplomatic space for Russia and China to expand influence in the Western Hemisphere.

Latin America’s financial vulnerabilities are deepening as market volatility rises. The uncertainty surrounding U.S. trade policy is pressuring Latin American currencies and increasing inflation risks. If economic conditions worsen, key regional economies could face capital outflows, debt stress, and social unrest, compounding domestic political instability.

Looking ahead, the U.S.-Canada dispute risks transforming from a trade conflict into a full-scale geopolitical fracture. If Canada moves forward with its diversification strategy, North America’s trade architecture could be permanently reshaped, impacting energy markets, manufacturing sectors, and diplomatic relations across the hemisphere.

Geopolitical Risk Assessment for the Americas
(12-03-2025)

The geopolitical order in the Americas is being challenged by worsening trade disputes, financial uncertainty, and shifting global power alignments. The U.S.-Canada trade war has escalated into a structural economic conflict, with Ottawa considering alternative markets that could permanently weaken North American economic integration. Meanwhile, Washington’s unexpected intelligence coordination with Russia raises questions about U.S. foreign policy priorities, especially regarding NATO and its engagement in Latin America. Additionally, global market instability fueled by U.S. economic policy is exacerbating inflationary pressures, with ripple effects on Latin American economies reliant on U.S. trade and investment.

Geopolitical Risk Index

Developments to Follow for the Americas (See All Global)

Previous Briefings

• North America’s Trade Order Fractures as U.S.-Canada Dispute Escalates Amid Global Instability - (12-03-2025)
• Argentina’s Economic Collapse Nears, Mexico’s Security Crisis Deepens, and Latin America’s Political Fragmentation Grows - (11-03-2025)
• Latin America's Strategic Recalibration: Economic Power Shifts, Security Fragility, and Political Upheaval Redefine the Region - (10-03-2025)
• Economic Decoupling, Security Fragility, and Political Realignments Reshape the Americas’ Geopolitical Order - (09-03-2025)
• Economic Shifts, Security Crises, and Political Instability Drive Latin America's Geopolitical Transformation - (08-03-2025)
• Economic Realignments, Security Fragility, and Political Unrest Accelerate Latin America’s Transformation - (07-03-2025)
• Economic Fragmentation, Security Crises, and Diplomatic Realignments Drive the Americas Toward a New Geopolitical Order - (06-03-2025)
• Economic Pressures, Security Clashes, and Diplomatic Rifts Deepen Instability Across the Americas - (05-03-2025)

See all previous briefings