BLACKETT. June 3, 2026

Three months of bilateral talks turned trilateral overnight, and Trump quietly softened steel tariffs on the way in.

Canada's USMCA letter Dominic LeBlanc sent a formal letter to Greer and Ebrard Tuesday asking for a clean 16-year USMCA renewal plus a parallel track on sectoral tariffs, then flew to Washington with chief negotiator Janice Charette to sit down with Greer. Second meeting between the two since March. Charette told reporters Canada "could be facing some turbulence" ahead, which is the polite version of saying Canada is now negotiating from behind after sitting out Round 1.

Mexico opens the door Ebrard wrote his own letter to Greer and LeBlanc the same day, framing Mexico's position as "pursue arrangements that benefit all three nations with mutual respect and consensus." Read in Washington that translates as Mexico backing Canada's inclusion, which matters because the 82% North American content with 50% US carve-out that USTR tabled in Round 1 had zero slot for Canadian parts. If Mexico carries Canada in, the carve-out structure gets harder to defend.

Carney's Fortress framing Carney has been signaling openness to "Fortress North America" integration in select sectors for weeks, which gives Ebrard's letter somewhere to land. The framing lets all three governments treat USMCA renewal and tariff de-escalation as one conversation rather than two parallel ones, with Round 2 in Washington June 16-17 the next real test.

Section 232 quietly softened Trump signed a new Section 232 proclamation Monday, effective June 8 through December 31 2027, walking back the 50% rate on a wide list of derivatives. Agricultural equipment drops to 15%, mobile industrial equipment like bulldozers and forklifts drops to 15% for trade-deal countries, residential HVAC moves in at 15%, and capital equipment carrying 85%+ US-melted steel or aluminum content gets a 10% duty. For USMCA-qualifying goods from Canada and Mexico, the 25% standard rate now applies only to non-US content, the same content-tracking logic USTR is pushing in the auto rules of origin talks.

Brent climbed toward $98 Wednesday morning, third straight session of gains, with Iran missile strikes on Kuwait and Bahrain overnight and US strikes on Qeshm Island in response.

Source: ICE, NYMEX intraday quotes.

Trump said Tuesday a memorandum of understanding to reopen Hormuz "could be reached within the next week" while seeking written commitments from Iran on nuclear concessions, after Tehran had previously only given verbal assurances. US crude inventories drew down 6.8 million barrels last week per industry data, sixth straight weekly drawdown if EIA confirms in today's Weekly Petroleum Status Report.

Critical minerals already signed The US-Mexico Action Plan on Critical Minerals that Greer and Ebrard signed February 4 is the reason Mexico sits ahead of Canada in the USMCA pecking order. While Canada asks for a seat at the table, Mexico already wrote one of the chapters on supply chain security, which gives Sheinbaum's team leverage on the rules-of-origin fight in Round 2.

Mexico's China tariff alignment Mexico's 50% tariff on autos and parts from countries without a free trade agreement, in effect since the Plan México rollout, captures Chinese vehicles entering through any North American port. That puts Mexico structurally on the US side of the USMCA's China question, which is the unstated frame underneath every Round 1 topic Greer has named, automotive rules of origin, steel and aluminum, economic security.

Laredo cornerstone, Tehuantepec coming Laredo handles roughly 60% of Texas border truck traffic and stays the cross-border anchor for the next decade. The Interoceanic Corridor of the Isthmus of Tehuantepec is targeted for full completion this month, Mexico's structural play to position itself as a Panama Canal alternative with rail-and-road throughput linking Salina Cruz on the Pacific to Coatzacoalcos on the Gulf.

Container market heading into overcapacity Global containership capacity is on track to rise about 36% between 2023 and 2027 per Bloomberg Intelligence, while Bank of America analysts flag "structural overcapacity" coming in 2026. If liners return fully to Red Sea routing, Drewry projects container demand contracts 1.1% in 2026, which means the rate strength tracked through May ($2,800 per FEU, fourth straight weekly gain) sits on shorter ground than the headline suggests.

BLACKETT.