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By Faisal Kutty
Lawyer and Law Professor
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As U.S., Canadian, and Mexican officials continue negotiations over the future of the United States-Mexico-Canada Agreement (USMCA) after Washington declined to renew it in its current form, much of the discussion has focused on tariffs, rules of origin, and who holds the stronger bargaining position. That is understandable. Trade negotiations naturally invite scorekeeping.
But we are asking the wrong question.
The real issue is not whether one country secures another concession or a better tariff schedule. It is whether the United States is beginning to undervalue one of the foundations of its own economic and strategic strength.
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For more than three decades, North America has been one of the world's great economic success stories. Canada, the United States, and Mexico built integrated supply chains, expanded cross-border investment, and created a level of economic cooperation few regions have matched. That did not happen simply because tariffs were reduced. It happened because governments created institutions that gave businesses, investors, and workers confidence that the basic rules governing the relationship would remain reasonably stable over time.
Washington's decision does not terminate the USMCA. The agreement remains in force while negotiations continue and could ultimately emerge stronger than before. But it does introduce uncertainty into a legal and institutional framework that has underpinned North American integration for a generation.
As a lawyer, I tend to think about institutions before outcomes. Trade agreements are often reduced to tariff schedules and technical rules. They are also legal commitments. Their greatest value lies not simply in lowering barriers to trade but in creating predictability. Markets adapt remarkably well to new regulations or even higher tariffs. What businesses struggle with is uncertainty. Few companies invest billions of dollars in factories, infrastructure, or supply chains if they cannot make reasonable assumptions about the legal framework that will govern those investments over the next decade.
That predictability has been one of North America's least appreciated competitive advantages.
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I have watched it from both sides of the border. For years, I have taught law in the United States while maintaining deep roots in Canada. Like thousands of professionals whose careers have been shaped by NAFTA and later the USMCA, I have seen how much of North America's success depends on institutional stability rather than political agreement. Governments change. Elections reshape priorities. Trade disputes arise. Yet businesses continue investing because they assume the underlying framework will survive political cycles.
The same principle applies to the continent as a whole. American manufacturers depend on Canadian energy and Mexican production. Canadian companies rely on American markets. Mexican manufacturing has become an integral part of North American supply chains. These relationships were built over decades because investors concluded that North America was becoming a more predictable place to do business.
The opening of the Gordie Howe International Bridge this week offers a timely illustration. The bridge was conceived not simply as an infrastructure project but as an investment in a more integrated North American economy. It is expected to carry a significant share of the commercial traffic moving through the Windsor-Detroit corridor, one of the busiest trade gateways in North America. Yet what should have been a celebration of decades of economic cooperation instead became entangled in disputes over tariffs, toll revenues, and broader trade negotiations. The bridge itself will help move goods more efficiently. Whether it fulfills its broader promise depends, as much as anything, on confidence that the legal and political framework surrounding it remains stable and predictable.
Ironically, predictability has become even more valuable as Washington seeks to reduce dependence on China, strengthen domestic manufacturing, and build more resilient supply chains. Those objectives enjoy broad bipartisan support. But they raise an obvious question. If North America is expected to become America's preferred platform for economic resilience, should the legal framework supporting that integration become less predictable?
Every administration has both the right and the responsibility to negotiate vigorously in America's national interest. Canada and Mexico have their own interests. Hard bargaining is not the problem.
The question is whether uncertainty itself is becoming part of the negotiating strategy.
If it is, the costs may not appear immediately. Businesses rarely cancel investments overnight. They postpone decisions. They diversify risk. They begin looking elsewhere. Governments do much the same thing. They hedge. They make contingency plans. They become less willing to assume that today's framework will still exist tomorrow.
Those changes do not show up neatly in monthly trade statistics. They emerge gradually—in investment decisions, supply chains, and strategic planning. Over time, they shape how allies assess the reliability of American institutions.
That is why this negotiation matters.
For much of the postwar era, one of America's greatest strengths was not simply its economy or its military. It was its ability to build institutions that other countries trusted enough to organize their futures around. NATO, the Bretton Woods system, and North American economic integration all reflected the same basic insight: stable rules encourage long-term cooperation, and long-term cooperation creates strategic advantages that no country can build alone.
China can subsidize industries, expand its manufacturing base, and invest heavily in infrastructure. What it cannot easily replicate is a continent anchored by democratic neighbors, integrated markets, decades of legal cooperation, and institutions that have encouraged businesses and governments to invest with confidence.
Geography provided the United States with Canada and Mexico.
Institutions transformed that geography into one of America's greatest competitive advantages.
The current USMCA negotiations will determine more than the future of a trade agreement. They will help determine whether the United States still sees predictability—not simply military power, economic size, or negotiating leverage—as one of its enduring strategic assets.
Faisal Kutty is a professor of law at Southwestern Law School, affiliate faculty at the Rutgers Center for Security, Race and Rights, and a contributing editor for the Washington Report on Middle East Affairs*.*
The views expressed in this article are the writer's own.
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