Last week, the U.S. scored a serious “own goal,” when it missed the deadline to renew the United States-Mexico-Canada Agreement (USMCA) for 16 years. The agreement will now go into an annual review until 2036. Then, absent extension, it will expire.

At American Leadership Initiative (ALI), we support renewing and strengthening USMCA so it continues protecting middle-class jobs, securing resilient North American supply chains, and delivering real benefits for American workers and families. ALI advances practical solutions that strengthen U.S. economic competitiveness in the 21st century.

In his recent meeting with ALI, Congressman Greg Stanton emphasized that while there are certainly provisions that should be updated, USMCA has been America’s most successful economic partnership in history, critical to the U.S. economy and benefiting U.S. workers and families. Mexico and Canada are the #1 and #2 U.S. trading partners, supporting about 13 million U.S. jobs.[1]

Bipartisan Foundations for America’s Economic Future

Congress recognized the importance of USMCA in 2020, when it approved the agreement by overwhelming bipartisan majorities in both the House and the Senate.[2] American Leadership Initiative (ALI) strongly encourages the Congress to pass a resolution urging the Administration to conclude negotiations with Canada and Mexico and extend USMCA for 16 years.

The shift to an annual renewal introduces a great deal of uncertainty. Companies will be reluctant to make additional investments and will look to diversify their sourcing to minimize risk, which will impact U.S. employment.

USMCA trade was largely exempt from the President’s tariff policies. Going to an annual renewal could remove those exemptions, which would raise tariffs by $466 billion from 2027 through 2036—or about $300 per US household in 2027—and shrink US output by 0.1 percent and hours worked by the equivalent of 95,000 full-time jobs.[3]

While the auto sector is the most integrated, many other sectors rely on the economic integration between the three countries, including agriculture, pharmaceuticals, textiles, aerospace and more.

USMCA is even more vital given America’s desire to move supply chains away from China and near shore key inputs. The instability caused by the Iran war has also reinforced the U.S. need for North American supply-chain security.

For American farmers, the stakes are particularly high. Canada and Mexico are among the largest buyers of U.S. agricultural products. The agricultural relationship among all three is deeply complementary. Mexico depends heavily on American grain and feed exports, while American consumers benefit from year-round access to Mexican produce and food products.

The same story can be found throughout North American manufacturing. Automobiles, aerospace products, medical equipment, semiconductors, and industrial machinery are often designed, manufactured, and assembled across all three countries. Components routinely cross borders multiple times before a final product reaches consumers.

The North American automotive sector, for example, functions as a single integrated production platform rather than three separate national industries. Disrupting that system through tariffs, uncertainty, or withdrawal from USMCA would raise costs for American manufacturers and ultimately for American consumers.

USMCA is also one of the most advanced digital trade agreements ever negotiated. Its digital trade chapter established groundbreaking rules that protect cross-border data flows, prohibit forced data localization requirements, and prevent governments from demanding access to proprietary source code as a condition of doing business. These provisions help support a North American digital economy that now exceeds $250 billion annually and underpin everything from logistics and manufacturing to financial services and cloud computing.

Importantly, USMCA also includes novel labor provisions, requiring Mexico to increase its labor standards and instituting a rapid response mechanism, which allowed the U.S. to challenge labor violations at an individual facility in Mexico. This mechanism also provides a relatively fast process for investigating and remedying alleged violations.

USMCA and North America’s Strategic Advantage in Global Competition

The global economic competition of the 21st Century is increasingly organized around large-scale regional ecosystems. China has built an enormous manufacturing network across Asia. The European Union functions as an integrated economic market of nearly 450 million consumers. North America has its own strategic advantage: a combined market of nearly 500 million people, world-class innovation, abundant natural resources, advanced manufacturing, sophisticated financial systems, and deep energy integration. USMCA helps bind those advantages together.

If the U.S. wants to continue creating good jobs and grow the middle class, concluding negotiations to update the agreement and extend USMCA for 16 years would be a home run. Our prosperity depends on it.

[1] https://www.brookings.edu/articles/strengthening-us-competitiveness-through-a-renewed-usmca/

[2] https://rollcall.com/2020/01/16/senate-passes-usmca-bill-giving-trump-a-win-on-trade/

[3] Failing to Renew USMCA Would Result in Tariff Uncertainty

Last week, the American Leadership Initiative had the distinct privilege of hosting Senator Andy Kim (D-NJ) for a robust, candid conversation on how we move America from this moment of anxiety to one of genuine opportunity. In a time when too many middle-class families feel squeezed by rising costs, uncertain supply chains, and a sense that the system isn’t working for them, Senator Kim offered something rare and valuable: a clear, principled framework built around resilience.

As a career public servant who served under both Presidents Bush and Obama — and who began his career working for Senator Dick Lugar — Senator Kim lives the “country first” ethos that defines our work at ALI. As a father, he spoke with particular conviction about building greater stability and opportunity for the next generation. That motivation runs through everything he shared.

The World We Face

Senator Kim described a United States confronting historically high levels of domestic and international distrust. Many allies now view the U.S. as an unreliable partner. We have entered a prolonged “age of crisis” that will extend far beyond any single administration.

The defining features of this moment are clear:

● Deep internal political polarization

● An increasingly multipolar international system

● Technological change moving faster than governments can adapt

These are not abstract challenges. They directly shape the economic security, job prospects, and everyday costs facing middle-class families.

Resilience as a National Project

Senator Kim’s core message was that resilience must become both a domestic and international national project. It starts with confronting the supply-chain vulnerabilities that have exposed real risks to our economy and security.

We must reduce dangerous strategic dependencies, secure access to rare earth minerals, strengthen pharmaceutical and medical supply chains, and confront the reality that approximately 90 percent of antibiotics touch the Chinese supply chain. At the same time, America’s technological ambitions are currently outpacing our energy production capacity. Expanding reliable, affordable domestic energy is not optional — it is a strategic imperative for competitiveness and family budgets.

These are not just “national security” issues in the traditional sense. They are middle-class issues. Secure supply chains mean stable jobs in manufacturing and advanced industry. Affordable energy and medicines mean lower costs for families. Resilient infrastructure means opportunity that lasts.

Domestic and Foreign Policy Are No Longer Separate

One of the most important takeaways from our discussion was that the old firewall between domestic and foreign policy is obsolete. Foreign policy decisions now have immediate consequences at kitchen tables across America — and vice versa.

Senator Kim pointed to the Infrastructure Investment and Jobs Act as a model: legislation that simultaneously strengthens our domestic economy and our global position. He also warned that overly restrictive approaches to H-1B visas or international student enrollment could undermine the very innovation engine that has long powered middle-class opportunity.

Economic security is national security.

Congress, the Private Sector, and Durable Solutions

Senator Kim was refreshingly candid about Congress’s tendency to operate reactively — focusing on immediate political fights rather than long-term strategic planning. He stressed that lasting progress will require sustained bipartisan coalitions that include the private sector. Ideas that are introduced by only one party too often become viewed through a purely partisan lens and fail to endure.

This is exactly why ALI exists: to develop practical, durable ideas that can advance regardless of which party holds power — and to build the coalitions needed to make them real.

Seven Principles for a More Resilient America

Senator Kim outlined seven guiding principles that capture this vision. These are not partisan talking points; they are a pragmatic blueprint:

1. Protect the economic security of American families with the same intensity as we do our nation’s physical security. Middle-class families deserve leaders who treat their ability to afford housing, healthcare, education, and a secure retirement with the same seriousness as any external threat.

2. Resource and energy security must be treated with the same urgency as the CHIPS Act and infrastructure law. Secure supply chains, domestic refining and processing capacity, and expanded energy production are essential for both national strength and everyday affordability.

3. Resilience is not self-reliance. America cannot succeed alone and must update its alliances around economic and technological relationships, not just defense. Strong partnerships with reliable allies create markets for American-made goods, shared innovation, and jobs here at home.

4. The artificial barrier between domestic and foreign policy must be broken down. Foreign policy alone cannot deliver for the American people.

5. Pragmatism is required after years of overreach, including misguided wars of choice that have carried heavy costs for American families and our strategic position.

6. Restoring Americans’ faith in government and rooting out corruption is essential. The country cannot lead globally if its foundations are weak at home.

7. Resilience is not an end in itself — it is the necessary condition to build something greater. It creates the stable platform from which America can once again offer real opportunity and lead by example.

Turning Vision into Action

At the American Leadership Initiative, we are already working to advance exactly this kind of integrated, resilience-focused agenda through our Revitalize America project and our convenings. Senator Kim’s visit reinforced our conviction that America’s strength abroad begins with a strong, stable, and growing middle class at home.

We are grateful for Senator Kim’s partnership and look forward to continuing this important work together — developing policies and messages that deliver tangible results for working families while strengthening America’s position in a rapidly changing world.

The path from anxiety to opportunity is clear. It runs through resilience.

He goes on to say that our trade and foreign policy cannot deliver for the American people, or position us to shape the world around us, if it is disconnected from what we are doing at home. We need to do a better job of coordinating and blending domestic and foreign policy.

The U.S. has made modest efforts to address economic insecurity through narrow tools. From 1962 to 2021, Trade Adjustment Assistance (TAA) was a modest effort to blend domestic and foreign policy. When a trade agreement was passed by Congress, it was typically paired with TAA, which offered support to workers who lost jobs because of a trade agreement. It was helpful but was never designed to help the far larger number of workers displaced by automation, technological change, or broader economic shifts. When TAA expired in 2021, approximately 48,000 workers were relying on its benefits, and even this limited program disappeared.

We are now at a more demanding inflection point. Rapid technological change is reshaping entire industries. A narrow, trade-only approach is no longer sufficient. What is needed is a comprehensive strategy — one that provides real support to workers displaced for any reason and creates meaningful pathways to acquire the skills for tomorrow’s jobs. This will require sustained partnership between government and the private sector. If we fail to embrace workforce investments and other initiatives to support individual economic security, we risk an even greater backlash against American trade and foreign policy.

ALI is focusing on this challenge. We convene Members of Congress, business leaders, and policy experts to develop practical ideas that link America’s role in the world with the economic security of its people. We believe that a credible trade, technology, and foreign policy agenda must be paired with serious domestic investments in workers and communities.

This Thursday, ALI will continue that conversation with Senator Andy Kim, who will speak on developing a new agenda for American economic and national security. He offers a clear-eyed and forward-looking framework for exactly this work — one that treats the security of American families as the essential foundation of credible national strength.

We’ve convened the nation’s leading experts who are on the frontlines are shaping what comes next for America. Read our full report here.

Here are three principles for getting it right.

1. Restore Congressional authority and impose real guardrails.

Delegated power has been abused. A responsible agenda requires Congress to reassert oversight with clear metrics, transparent review, and periodic sunsets.

Reform Sections 232 and 301 so tariffs are time-limited, evidence-based, and require congressional approval to continue. Repeal the overly broad and outdated Sections 338 and 122. Create new, targeted remedies for China’s nonmarket practices — especially industrial overcapacity — where current law falls short. Without these structural fixes, tariffs will remain unpredictable weapons rather than disciplined tools.

2. First, remove the tariffs that hurt American families and manufacturers.

Many current tariffs raise costs on foodstuffs, basic consumer goods, and critical manufacturing inputs not produced domestically. These do not serve national security or economic strategy — they simply function as a hidden tax on American workers and businesses.

A responsible agenda starts by eliminating tariffs that increase prices and deepen inequality without delivering strategic benefit. Lowering the burden on families and supply chains should be the baseline, not an afterthought.

3. Use tariffs to strengthen alliances and build resilient supply chains — not to alienate partners.

Tariffs should be deployed narrowly and strategically: to negotiate plurilateral supply chain agreements in critical minerals, semiconductors, pharmaceuticals, and clean tech; to open markets and set standards for digital and AI trade; and, when used for national security, only when narrowly defined, evidence-based, coordinated with allies, and paired with export controls and industrial policy.

They can also support energy resilience and climate goals by favoring clean U.S. production over higher-emission imports. The goal is a stable, rule-based regime that works with allies and like-minded partners rather than against them.

BOTTOM LINE: Tariffs will remain part of the toolkit. The difference between a chaotic and a responsible approach is whether they are predictable, legally grounded, narrowly targeted, and integrated into a broader strategy that lowers costs for Americans while strengthening supply chains and alliances.

At ALI’s Revitalize America initiative, we are focused on exactly this kind of modern, alliance-centered economic statecraft. The next chapter of U.S. trade policy can be smarter than the last one — if we choose discipline over disruption.

I spent several days last week in London and Brussels, co-hosting geopolitical dinners with senior figures from finance, policy, and business on both sides of the Atlantic. The conversations covered a lot of ground: the Iran war, Ukraine and NATO, China, energy, AI, and private capital. Underlying all of it was a deeper question: what will actually hold this relationship together when shared values are no longer doing as much of the work as they once did?

Before getting to the challenges, it is worth stating what is at stake. The transatlantic partnership is the deepest economic relationship in the world, supporting more than 15 million jobs on both sides of the Atlantic and underpinning decades of shared growth, innovation, and prosperity. That foundation is worth fighting for.

The relationship is shifting from values to interests. That is not fatal, but it is not without consequences.

For decades, the transatlantic partnership rested on shared values, a common democratic identity that made alliance management easier and trust more durable. That foundation has not disappeared. But it has weakened considerably. President Trump has helped sharply accelerate a shift that was already underway in Washington, where Europe is no longer the automatic starting point for US security strategy. Several people made the important point that this is not just a Trump phenomenon. It reflects something deeper and longer-term in American politics, which means Europe cannot simply wait it out.

Relationships built on shared interests can be durable too. The question is whether leaders on both sides are willing to do the harder, more transactional work of building practical cooperation on trade, AI, energy, and defense, and whether that cooperation can compound into something more resilient over time. I think it is possible. I am less certain it is inevitable.

Ukraine exposed a dependency Europe cannot ignore.

There was cautious optimism about Ukraine. Putin is under real pressure, and Ukraine’s long-range strike and drone capabilities are imposing genuine costs on Russia. But the underlying message was sobering; Ukraine remains heavily dependent on the US for air defense, Patriot systems, and intelligence. Any meaningful American pullback would be felt immediately and severely.

The broader point extends beyond Ukraine. Europe still lacks the defense coordination and capacity to act as a fully capable strategic partner. Progress is being made. Germany’s fiscal shift is real and significant, as it is in several other key European countries. The renewed push on defense industrial policy is real. These are not small things. The United States should welcome these developments.

China could pull the relationship closer, not push it apart.

China is often framed as a source of transatlantic tension, with Washington pushing for a harder line than European capitals are willing to take. There is truth in that, but Europe’s view of China is hardening on its own terms. The EU’s trade deficit with China hit roughly 360 billion euros in 2025, with Chinese exports rising sharply into European markets as US-bound shipments fell. The pressure on European autos, steel, and manufacturing is real and growing.

Europe still lacks a coherent, unified China policy, which limits its leverage with both Beijing and Washington. But that also creates a real opportunity for coordinated transatlantic responses to Chinese trade practices and economic coercion. If handled well, Beijing may end up being the strongest argument for keeping the transatlantic alliance together, not pulling it apart.

A few other things worth noting.

Energy is equally central to the transatlantic agenda. It underpins European security, industrial competitiveness, and AI ambitions alike. Transatlantic cooperation on LNG, critical infrastructure, and broader energy partnership represents one of the clearest areas of genuine alignment — and one of the most underutilized.

Europe should define its own approach to artificial intelligence rather than trying to replicate the US race toward frontier models. A pragmatic European strategy focused on infrastructure, applications, energy availability, and concrete growth outcomes could create better conditions for transatlantic cooperation on standards and governance than simply trying to keep pace.

On private capital, Europe will not meet its defense, energy, or technology ambitions without making it substantially easier to build and scale companies. Europe’s regulatory culture has become a constraint on innovation and the investment it urgently needs. A serious growth agenda has to accompany the rules. That is not ideological. It is practical.

Beyond the economic agenda, there is a more unsettling geopolitical undercurrent worth naming. Not a consensus view, but a real anxiety: that major powers are increasingly operating through coercion rather than norms, with implications for Greenland, Taiwan, Cuba, and the Baltics. The concern is less about any specific scenario than about what happens when smaller countries conclude that the rules-based order offers little protection without hard power behind it.

What needs to happen now.

A clear agenda emerges from all of this. Four things stand out.

First, rebuild strategic economic alignment. Move beyond tariff disputes and industrial friction toward a coordinated transatlantic approach on supply chains, energy, critical minerals, AI, and economic security. The shared interest is there. The structure needs to follow.

Second, institutionalize high-level coordination. The US and Europe need regular structured consultation, not only in crisis, but routinely across trade, technology, defense, and China policy. Fewer surprises would go a long way toward rebuilding trust.

Third, deliver visible results. The relationship cannot rest on history alone. Transatlantic cooperation must produce tangible outcomes on jobs, innovation, energy resilience, and economic growth that citizens on both sides can actually feel.

Fourth, choose partnership over drift. Differences between the US and Europe are inevitable. But both sides should recognize what fragmentation costs at a moment of rising geopolitical competition and instability. The democratic world cannot afford it.

Bottom line.

The transatlantic relationship may be under strain, but neither side can afford strategic drift. The task now is not nostalgia for what was, but reinvestment in a partnership that remains essential to global stability and prosperity

*Myron Brilliant is a Senior Counselor to the American Leadership Initiative. He is also a Senior Counselor to Dentons Global Advisors-ASG and is founder of the Brilliant Impact Group. Prior to his current roles, Brilliant served as the Executive Vice President and Head of the International Affairs Division at the U.S. Chamber of Commerce, the world’s largest business association. Brilliant is a recognized authority and sought-after participant in engagements with foreign heads of state and with top U.S. government officials in the administration and on Capitol Hill. He is a frequent commentator for national media outlets, covering international business and trade policy.

Most Americans want the U.S. to be engaged in the world, support the need for American leadership in trade and technology, and understand the urgency of not ceding global leadership to China. However, a renewed approach to global leadership must be linked to domestic priorities: making life more affordable for working families, expanding opportunities for workforce training, and making sure that the benefits of technology are equally shared.

America’s greatest asset has always been its middle class. And our greatest strength has been our global leadership. But you can’t have one without the other. These are the challenges of our time. America must lead this next industrial revolution -- but leadership means not just dominance in emerging tech. It means making sure that the benefits of that technology are evenly shared by all Americans.

In its eighth year, American Leadership Initiative (ALI) has hosted high level convenings bringing together close to 70 Members of Congress, former senior Administration officials, and leading experts from business and civil society for sustained, off-the-record conversations aimed at developing actionable ideas for renewing American leadership. These are not one-off events. They are an ongoing effort to build consensus around policies that can actually command durable political support at home while advancing U.S. interests and shared values abroad.

In my 40 years working on trade and international economic policy at the Office of the U.S. Trade Representative and later at General Electric, one lesson stood out: when significant portions of the Americans feel left behind by economic change, the political foundation for an engaged foreign economic policy erodes. The reverse is also true. When broad-based prosperity and opportunity are real, the country has far more capacity to sustain alliances, invest in long-term competitiveness, and compete strategically.

Over the next two years, the framing of these issues will matter a great deal. As we head into the midterms and 2028, ALI is focused on working with elected officials and thought leaders to develop policy ideas and messaging that treat global engagement and domestic renewal as inseparable. That is the only foundation on which a durable, effective American leadership agenda can be built.

-- Dr. Orit Frenkel is the co-founder and CEO of American Leadership Initiative. Learn more about ALI at www.american-leadership.org; Connect with her on LinkedIn here.