As the United States enters the final stretch of 2025, its closest neighbors are executing a sophisticated and calculated economic counterstrategy—one that has left President Donald Trump increasingly isolated on the global stage and vulnerable at home. In a year defined by tariff escalation, diplomatic volatility, and domestic political strain, Mexico’s President Claudia Sheinbaum and Canada’s Prime Minister Mark Carney have emerged as unlikely but formidable rivals, skillfully navigating what many economists now describe as the most disordered U.S. trade position in decades.

According to trade experts and several senior officials familiar with both governments’ strategies, the two leaders have spent the year quietly reshaping the North American economic balance. Their methods differ—Sheinbaum favoring a precise combination of subtle flattery and hard-edged economic nationalism, Carney leaning on technocratic expertise and diversification—but their objectives converge: capitalize on America’s self-inflicted trade shock and reposition their countries as indispensable alternatives in a disrupted global supply chain.

The results, visible in a tranche of year-end economic data, are stark. Mexico’s exports to the United States have surged more than 9 percent year-over-year, with non-automotive goods skyrocketing 17 percent. The reason is not subtle. As Trump’s tariffs on China climbed past 37 percent, multinational logistics firms and U.S. retailers quietly redirected their sourcing to Mexico, which—despite record tariff pressure—faces an effective rate of only 4.3 percent. Nearly 85 percent of Mexican exports remain tariff-free under existing North American agreements.

In any other year, such realignment might have unfolded quietly. Under Trump, every shift carries political weight.

President Sheinbaum, a physicist by training and newly elevated stateswoman, has approached the moment with deliberate calculation. She has publicly pushed back—sometimes with dry humor—against Trump’s more provocative gestures, including his attempt to rename the Gulf of Mexico the “Gulf of America.” In response, she stood before a map and suggested renaming a swath of the United States “Mexico.” The moment went viral in Latin America and quietly signaled a new posture: Mexico would not absorb Washington’s rhetoric without reply.

Yet Sheinbaum has paired that defiance with selective cooperation. Her government removed several cartel leaders in coordinated operations with U.S. agencies, appeasing Trump’s demands for tougher action on organized crime. She also imposed a 25 percent tariff on Chinese automobiles, a move that aligned with Washington’s geopolitical agenda while fortifying Mexico’s domestic industry. Her message has been unmistakable: Mexico can support U.S. priorities when they align with its interests—but it will not be subservient.

In a rare English-language interview this year, Sheinbaum dismissed American conservatives advocating military intervention in Mexico as “propagandistic,” noting that drug consumption originates in the United States and that meaningful progress requires bilateral work, not unilateral threats. The statement reinforced her growing profile as a leader capable of confronting Washington without undermining regional stability.

Canada faces a more complex challenge. With two-thirds of its economy tied to trade and three-quarters of its exports flowing south to the United States, any disruption from Trump’s volatile tariff environment carries outsized risk. Prime Minister Mark Carney—a former head of both the Bank of Canada and the Bank of England—has responded by accelerating what his government calls “trade diversification,” a sweeping effort to expand Canadian exports to India, China, and other markets overlooked or antagonized by Trump’s diplomacy.

Carney, whose résumé rivals that of a Federal Reserve chair in two nations, has assigned most of his cabinet to the diversification project. His trade team, including Canada–U.S. Trade Minister Dominic LeBlanc and the Global Affairs ministry, is advancing deals intended to buffer Canada from Washington’s unpredictability. Unlike Mexico, Canada cannot lean on low-cost manufacturing; its leverage lies in critical resources, energy capacity, and the materials essential to the artificial-intelligence boom consuming unprecedented electricity worldwide.

Carney, too, has faced Trump’s rhetorical edge. Trump has repeatedly mocked Canada’s global position and dismissed its sovereignty. In a recent public exchange, Carney responded pointedly when asked about Trump’s suggestion that Canada’s future might be for sale. “There are some places,” he said, “that are never for sale.” It was a remark delivered with technical calm but unmistakable defiance—a contrast to Trump’s confrontational improvisation.

Together, Sheinbaum and Carney are offering two models of resistance to Trumpism: one built on strategic agility, the other on institutional endurance. Both implicitly challenge Trump’s central assertion that America can bend North American markets to its will. Increasingly, data suggest otherwise.

Yet the tension is not merely economic. As Trump’s political presence expands—a second presidency marked by felony convictions, a fractured domestic landscape, and intensifying global scrutiny—other institutions appear to be repositioning themselves in response. Even the election of Pope Leo, the first American pope in the history of the Catholic Church, has been interpreted by some analysts as a symbolic counterweight to Trump’s influence. The Vatican has not commented on such speculation, but observers note the unusual timing: an ascendant Trump on one side, a progressive Chicago-born pope on the other.

For now, Mexico and Canada are focusing on measurable outcomes: exports, tariffs, supply chains, and economic leverage. But the broader narrative is unmistakable. Trump entered office promising dominance over America’s neighbors. Instead, those neighbors have used his tariffs, rhetoric, and unpredictability to strengthen their positions in ways few in Washington anticipated.

As 2026 approaches, North America’s balance of power looks less like a hierarchy and more like a three-way standoff—one in which the United States, for the first time in decades, is not the only actor writing the rules.