Sources this week: NPR / Trade Court Ruling (May 7), The Hill / PBS News / Al Jazeera (Carney-Trump, May 6), White & Case (Mexico tariff decree / May 2026), BNN Bloomberg / Mexico Business News (USMCA bilateral track), Colorado Sun / WyoFile / EnviroLink (Colorado River, May 2026), TrendForce / Data Center Knowledge / CNN Business (AI infrastructure, May 2026), FreightWaves / Kearney (FDI), CSIS / Brookings / Baker Institute (USMCA analysis).

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🔴 THE WEEK THAT WAS — Five Stories That Moved the Continent

1. Legal Shock: The Court That Reshuffled the Table

The week's most consequential event did not happen in a negotiating room. It happened in a courthouse.

On May 7, the U.S. Court of International Trade struck down the Trump administration's second round of replacement tariffs — issued after the Supreme Court ruled in February that the original emergency tariffs exceeded presidential authority. The court found that the balance-of-payments statute used does not apply: no qualifying deficit condition exists. The ruling is a direct blow to Washington's primary trade leverage instrument.

The practical consequence is immediate: the U.S. government must refund more than $166 billion in tariff collections. First payments begin this week. For importers across the continent, it is a material reversal. For the USMCA negotiation, it scrambles the pressure calculus.

Key numbers:

• $166B+ — refund obligation from struck-down tariffs

• 2 — tariff rounds struck down by courts in 2026

• May 7 — ruling date; first refunds expected week of May 11

• July 1 — USMCA decision window; negotiating leverage now in legal limbo

What to watch: Whether the administration appeals to the Supreme Court, and how fast. The answer determines whether the July 1 deadline retains its bite.

2. Canada Is Back in the Room

For six weeks, the working assumption was that USMCA was being renegotiated as a US-Mexico bilateral while Canada diversified. That framing changed this week.

On May 6, Prime Minister Carney sat across from President Trump in the Oval Office — the first formal bilateral of his tenure as PM. When Trump raised Canadian sovereignty, Carney replied: "It's not for sale. Won't be for sale, ever." Trump replied: "Never say never." Neither backed down. Both kept talking.

More consequentially: Canada named Janice Charette, the former head of Canada's public service, as its chief CUSMA negotiator. And the first formal trilateral negotiating round was confirmed for May 25 in Mexico City.

What to watch: Canada's opening posture at the May 25 Mexico City trilateral. The gap between "cannot dictate" and "step change in defense" is where the deal gets made — or doesn't.

3. Mexico Plays the Rules-Based Card

On April 23, President Sheinbaum published a tariff decree imposing 5%–35% duties on 185 tariff lines — chemicals, textiles, steel, aluminum, auto parts, electrical materials — targeting non-FTA-country imports. This follows the January 2026 decree imposing 50% tariffs on 1,000+ Chinese and Indian goods.

Mexico arrives at May 25 with receipts: 86.3% USMCA compliance (from ~45% a year ago), record $40.9B FDI in 2025, Kearney 25→19 jump, and $5.8B in January 2026 investment announcements.

The energy bottleneck remains unresolved. CFE's grid constraints throttle industrial execution across the two primary maquila corridors: Northern Mexico from Tijuana to Monterrey, and Central Mexico from San Luis Potosí to Puebla. Private capital exists — what is missing is the regulatory pathway.

And a quieter but growing concern: Mexico's 2025 Customs Reform. Throughout U.S. and Canadian corporate offices, there is rising unease about new compliance burdens, steep fines, bureaucratic complexity, and the cloud over the IMMEX and PROSEC programs. Mexico's reform is moving in the opposite direction from trade facilitation — adding friction at exactly the wrong moment.

4. Water: The River That Will Not Wait for July

Lake Powell sits at 394 feet as of early May — so low that hydropower generation through Glen Canyon Dam could halt as soon as September 2026. Snowpack in the Colorado Basin is at 27% of normal, the lowest on record.

California, Arizona, and Nevada responded with a joint proposal to cut total Colorado River usage by 13% through 2028. Emergency releases from the Flaming Gorge Reservoir in Wyoming are already underway.

The Colorado system supplies water to seven U.S. states, two Mexican states, 30 tribal nations, and roughly 40 million people. AI data centers are now drawing from the same diminishing pool — an infrastructure collision this continent has no institutional mechanism to manage.

5. Compute: $830 Billion, No Continental Conversation

The top nine cloud service providers will spend an estimated $830 billion on AI infrastructure in 2026 — a 79% increase over 2025. Microsoft: $190B. AWS: $230B+. Google: $180–190B. Data center racks are now designed for hundreds of kilowatts — approaching megawatt scale.

Power, not compute, is the binding constraint. More than 100 local jurisdictions have enacted moratoriums. More than 300 state data-center bills were filed in the first six weeks of 2026.

The North American AI compute corridor is a continental story. The states that can support this buildout form a corridor running deep into Mexico: Baja California, Sonora, Chihuahua, Coahuila, Nuevo León, San Luis Potosí, Guanajuato, Querétaro, Jalisco — and beyond. This is the conversation President Sheinbaum needs to be having. In a global competition where the U.S., China, and Europe race to claim the compute layer of the next economy, a coordinated North American AI strategy is better for the continent than three uncoordinated national ones.

🟠 QUICK SIGNALS — Also on the Radar

• Legal cascade: With the trade court striking down replacement tariffs, a Supreme Court appeal appears likely. If taken, the tariff landscape remains in legal suspension through the fall — precisely when USMCA July 1 outcomes need enforceability.

• Logistics reality: Supply Chain Brain (May 5): a chaotic front-loading year for imports has left Laredo and Houston processing outsized volumes; West Coast ports distorted as importers reroute away from China-origin goods.

• Canadian resource leverage: Uranium price spike (+41%) holding. BC lithium refinery — first in North America — coming online. Canada is converting its resource base from passive export income into active geopolitical instrument.

• Mexico's demographic window: Median age ~29–30; 67.4% working-age; unemployment at 2.6%. The labor math that makes nearshoring work has a clock — Mexico's median age reaches 42 by 2050. The window is roughly two decades, not indefinite.

• Defense dimension: Carney committed to 2% of GDP defense spending by March 2026, 5% by 2035. The U.S.-Canada military relationship is being restructured in parallel with trade talks.

• MX Customs Reform — growing boardroom concern: Throughout U.S. and Canadian corporate offices, there is rising unease about Mexico's 2025 Customs Reform — tough fines, bureaucratic complexity, and growing uncertainty around the IMMEX and PROSEC programs. Companies are watching. Some are already reconsidering timelines.

🎙️ THIS WEEK AT NA77 — On the Record with Dr. Daniel Covarrubias

This week, The North American — 77 sat down with Dr. Daniel Covarrubias for our first official collaboration conversation — one of the most meaningful conversations in NA77's short history.

Daniel and Eddie first met in Monterrey more than 25 years ago. His path has been quintessentially Ambos: from computer systems to business, from business to the border, from the border to a doctorate and a career at Texas A&M International University in Laredo — where he now directs the Texas Center for Border Economic and Enterprise Development and teaches the next generation of supply chain leaders.

Along the way, he coined the framework Logistechs — born, he'll tell you without hesitation, in the shower — to describe how exponential technologies are reshaping cross-border trade, logistics, and supply chains in real time. Today his work reaches PBS, the Wall Street Journal, TEDx, and Washington briefing rooms. His book on the future of crossborder trade is available at Amazon Books.

We are proud to announce that he is joining NA77 as a monthly writing collaborator, focused on the digital integration of North America. We have much to share. Full profile coming soon.

→ Follow Dr. Daniel Covarrubias · LinkedIn · @jdanielcova on X

You're reading The North American — 77. We publish every Sunday — and every Monday for subscribers who want the week's lead story first. If this brief is part of your Sunday morning, make it official. → Subscribe — it's free.

📚 FROM THE NA77 ARCHIVE — Recent Papers Worth Your Time

Each week we point back to the work that holds up. These pieces form the foundation of everything we cover.

The Announcement Is Not the Investment

April 22, 2026 · Long View

Mexico has become extraordinarily competent at the ceremony of investment. The ribbon-cutting, the presidential decree, the rendering of the industrial park. What has not kept pace is the physical infrastructure — the megawatts, the transmission lines, the regulatory pathways for private capital. "The continent is at capacity for announcements. What it needs now is megawatts."

We Have the Treaty. We Do Not Have the Table.

April 20, 2026 · Long View

The morning USTR Greer flew to Mexico City and Canada was not in the room. On the Hardware vs. Software problem of North American integration — and why a permanent North American Industrial Coordination Council is the piece the 1994 architecture never included.

86.3%. The Number the Politicians Aren't Talking About.

April 25, 2026 · Sunday Brief

While governments debated tariffs, the corridor filed paperwork. How North American manufacturers voted with their supply chains — and what 86.3% USMCA compliance actually means for the continent's future.

$100 Billion in Compute Leases. No Continental Conversation.

April 17, 2026 · Long View

The largest capital reallocation in North American industrial history is happening without a name. On the Infrastructure Terms for the Next Decade — and why they're being written right now, in private contracts.

📊 WEEK IN NUMBERS

🔵 EVENTS TO WATCH — Week of May 11–16, 2026

⚪ THE LONG VIEW — By Eduardo Joffroy G

The People Who Actually Take the Risks Should Have a Seat

The energy deficit, the customs reform complexity, and the infrastructure gaps in Mexico's supply chain are not abstractions. They are the daily math of every industrial developer holding permits in Monterrey, every manufacturer calculating whether the next facility goes in Querétaro or somewhere else entirely. Nearshoring continues — but capital follows long-term stability. It follows clear rules, reliable energy, rule of law, available water, and infrastructure that is ready before the announcement, not years after it. When those conditions are in doubt, investment does not disappear. It relocates.

What is remarkable is how much of this continent's integration has happened not because of political decisions, but in spite of political cycles. The operators, the builders, the logistics teams, the engineers — they did not wait for July 1. They voted with their supply chains, their compliance filings, their capital. They built the hardware of North American integration while the institutional conversations struggled to keep pace.

That is exactly why the USMCA review, as currently structured, is an incomplete conversation. The $1.3 trillion in annual trade flowing across these three borders is not an abstraction in a negotiating room — it is the daily reality of companies that have committed capital, built facilities, hired workers, and bet their futures on a functioning continental system. Those companies are not at the table. They should be.

Not to replace the diplomats. Not to shortcut the process. But because the people with real skin in the game — the ones who cannot walk away from a poorly designed agreement — tend to find solutions that political cycles, by design, cannot afford to reach.

NA77 was built for this moment. Not to watch the negotiations from the outside. To push the narrative of integration further than any trade agreement can carry it alone — beyond tariff schedules, beyond political mandates, toward the continent this shared work has already made possible.

We are not crossing our fingers. We are building the case, one issue at a time, until the table is wider.

— Eduardo Joffroy G · Founder, The North American — 77 · May 10, 2026

— versión en español (Solo Long View)—

⚪ THE LONG VIEW — By Eduardo Joffroy G

Los que Realmente Arriesgan Merecen un Lugar en la Mesa

El déficit energético, la complejidad de la reforma aduanera y las brechas de infraestructura en la cadena de suministro de México no son abstracciones. Son la matemática cotidiana de cada desarrollador industrial que retiene permisos en Monterrey, de cada fabricante que calcula si la próxima instalación va en Querétaro o en algún otro lugar. El nearshoring continúa — pero el capital sigue la estabilidad a largo plazo. Sigue las reglas claras, la energía confiable, el estado de derecho, el agua disponible y la infraestructura que está lista antes del anuncio, no años después. Cuando esas condiciones se vuelven inciertas, la inversión no desaparece. Se reubica.

Lo que resulta notable es cuánta de la integración de este continente ha ocurrido no gracias a las decisiones políticas, sino a pesar de los ciclos políticos. Los operadores, los constructores, los equipos de logística, los ingenieros — no esperaron el 1 de julio. Votaron con sus cadenas de suministro, sus declaraciones de cumplimiento, su capital. Construyeron el hardware de la integración norteamericana mientras las conversaciones institucionales luchaban por seguir el ritmo.

Por eso la revisión del T-MEC, tal como está estructurada, es una conversación incompleta. El billón trescientos mil millones de dólares en comercio anual que fluye a través de estas tres fronteras no es una abstracción — es la realidad diaria de empresas que han comprometido capital, construido instalaciones, contratado trabajadores y apostado su futuro a un sistema continental que funcione. Esas empresas no están en la mesa. Deberían estarlo.

No para reemplazar a los diplomáticos. No para saltarse el proceso. Sino porque las personas con algo genuinamente en juego — las que no pueden alejarse de un acuerdo mal diseñado — tienden a encontrar soluciones que los ciclos políticos, por su naturaleza, no pueden permitirse alcanzar.

NA77 fue diseñado para este momento. No para observar las negociaciones desde afuera. Para empujar la narrativa de la integración más lejos de lo que cualquier acuerdo comercial puede llevarla por sí solo — más allá de los aranceles, hacia el continente que este trabajo compartido ya ha hecho posible.

No estamos cruzando los dedos. Estamos construyendo el argumento, un tema a la vez, hasta que la mesa sea más amplia.

— Eduardo Joffroy G · Fundador, The North American — 77 · 10 de mayo de 2026

ONE FUTURE. THREE NATIONS. The North American — 77 publishes every Sunday — intelligence, analysis, and the long view on the continent that is still becoming itself. Forward this to one person who needs to be reading it. → Subscribe free at northamerican77.substack.com

The July 2026 USMCA review is two months out. The three-nation framework holding North America together is being stress-tested by tariffs, bilateral sidelines, federal indictments of Mexican officials for cartel collaboration, and oil near $105. This week, the continent showed its fracture lines — and the forces that will define the next decade.

From the Editor

“The continent is not breaking apart. But it is sorting itself. The question is whether the builders are faster than the breakers. This week’s Signal suggests they might be — barely.”

The Signal

Trade Policy · AmCham Mexico · SeaVantage · The Economist · The Bridge

The 46% Nobody Is Talking About

The announced reduction from 50% to 25% on Section 232 derivative tariffs generated predictable headlines. The operative number is not 25. When the five new rate tiers are weighted against the actual distribution of US-Mexico and US-Canada bilateral metals trade, the effective tariff lands at roughly 46%. The gap between what Washington announces and what operators pay has become the defining feature of this trade environment.

“Weighting the five new rate tiers by where bilateral US-Mexico and US-Canada metals trade actually sits, the effective tariff lands at roughly 46%, not 25%.”

— Dr. Daniel Covarrubias · The Bridge · Texas A&M International University · May 1, 2026

The auto sector received the cleanest outcome — a separate Section 232 action adopted USMCA’s content-tracing logic, a genuine structural win for North American manufacturing. The metals proclamation did not follow that logic. The gap is real and priced into every procurement decision in the corridor right now.

The broader picture favors Mexico. AmCham Mexico shows Mexico operating at an effective U.S. tariff rate of 8.28% — versus over 39% for China. On $976 billion in annual bilateral trade, that differential is the strongest structural argument for the nearshoring thesis. The Economist calls the July 2026 USMCA review the highest-stakes trade negotiation since NAFTA. The advantage is real. It does not survive a failed review.

SeaVantage’s vessel tracking shows port congestion building at U.S. West Coast and Gulf entry points — importers front-loading ahead of anticipated rate escalations. The surge is compressing cross-border capacity on the Laredo corridor. It will normalize. Price the volatility into Q3 logistics contracts now.

Canada imposed C$15.6 billion in retaliatory tariffs on U.S. steel and aluminum. Mexico has not. Two nations, same window, different instruments — and that asymmetry will define the starting position of every conversation inside the July review.

~46%

Effective rate on USMCA steel/aluminum derivatives — vs. 25% headline · Source: The Bridge

8.28%

Mexico’s effective U.S. tariff rate — vs. 39%+ for China · Source: AmCham Mexico

$976B

Annual US-Mexico bilateral trade · Source: AmCham Mexico

Why it matters: Operators cannot price on headlines. The effective rate is the business reality. Mexico’s tariff advantage over China is structural — and conditional on the July review. Build your scenario plans around what it delivers, not what it promises. And subscribe to The Bridge. The corridor needs more analysis that shows the math.

Geopolitics · Perplexity / Multiple Sources

USMCA Was Three Nations. The Review Is Two.

The July 2026 USMCA review has shifted from a routine institutional exercise into something more consequential: high-stakes bilateral negotiations between the U.S. and Mexico, with Canada notably sidelined from the initial talks. If trilateral consensus fails, the architecture defaults to annual reviews — a slow erosion of the rule-based predictability that made the corridor attractive to capital in the first place.

U.S. indictments of Sinaloa’s governor and former officials for cartel collaboration have introduced new friction into an already compressed diplomatic timeline. Trade talks and security politics are now running on the same track. Trump’s broader geopolitical posture — Venezuela intervention fallout, BRICS military exercises in the hemisphere — is testing U.S.-Canada alliance cohesion at the worst possible moment for trilateral unity.

The IMF has trimmed 2026 global growth to approximately 3.1%. Oil near $105 a barrel embeds a persistent logistics cost premium across the continental economy. U.S. retail gasoline averaging $4.23/gallon generates political pressure that could destabilize the review timeline unpredictably.

Why it matters: A bilateral USMCA is not USMCA. The three-nation framework is the architecture’s value. When Canada is sidelined, every investment thesis built on continental integration has to be recalibrated. The question for operators: are you building for the continent that exists, or the one the agreement promised?

Geopolitics & Rule of Law · U.S. Department of Justice · NA77 Editorial

The Indictments Are Not the Story. The System They Describe Is.

When the U.S. Department of Justice named Sinaloa Governor Rubén Rocha Moya in a federal indictment for cartel collaboration, Washington did not merely accuse a state official of corruption. It named a Morena governor — a member of the governing coalition of the Mexican state. The cartels in Mexico are not a criminal layer sitting beneath governance. In too many territories, they are governance: through municipal contracts, electoral support, judicial intimidation, and the quiet collaboration of officials who have no safe alternative. When the U.S. names a sitting governor, it is not pointing at one corrupt individual. It is pointing at a system national in scope.

The Trump administration’s FTO terrorist designation of major Mexican cartel networks changes the legal architecture of U.S.-Mexico security cooperation entirely. U.S. law now authorizes financial, intelligence, and potentially kinetic tools previously unavailable. Mexico’s political class understands this. Some are afraid. They should be.

The Morena Question

Morena was built as a movement of national dignity — against the elite networks that governed Mexico through institutional corruption, and against foreign interference in Mexican sovereignty. That identity now faces its most serious internal contradiction: if the governing coalition contains officials whose collaboration with designated terrorist organizations is a matter of U.S. federal record, the sovereignty narrative fractures from the inside. This is not an external attack on Morena. It is a mirror.

On Trump’s unpredictability: Trump’s greatest leverage over Mexico is not any specific action. It is the permanent uncertainty about what comes next — at what moment, through what mechanism, with what escalation. The indictments may be followed by sanctions, deportation operations calibrated for political embarrassment, or nothing for weeks. The uncertainty itself is the instrument. Mexico is permanently on defense — and that is exactly where Trump wants it.

What should Presidenta Sheinbaum do? The honest answer is uncomfortable: do what the institution requires, not what the coalition permits. Acknowledge the indictments with the gravity they deserve. Initiate a credible process within Morena to address cartel-affiliated officials. Signal to Washington — quietly but clearly — that Mexico is a willing partner in reducing cartel influence within the governing apparatus. The political cost of cooperation is real. The cost of defiance, when the adversary holds a terrorist designation and controls the largest economy on your northern border, is potentially catastrophic.

The indictment timeline and the electoral calendar are now on the same track. With state elections approaching and the 2027 legislative cycle ahead, every new accusation narrows Morena’s political space. The party that came to power promising to end systemic corruption is now defending officials accused of cartel collaboration in U.S. federal court.

For every CEO in Stuttgart, Seoul, Chicago, Montreal, Monterrey or Detroit, making capital allocation decisions: the question is no longer whether Mexico has a cartel problem. It is whether Mexico’s government has the will to separate itself from that problem before the bilateral relationship deteriorates to the point where the investment thesis is at risk.

What This Means for Operators — Garrigues Mexico

Garrigues Mexico’s compliance brief on the FTO designation is required reading for any company operating in the corridor. Under U.S. law, organizations providing “material support” to FTO-designated entities face criminal and civil liability — with U.S. jurisdiction explicitly expanded to cover acts occurring outside U.S. territory. Action items: enhanced due diligence on all Mexican counterparties and logistics providers; updated AML/CTF protocols calibrated for high-risk corridors; supply chain resilience standards accounting for cartel territorial control; and a documentation framework establishing what your organization knew, when, and what steps it took. The window of plausible deniability is closed.

Why it matters: The FTO designations are not rhetorical gestures. They are a legal architecture change that gives the U.S. government tools it did not have before — and that Mexico’s political class cannot ignore. The USMCA review, the FDI thesis, the nearshoring corridor — all of it sits downstream of one question: can Mexico’s government credibly separate itself from cartel influence before Trump decides the answer is no?

Investment · Invest MTY · Expeditors Horizon · Perplexity

$40.87 Billion. In a Year of Tariff Volatility.

Mexico logged record foreign direct investment of $40.87 billion in 2025. Not a number that fits the hesitation narrative. It is long-duration capital from automotive assemblers, advanced manufacturers, and semiconductor-adjacent suppliers — betting on Mexican geography within the USMCA corridor regardless of Washington’s tariff posture in any given quarter.

$40.87B

Mexico FDI in 2025 — a record, driven by automotive and advanced manufacturing

Editorial Perspective

A record FDI number is a bet — not a verdict. Mexico must resist the temptation to read $40.87 billion as confirmation. It is an invitation, conditional on delivery. The foreign capital now planted in Mexican soil will either grow into a generational transformation or quietly exit to the next geography that offers what Mexico promises but cannot yet guarantee.

The honest ledger: supply chain infrastructure outside Northern and Central Mexico’s industrial triangle remains underdeveloped for the volume now being demanded. The legal system has not kept pace with the investment thesis being sold to boardrooms around the world. Energy — electricity, water, gas — is a persistent constraint, made more acute by a state-owned CFE and Pemex that are not delivering at the scale the moment requires. Security remains a negotiated reality in too many corridors. And the domestic economy is not keeping pace: internal consumption is weak, a disproportionate share of the population remains unbanked, and GDP per capita is far from the threshold a prosperous country requires.

Mexico’s economy is heavily sustained by FDI — which makes every Morena political decision a make-or-break moment for the nation’s economic trajectory. Pemex is in losses and deep debt. The moment FDI loses confidence, there is no domestic engine large enough to fill the gap. Mexico needs urgent supply chain infrastructure and energy investment to maintain its attractiveness — not in five years. Now.

On the ground, the corridors are performing. Invest MTY shows Monterrey’s industrial vacancy below 3.5% — effectively full. More than 100 Japanese companies now operate in the metro area. France’s cumulative FDI in the corridor has surpassed $218 million since 2006. The capital is there. The question is whether the infrastructure and institutions can keep pace with it.

On logistics, Expeditors’ Gervasio Verdaguer identifies the four port corridors that will carry the nearshoring volume: Manzanillo (Latin America’s largest container port), Lázaro Cárdenas (Pacific deep-water industrial gateway), Altamira (Gulf, energy and automotive supply chains), and Veracruz (the historic Gulf gateway being modernized for container growth). Mexico’s 13 free trade agreements covering 50 countries are an underused competitive advantage. The multimodal infrastructure is improving. It is not yet where it needs to be for the volume projected over the next decade.

Why it matters: Capital is patient for a reason — it expects structural return. The investors building in Saltillo and Querétaro are not doing Mexico a favor. They are making a calculated bet that Mexico will close the gap between its geographic advantage and its institutional capacity. If that gap closes, Mexico becomes something historically rare: a developing country that seized its inflection point. If it doesn’t, the window will have closed without a country on the other side of it.

Energy · Perplexity

The Bridger Approval and What It Signals

Trump has approved the Bridger Pipeline Expansion — 550,000 barrels per day of Canadian crude moving southward, reviving the debate Keystone XL made famous and never resolved. Cross-border energy infrastructure is back as a strategic instrument, not just an operational asset.

At $105 oil and $4.23 retail gasoline, North America’s energy interdependence is visible in every fuel receipt on the continent. The corridor is not energy-independent. It is energy-integrated — which means shocks in one node travel fast. The Bridger approval signals that the U.S. still needs Canadian supply, regardless of its tariff posture. That asymmetry matters.

Why it matters: Energy flows are the continent’s circulatory system. Political noise around tariffs operates on a shorter cycle than a pipeline. Build for the pipeline timeline.

Supply Chain & Technology · Supply Chain Brain · Cargado · Manifest 2027

The Machines Are Not Waiting for the Review

Supply Chain Brain’s 2026 industry survey found that 70% of North American shippers expect 5–15% growth over the next two years — in a tariff environment most analysts assumed would suppress confidence. The more consequential finding: agentic AI is no longer a pilot program in logistics. It is embedded into the operational core — demand sensing, carrier selection, exception management, last-mile rerouting.

On the cross-border corridor, Cargado’s freight data shows Laredo volumes tightening — a direct consequence of the front-loading surge SeaVantage is tracking at the ports. Operators relying on Laredo for just-in-time replenishment should be watching this closely. The tightening is not fully priced into forward planning cycles.

The physical infrastructure of North American commerce is being quietly rewired by capital and code. This week’s moves: Home Depot acquired Simpl Automation to accelerate warehouse automation across its distribution network. Siemens and KION are partnering on AI-powered digital twins for warehouse operations — compressing the decision cycle for capital-intensive logistics infrastructure. Kodiak AI and Bosch have begun hardware deliveries for autonomous freight trucks, stepping from pilot to commercial-scale deployment on the Laredo-to-Chicago corridor. Rivian is repurposing old EV batteries to power its Illinois factory — the largest repurposed battery storage system for a U.S. automaker, in partnership with Redwood Materials.

Investor signal: Sereact raised a $110M Series B for AI warehouse robotics. Eclipse closed a $1B fund focused on physical industries. Avery Dennison put $75M into Wiliot’s IoT supply chain sensors. Capital is flowing toward the physical layer of North American commerce — not away from it.

Why it matters: The automation wave is not a future threat. It is a present competitive differentiator. Corridor operators who deploy fastest will set the cost floor. Everyone else will defend against it.

The Intelligence Frontier

Space · AI · Technology · SpaceX / NVIDIA / Anthropic / xAI · NA77 Intelligence Watch

The Continent’s Other Build — Chips, Models, and Rockets

While the policy debate centers on tariffs and treaty timelines, a parallel set of organizations is building the infrastructure of the next economy — on this continent, right now.

SpaceX · Starbase, Boca Chica, Texas — Starbase sits on the Rio Grande, in Cameron County, at the US-Mexico border. The V3 vehicle — Booster 19, Ship 39, Raptor 3 engines — stands 408 feet tall, designed to carry over 100 tons to low Earth orbit. Flight 12, the first V3 test, is targeting mid-May. The continent’s most ambitious manufacturing program is being built at the border, not in spite of it. The economic spillover into South Texas and Tamaulipas from this concentration of engineering talent and supply chain activity is a story North America has barely begun to tell.

NVIDIA · Vera Rubin Platform — Six new chips delivering a 3-to-4x improvement in compute density over Blackwell, reducing AI inference token costs by roughly 90%. NVIDIA projects the total AI infrastructure market at $1 trillion by 2027. The practical meaning for corridor operators: the compute floor is collapsing. What required a data center budget last year will run on a workstation budget next year. Organizations that understand this will compress decision cycles in ways that competitors will struggle to catch.

Anthropic · Claude — Claude Opus 4.7 is now generally available with improvements in complex long-horizon tasks. Claude Design launched for visuals, prototypes, and one-pagers, with creative connectors live for Blender, Autodesk Fusion, Adobe Creative Cloud, and Ableton. Harvard’s Faculty of Arts and Sciences moves from ChatGPT Edu to Claude for institutional AI access. The NA77 Signal is human led & Claude built — and the compression of editorial workflows that used to require teams is available to every operator and organization in the corridor willing to use it.

SpaceX / xAI · Structural Consolidation — xAI has been merged into SpaceX, combining orbital launch capability with large-scale AI inference, targeting an IPO in June 2026 at a reported valuation of $1.75 trillion. In federal court this week, testimony confirmed that xAI’s Grok was trained on OpenAI models — a disclosure with significant implications for how the AI competitive landscape is understood. The consolidation of space and AI under one North American private entity has no clear precedent. Watch it with clear eyes, whatever one thinks of the individuals involved.

Why it matters: The treaty, the tariffs, the security crisis — these are the operating conditions of today’s corridor. The compute platforms and launch infrastructure being built right now are the operating conditions of tomorrow’s. North American leaders who engage only with today’s policy debate will find themselves governing a continent they no longer recognize.

World Cup 2026 — Continental Countdown

FIFA World Cup 2026 · Mexico / United States / Canada · NA77 Readiness Watch

40 Days Out. Is North America Behaving Like One Continent?

FIFA WORLD CUP 2026 — NORTH AMERICA · JUNE 11 – JULY 19CANADAToronto · VancouverUNITED STATES11 cities · MetLife Final · July 19MEXICOAzteca · BBVA · Akron104 matches · 48 teams · 16 host cities · 40,000 jobs · $5B+ projected economic activity across North America

On June 11, the world arrives in North America. Mexico opens at Estadio Azteca — Mexico versus South Africa — in the first World Cup in history co-hosted by three nations. The final is July 19 at MetLife Stadium. Between those two dates, three nations, 48 teams, and a global television audience will form their opinion of this continent’s capacity to function as a shared enterprise.

The readiness picture is mixed. At least three host cities received formal FIFA notices flagging incomplete transportation or fan zone infrastructure. In Kansas City, light rail capacity expansions remain only partially complete. The U.S. Department of Transportation has allocated $220 million for transit corridor improvements; FEMA is distributing $625 million in security grants to host city committees. These are significant commitments. Whether they translate into seamless cross-border execution is a different question.

Mexico’s three host cities tell different stories. Mexico City opens the tournament at the Estadio Azteca with 100,000 security personnel deployed — though a shooting at Teotihuacán in April accelerated security mobilizations with less than 60 days remaining, a reminder that security commitments and security reality in Mexico are not always the same variable. Guadalajara will manage. Monterrey is attempting something larger: Governor Samuel García’s FIFA Corridor links the airport, Estadio BBVA, and Parque Fundidora through redesigned mobility — 2,200 eco-friendly buses, 400 new TransMetros, and the centerpiece Metro Lines 4 and 6, expanding from 38 to over 80 kilometers of rail. As of late 2025, both lines were approximately 60% complete. Whether the system opens at full capacity, partial capacity, or ceremonially on June 11 will tell us a great deal about the gap between Mexico’s infrastructure ambition and its delivery capacity.

The NA77 Question

If Monterrey delivers — if the monorail runs, the FIFA Corridor flows, and the city handles the crowd with the sophistication of a genuinely world-class industrial metropolis — it will be one of the most meaningful infrastructure legacies any Mexican city has produced in a generation. The window to use a once-in-a-generation global event as a permanent transformation catalyst is narrow, and it only opens once.

The structural risk is not the stadiums or the hotels. It is the seams between systems. A fan traveling from Toronto to Monterrey to New York for three group stage matches crosses two international borders, three immigration regimes, and multiple transit systems not designed to work together. The three nations have coordination structures. What they do not clearly have is a shared operational command that treats the 40-day tournament as a single continental logistical event.

The NA77 Argument

The more unified the security and operational response across the three nations, the safer every fan in every city will be. A threat that originates in one country and travels to another — a coordinated attack, a public health emergency, a massive crowd incident — requires a response architecture that does not stop at a border. If the three nations cannot build that architecture for 40 days of football, the question of whether they can build it for the harder challenges ahead becomes very difficult to answer optimistically.

North America has spent thirty years proving it can integrate around trade. The 2026 World Cup is the first test of whether it can integrate operationally — on security, mobility, and public safety. Whether the three governments look at July 20 and ask “what did we learn, and how do we build on it?” is the question that will determine whether 2026 is a moment or a milestone.

Why it matters: North America is good at trade. The 2026 World Cup is a 40-day test of whether it can go further — from commercial partners to genuine operational collaborators. A successful tournament, coordinated across borders with visible fluency, would do more for the narrative of North American integration than any trade agreement in thirty years. The continent will learn something about itself. The question is whether its leaders are paying attention.

On the Radar

July 2026

USMCA Review Deadline. The pivot point for North American trade architecture. Trilateral consensus or bilateral fragmentation. The most consequential policy moment for the continent this decade.

Sept 27–29

North Capital Forum 2026 — Mexico City. Led by Enrique Perret, CEO of the US-Mexico Foundation, NCF 2026 convenes CEOs, government leaders, legislators, and innovators for three days on the future of North America — trade, energy, technology, and supply chains. This is where the continent’s builders gather and where the conversations that shape the corridor actually happen. We are proud to support Enrique’s work and encourage every reader building across the border to put September 27–29 on the calendar.

Feb 8–10, 2027

Manifest 2027 — Las Vegas, Nevada. The continent’s defining logistics and supply chain innovation conference returns to The Venetian, presented by DHL. Courtney Muller, President of Manifest, has built what is now the essential annual gathering for freight technology, capital, and operational intelligence in North American commerce — 7,200+ attendees in 2026. If you are building in the corridor, this is where the intelligence concentrates and where the relationships that shape the next year get made. Put February 8–10 on the calendar now.

Ongoing

Semiconductor supply chain resilience. Supply Chain Brain’s 2026 intelligence series focuses on structuring for the next shortage cycle — not just managing the current one. The continental bet on U.S. and Mexican semiconductor-adjacent manufacturing is the long play underneath the tariff noise.

The Long View

By Eduardo Joffroy G · The North American — 77

The Game Needs a Fair Referee. North America Must Decide Whose Side It’s On.

Business and trade are energy. They are trust in motion. When you stop them — even for a reason that seems good in the room — you do not pause an economy. You drain it.

North America has three players in this game. The question — this week and every week this Signal publishes — is whether each of them is bringing their A game. From the private sector and from the public sector. From the boardroom and from the government. Because when a referee stops calling the game fairly, when rules shift mid-play, when one team receives preference — the whole game suffers. The players adapt around it. But the cost compounds.

The United States is not waiting. Its private sector is moving with the urgency the moment demands. On the Rio Grande at Boca Chica, Texas, SpaceX is building Starship — the most ambitious spacecraft in human history — steps from Mexican territory. In Arizona, TSMC and Intel are building the semiconductor cluster that will supply the AI economy for the next decade. The capital is flowing. The compute is being built. The infrastructure of the next era is rising at the edges of the North American continent, looking south and north for partners who are ready to receive it.

Canada has the natural assets to be indispensable. Vast clean hydroelectric power that could feed the energy-hungry data centers the AI economy demands. Critical minerals essential for semiconductor supply chains. Institutional capacity and rule of law that Mexico cannot match at present. What Canada needs right now is a clearer vision of what it is building — and for whom. Its tariff retaliation posture is tactically understandable. Strategically, it risks the continental architecture that benefits Canada most.

Mexico’s situation is the hardest to write honestly — because the honest assessment is uncomfortable. Mexico’s private sector is performing. The $40.87 billion in FDI, the Ternium steel mill in Pesquería, the Japanese companies filling Monterrey’s industrial parks to below 3.5% vacancy — this is Mexico’s private sector bringing its A game, against real odds, in a difficult environment. The problem is not the private sector. The problem is the public sector that is not showing up to the same game.

SpaceX is building Starship minutes from Mexican territory. TSMC and Intel are constructing the semiconductor future in Arizona — close enough that Sonora should be a logical manufacturing extension. The world is not happening far away from Mexico. It is happening on Mexico’s doorstep, under Mexico’s nose, with Mexico’s geographic destiny on the table. And Mexico is watching it through a window it has not fully chosen to open. How can a country be so close geographically, and so far from its neighbors in national vision?

What Capital Is Expecting

Business is happening. Investments are being made. The bets are on North America. What capital expects in return is not complicated: legal protection that holds in court, modern infrastructure at the volume being demanded, an effective financial system, strong business clusters, proximity to market, and the overall efficiency that lets companies here compete with the world — not just with each other. That is the contract. North America must decide whether it intends to honor it — not as a declaration, but as an operating reality.

The AI Age is not primarily about deploying tools. It is about understanding the paradigm shift — and moving to capture the opportunities the shift creates before someone else does. The world is automating. It is competing at a speed and scale that requires reliable energy, manufacturing proximity, educated labor, and institutional agility. AI data centers alone will consume more electricity over the next decade than many nations currently produce. This is not a technology story. It is an infrastructure, energy, and governance story.

Both Mexico and Canada have more to gain from positioning themselves as first suppliers for the United States’ AI global ambitions than from any trade negotiation currently on the table. Mexico has the geographic position, the industrial corridor, the labor force — and, beneath a governing philosophy that looks inward, the solar and wind potential to power the data centers that will define the next economy. Canada has the hydroelectric power, the critical minerals, and the institutional credibility. The opportunity is there for both nations. It does not wait for political cycles to resolve themselves.

Mexico’s public sector is the variable — and it is the one that Mexico controls. An energy policy that opens CFE to private and international investment, rather than defending a Pemex bleeding losses and deep debt, would change the investment equation overnight. A governing coalition that stops defending cartel-affiliated officials and starts building digital infrastructure and AI readiness could accelerate Mexico’s position in a single legislative cycle. The private sector is ready. The capital is ready. Geography has already placed Mexico next to the most powerful economy on earth. What is missing is not opportunity. It is the decision to honor it.

North America must act as North America. Not three nations managing each other’s expectations — one continental economy choosing to compete with the world. The players are ready. The capital is in. The World Cup is coming. All that is missing is the decision to let the game run.

— Eduardo Joffroy G · Founder, The North American — 77 · May 3, 2026

ONE FUTURE. THREE NATIONS.

This week’s Signal is heavier than most — and deliberately so. The continent is carrying a full load: a trade treaty being stress-tested, a governing coalition facing federal indictments, record investment in a country being asked to prove it deserves it, a World Cup 40 days out that will test whether three nations can actually behave as one, and a technological infrastructure being built at the border and in the data centers that will define the corridor for decades. North America is not a simple story. It never was. The work of this publication is to tell it honestly — and to keep finding the people who are building it right.

NA77 Signal is curated weekly intelligence on what’s moving North America — trade, energy, capital, technology, and the people building across the corridor.

Published every Sunday. Written by the NA77 Team from Tucson, Monterrey, and the road between them.

NA77 LinkedIn

Penn Wharton Budget Model — Effective Tariff Rates, April 15, 2026

Tetakawi — The USMCA 2026 Review: What Manufacturers Actually Need to Prepare For

That is the USMCA compliance rate as of February 2026. Up from roughly 45% a year ago. The corridor is not waiting for the politicians. It never does.

This week’s Brief also covers the $3.3 billion clean energy groundbreaking in Topolobampo, the CIA incident in Chihuahua, Canada’s uranium move, the Colorado River, and the diplomatic exchange between Ambassador Johnson and President Sheinbaum that no one is talking about clearly enough.

Read the full Sunday Brief →

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Seventy days before the July 1 deadline, the USMCA is not one negotiation — it is two, moving at entirely different speeds.

US Trade Representative Jamieson Greer flew to Mexico City last week. Talks are live, bilateral, and concentrated: rules of origin in autos, energy market access, and disciplines on nonmarket inputs. Mexico is at the table. The conversation is hard, but it is happening.

Canada is a different story. Ambassador-level communications have reportedly stalled since fall 2025. Prime Minister Mark Carney said this week what was previously only whispered in Ottawa's briefing rooms: that Canada's once-strong economic ties to the United States have become a structural weakness that must be corrected. Carney named a $1 trillion investment plan contingent on USMCA clarity — then, in the same breath, launched a formal diversification strategy away from the US.

The three-nation framework is under stress it was not designed to absorb. The risks of a bifurcated North America — one with a functional US-Mexico corridor and a fractured US-Canada relationship — are real, and underappreciated.

What to Watch: Canada's new US Advisory Council holds its inaugural meeting on April 27. Whether that session opens or forecloses dialogue will signal how the final sprint to July 1 unfolds.

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🟠 TRADE & POLICY DESK

The USMCA joint review, launched March 18 in bilateral rather than trilateral format, is narrowing around three fault lines: automotive rules of origin, energy sector access, and China-linked supply chain disciplines.

On energy, Washington's position has clarified. US negotiators are explicitly targeting CFE's mandatory 54% ownership stake in mixed-generation projects, LitioMx's constitutional monopoly over lithium, and PEMEX's preferential treatment in the hydrocarbons permit process. These are not peripheral asks — they go to the structural architecture of Mexico's energy reform.

Mexico's opening posture: sovereign energy policy is non-negotiable. But President Sheinbaum's administration has signaled flexibility on the margins — particularly on private co-investment structures that don't require changing constitutional language.

Ambassador Greer has been unambiguous: he will not recommend USMCA renewal to the president without concessions. The base case among analysts remains a painful extension — negotiated under pressure, stretched into late 2026 — rather than a comprehensive renegotiation.

Data: USMCA compliance rates among Mexican manufacturers surged from 45% to 89% since the agreement's signing. The economic integration the review is supposed to protect is already working.

→ Deeper read: https://www.csis.org/analysis/usmca-review-2026-six-scenarios-north-americas-future

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🟡 INVESTMENT WATCH

Mexico climbed six positions in Kearney's 2026 Foreign Direct Investment Confidence Index — from 25th to 19th globally — one of the largest single-year gains on record. The signal: investors are still moving toward North America, and Mexico is the entry point they're betting on.

The first concrete proof of Plan México's execution arrived this week. President Sheinbaum inaugurated a 53-hectare industrial polo in Huamantla, Tlaxcala — $540 million in committed investment, designed to generate more than 6,000 direct and indirect jobs. Plan México's portfolio totals $277 billion across roughly 2,000 projects through 2030. Huamantla is one of the first to break ground.

But the execution gap remains the central challenge. FDI inflows hit a record $40.9 billion through the first three quarters of 2025. Manufacturing wages of approximately $4.90 per hour remain 25% below China's. Announced projects outnumber completed projects by a ratio that keeps infrastructure economists up at night.

The bottleneck is not capital and it is not labor. It is power. CFE's reliability constraints — reserve margins that have fallen below the 6% safety threshold in recent months — continue to throttle the pace of industrial buildout.

Data: Mexico needs an estimated $5.6 billion in new generation and transmission investment to meet projected industrial demand through 2028. CFE's budget cannot absorb that number alone — private participation is not optional, it is arithmetic.

→ Deeper read: https://www.csis.org/analysis/nearshoring-without-growth-why-investment-uncertainty-holding-mexico-back

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🔵 POWER & RESOURCES

The Bureau of Reclamation's April 2026 report landed this week without ceremony and without good news. Lake Mead sits at 1,064 feet — a Level 1 Shortage condition — and Bureau projections have the lake declining toward 1,055 feet by year-end, 20 feet below the shortage determination trigger.

The compounding factor: this year's snowpack across the Colorado River basin is the lowest on record. March temperatures broke historical averages across the Upper Basin. Lake Powell's inflow forecast sits at 2.78 million acre-feet for the water year — 29% of historical average, and among the lowest on record. The Bureau will cut Powell releases to the legal minimum to protect Glen Canyon Dam's generating capacity. The consequence: Hoover Dam could produce 40% less electricity by this fall.

The Colorado River system — at 36% of total storage capacity — supplies water to seven US states, 30 tribal nations, two Mexican states, and roughly 40 million people. It also anchors the Sonoran Desert agricultural production that feeds cross-border supply chains.

AI data centers are adding pressure from a direction this infrastructure was never designed for. The compute buildout behind the Anthropic-Amazon partnership alone will require gigawatts of reliable power — power that a drought-stressed western grid cannot guarantee.

Data: The Colorado River system has run an average structural deficit of 12.3 million acre-feet per year since 2000, against the 1922 Compact's 15-million-acre-feet framework — a gap no amount of conservation can fully close without re-engineering the compact itself.

→ Deeper read: https://www.usbr.gov/lc/region/g4000/24mo.pdf

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🟢 INNOVATION CORRIDOR

The week's largest infrastructure deal was not a highway or a port. It was a compute agreement.

Anthropic announced an expanded partnership with Amazon that secures up to 5 gigawatts of compute capacity for training and deploying Claude — the AI model that now commands White House attention. Anthropic's 10-year commitment to AWS is valued at more than $100 billion. Amazon is investing $5 billion immediately, with an option for up to $20 billion more.

White House chief of staff Susie Wiles met with Anthropic CEO Dario Amodei this week about Claude Mythos, the company's new flagship model — a system with 10 trillion parameters designed for advanced reasoning, cybersecurity, and coding at national-security scale. The federal government's interest is not incidental.

Meanwhile, NVIDIA's Rubin platform entered commercial focus, promising to accelerate agentic AI inference at up to 10 times lower cost per token than the Blackwell generation. The model competition is maturing into a compute and supply chain competition — and those supply chains run through North American manufacturing corridors.

Monterrey, Guadalajara, and Mexico City are positioning to capture the hardware side of this buildout. The AI semiconductor assembly and advanced electronics manufacturing that Mexico is recruiting is not a separate conversation from the USMCA energy talks. It is the same conversation.

Data: The Anthropic-Amazon partnership commits more than $100 billion to AWS infrastructure over 10 years — a capital deployment that rivals the GDP of most Central American nations combined.

→ Deeper read: https://www.technologyreview.com/2026/01/05/1130662/whats-next-for-ai-in-2026/

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🟣 THE PEOPLE FACTOR

The US labor market's structural shift is not a policy debate anymore. It is a number.

Since January 2025, the US has recorded a net loss of approximately 596,000 foreign-born workers from the civilian labor force — a reversal that has no modern precedent. US net migration turned negative in 2025 for the first time in roughly half a century. The BLS March 2026 Employment Situation report confirms the trend has not reversed.

The sectors absorbing the shock are exactly the ones North America's nearshoring thesis depends on: construction, agriculture, food processing, logistics, and light manufacturing. These are not industries that can wait for a domestic labor pipeline to refill. They operate at the speed of supply chains, not at the speed of workforce development programs.

Mexico's demographic position stands in direct contrast. With a median age of approximately 29 years, Mexico holds what may be the continent's most underutilized asset: a young, increasingly skilled workforce being actively competed for by Asian and European manufacturing interests — not just North American ones.

The window for integrating Mexican labor capacity into North American manufacturing at scale is not indefinite. It is a decade, perhaps less.

Data: Foreign-born workers in the United States recorded an unemployment rate of 4.2% in 2024 — and the population itself is now contracting. The domestic labor force cannot cover the gap at current immigration policy levels.

→ Deeper read: https://www.bls.gov/news.release/pdf/empsit.pdf

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⚪ THE LONG VIEW — By Eduardo Joffroy

The Announcement Is Not the Investment

In Huamantla, Tlaxcala — a mid-sized city two hours from Mexico City that most international investors could not find on a map six months ago — a ribbon was cut this week. Fifty-three hectares. Six thousand jobs promised. Half a billion dollars committed on paper. President Sheinbaum was there. The cameras were there.

What was not there, in sufficient quantity, is reliable electricity.

This is the central paradox of Mexico's nearshoring moment, and it is worth saying plainly: the announcement infrastructure has outrun the physical infrastructure. Mexico has become extraordinarily competent at the ceremony of investment — the press conference, the presidential decree, the rendering of the industrial park — while the underlying power grid, the water systems, and in some states the rule-of-law environment have not kept pace.

I say this not as criticism of Mexico. I say it as someone who believes deeply in what this country can become — and who knows that the gap between what is announced and what is built is exactly where opportunity gets lost.

Plan México's portfolio totals $277 billion across 2,000 projects. The ambition is real. But ambition is a starting line, not a finish line. The execution bottleneck is CFE — Comisión Federal de Electricidad — a state utility constitutionally positioned as the dominant player in Mexico's energy market, without the private investment pathways or the capital base to meet industrial demand at nearshoring speed.

This is the "Hardware vs. Software" problem of North American integration rendered in concrete terms. The trade architecture — USMCA — is the software. It sets the rules, aligns the incentives, and creates the platform. But the hardware — the megawatts, the transmission lines, the industrial water systems, the logistics corridors — has to be built by someone, and it has to be built now.

The $5.6 billion that analysts estimate Mexico needs in new generation and transmission capacity is not a development challenge. It is a political choice. Private capital exists. The appetite among US, Canadian, and Mexican infrastructure investors for reliable, bankable energy assets in Mexico is real. What is missing is the regulatory pathway that allows that capital to flow into the grid without triggering the constitutional tripwires of the 2021 energy reform.

Seventy days before the USMCA deadline, that regulatory pathway is on the negotiating table in Mexico City. And that is, quietly, the most consequential conversation in North America right now — not because of what it will produce by July 1, but because of what it will signal for the next decade.

The continent is at capacity for announcements. What it needs now is megawatts.

The North American — 77 · April 22, 2026

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The North American — 77 · Affairs Morning Briefing · Published Monday, Wednesday & Friday at 7:30 AM CST

ONE FUTURE. THREE NATIONS.