The Rio Times — USA & Canada Report
Covering: Federal Reserve · Congress · Supreme Court · Tariffs · Labour Market · Housing · Canada USMCA · Energy · Midterms
What Matters Today
1
US Gasoline Hits $4.02 Per Gallon — Largest Monthly Surge in GasBuddy’s History as Diesel Reaches $5.45 and Consumer Pain Reshapes Midterm Politics
US Gasoline Hits $4.02 Per Gallon — Largest Monthly Surge in GasBuddy’s History as Diesel Reaches $5.45 and Consumer Pain Reshapes Midterm Politics
Today’s USA and Canada intelligence brief leads with the price Americans see every day. The national average for regular gasoline reached $4.02 per gallon on Tuesday — the first time US drivers have collectively paid this much since August 2022, following Russia’s invasion of Ukraine. The rise of $1.06 in a single month represents the largest monthly gasoline price increase GasBuddy has ever recorded. Diesel — the fuel that moves freight, delivers goods, and powers agriculture — hit $5.45 per gallon, up from $3.76 before the conflict began. Americans have collectively spent an estimated $8 billion more on gasoline since late February, according to GasBuddy’s petroleum analysis head Patrick De Haan.
The domestic impact is immediate and uneven. California drivers are paying $5.87 per gallon. Oklahoma drivers are paying $3.25. The variation reflects state taxes, refinery proximity, and supply logistics — but the political impact is universal. A Reuters/Ipsos poll found that 55% of households say their finances have been affected, with 21% reporting a “great deal” of impact. Fed Governor Waller’s observation that lower-income consumers are “making more frequent trips to stores with fewer purchases during each visit” captures the behavioural shift that $4 gas produces. The top 20% of earners — who own the majority of stocks and benefited from 2025’s market rally — remain resilient. The bottom 60% — who own 15% of stocks but account for 45% of consumer spending — are cutting back.
The policy response has been limited. The EPA temporarily waived summer restrictions on E15 gasoline (15% ethanol blend), effective May 1 through May 20, with possible extension. The administration is releasing oil from the Strategic Petroleum Reserve as part of the IEA’s coordinated 400-million-barrel global drawdown. Sanctions on Venezuelan and Russian oil have been temporarily eased. But analysts are blunt: these measures slow the surge, they do not reverse it. “The president doesn’t have a whole lot of levers,” De Haan said. Oil needs to start moving through Hormuz again for prices to fall meaningfully. If the strait remains blocked, analysts warn the national average could climb toward $4.50 or even approach the $5 record set in June 2022.
For Latin American investors, US gasoline prices are the single most important domestic political indicator in the world’s largest economy. When gas crosses $4, consumer confidence falls, retail spending contracts, and incumbent politicians lose elections. The $4 threshold arrived in a midterm election year, with Trump’s approval at historic lows (Story 4), and with Democrats campaigning on cost-of-living. The gasoline price also drives demand for Latin American crude: the US has eased Venezuelan sanctions specifically to access non-Hormuz supply. Ecuador’s heavy crude, Colombia’s output, and Brazil’s pre-salt all become more strategically valuable when the US is paying $4+ at the pump. As our previous USA and Canada intelligence brief noted, American energy prices transmit directly into Latin American export revenues — and into the political calculations that determine US trade policy.
2
Post-SCOTUS Tariff Landscape: Section 122’s 10% Tariff Expires July 24 — Congress Must Vote to Extend Before November Midterms, $175 Billion in Refunds Pending
Post-SCOTUS Tariff Landscape: Section 122’s 10% Tariff Expires July 24 — Congress Must Vote to Extend Before November Midterms, $175 Billion in Refunds Pending
The Supreme Court’s February 20 ruling in Learning Resources, Inc. v. Trump — holding 6-3 that IEEPA does not authorise presidential tariffs — has produced the most consequential reshaping of US trade policy since the original tariffs were imposed. All IEEPA-based tariffs terminated at midnight on February 24. Within hours, Trump invoked Section 122 of the Trade Act of 1974 to impose a replacement 10% tariff on most imports. But Section 122 carries a hard legal constraint that IEEPA did not: the tariffs must end within 150 days — July 24, 2026 — unless Congress votes to extend them. That vote must happen before the November midterm elections.
The fiscal and political arithmetic is staggering. Penn Wharton estimates that $164.7 billion in IEEPA tariffs were collected through January 2026, with the total potentially reaching $175 billion including February collections. Senate Democrats introduced legislation requiring full refunds with interest. Former Senator Sherrod Brown — running in Ohio’s special Senate election — is campaigning on “$1,336 refund for every Ohio household.” The Yale Budget Lab calculates that remaining tariffs (Section 232 on steel, aluminum, autos; Section 122 at 10%; Section 301 on China from the first term) add 0.6% to consumer prices and push unemployment 0.3 percentage points higher. Justice Kavanaugh warned in his dissent that the refund process will be “a mess.”
The July 24 expiry creates a political trap. If Congress votes to extend the Section 122 tariffs, every member goes on record supporting a tax that costs households $800-$1,300 per year — three months before midterms. If Congress lets them expire, the effective US tariff rate falls sharply, importers benefit, but the administration loses its primary trade leverage over China, the EU, and North American partners. Section 232 tariffs on steel (25%), aluminum (25%), and autos remain regardless — as do pending Commerce Department probes into semiconductors, pharmaceuticals, and drones that could produce new 232 tariffs. The tariff era is not over; it has been restructured.
For Latin American trade, the post-SCOTUS landscape is directly consequential. The IEEPA tariffs on Canadian and Mexican goods under USMCA are gone. The Section 122 replacement at 10% is temporary. Section 232 tariffs on steel and aluminum (50% for Canada) remain and hit Latin American metal exporters. The USMCA mandatory six-year review is approaching, and the SCOTUS ruling has changed the leverage dynamics: Trump can no longer threaten unlimited tariffs by executive fiat, forcing the administration to negotiate within statutory limits. For Brazilian steel, Mexican auto parts, Colombian goods, and Chilean copper, the tariff landscape is more predictable than at any point since January 2025 — but the July 24 cliff creates a three-month window of uncertainty that affects every supply chain decision. As our previous tariff coverage tracked, Latin American exporters should be positioning for either outcome.
3
US Payroll Employment Likely Fell in 2025 — Fed Governor Waller: “Only the Third Time Since 1945, Unrelated to a Recession”
US Payroll Employment Likely Fell in 2025 — Fed Governor Waller: “Only the Third Time Since 1945, Unrelated to a Recession”
The US labour market entered 2026 in worse shape than the headline numbers suggested — and the annual revisions confirmed it. Fed Governor Waller, in a February 23 speech on the economic outlook, revealed that the January employment report’s annual revisions “turned 2025 from a year with relatively weak job creation into one of the weakest years in decades outside of a recession.” Officially, 181,000 new jobs were reported for the full year — an average of only 15,000 per month. But Waller stated that even after those revisions, there likely remains an upward bias from April through December, and “it seems clear that payroll employment in the United States probably fell in 2025.”
The structural fragility is concentrated. Nearly 90% of net private job creation through late 2025 occurred in a single sector: healthcare and social assistance. In ADP data, firms with 250 or more employees added workers, while smaller firms shrank. The Philadelphia Fed’s Anna Paulson characterised the labour market theme for 2026 as “waiting for clarity,” noting that strong GDP growth (Q3 2025 at 4.4% annualised) is coexisting with a slowing labour market — a divergence that complicates the Fed’s dual mandate. Vice Chair Bowman described the labour market as “more fragile” beneath the surface, with hiring rates “concerningly low” even though layoff rates are also low, suggesting firms are “delaying major labour decisions.”
The consumer spending divergence amplifies the employment signal. Waller reported that retailers describe a “divergence between higher income shoppers, whose spending remains resilient, and lower- and middle-income customers, who are starting to spend less or switch to lower-cost goods.” The strong stock market gains of 2025 boosted wealth for the top quintile, who account for 35% of spending. The bottom 60% — who account for 45% of spending — “are relatively less affected by higher prices” according to research, but that research predates the $4 gasoline and $5.45 diesel that are now compounding their cost-of-living squeeze. The labour market that America carries into the midterms is one where jobs are scarce, the few being created are concentrated in one sector, and the consumers who drive the economy are splitting into two classes.
For Latin American investors, the US labour market matters because consumer spending accounts for roughly 70% of American GDP — and Latin American exports to the US are directly tied to that spending. When the bottom 60% of US households cut back, the first casualties are discretionary imports: Mexican manufactured goods, Colombian cut flowers, Peruvian asparagus, Brazilian coffee at premium price points. The concentration of job creation in healthcare means that the sectors most likely to demand Latin American goods — manufacturing, construction, retail — are the sectors that are not hiring. The Fed’s rate path (market expects two 25bp cuts in 2026) depends on whether the labour market stabilises or deteriorates further. If it deteriorates, rate cuts support the economy but weaken the dollar — boosting Latin American commodity exports priced in USD. As our previous coverage noted, the Fed is navigating a dual mandate where both sides — inflation and employment — are sending uncomfortable signals.
4
Trump Approval Collapses to 59% Disapproval — Gas Prices and Cost of Living Become Central Midterm Battleground
Trump Approval Collapses to 59% Disapproval — Gas Prices and Cost of Living Become Central Midterm Battleground
The latest Fox News poll shows 59% of voters disapprove of President Trump’s job performance — up from 51% in the same poll a year earlier. The eight-point deterioration tracks directly with the gasoline price surge: GasBuddy calculates that Americans have spent an extra $8 billion on fuel since the conflict began, and the $4.02 national average arrived in a midterm year where every House seat and a third of the Senate are on the ballot. The political dynamic is particularly damaging because Trump explicitly campaigned on lowering energy prices — and his White House celebrated “big wins” on gas prices just weeks before the conflict began.
The midterm landscape is shifting in real time. Democrats are building their campaigns around cost-of-living: the $175 billion IEEPA refund legislation, proposals for direct household refunds ($1,336 per Ohio household per Sherrod Brown), and the narrative that “Trump’s war raised your gas prices.” The Section 122 tariff expiry on July 24 forces a Congressional vote that puts every Republican on record either supporting or opposing tariffs three months before Election Day. The California primary — where Euronews describes a “disaster looming for Democrats” — suggests that the political pain is not exclusively Republican; voters are punishing all incumbents in a high-cost environment.
The economic fundamentals beneath the polling are concerning for the administration. The Tax Foundation estimates tariffs have raised the average household’s expenses by $1,100-$1,300. Medicaid coverage reductions from Trump’s spending and tax bill are removing millions of Americans from healthcare. The $2,000 tariff rebate checks Trump proposed require congressional approval and face Senate scepticism. The administration’s economic narrative — deregulation, tax cuts, energy abundance — is being overwhelmed by a reality of $4 gas, stagnant hiring, and a Supreme Court that struck down its signature trade policy. When 59% of Fox News respondents disapprove, the president’s base is eroding, not just the opposition growing.
For Latin American governments and investors, US midterm dynamics matter because they determine the trajectory of trade policy, immigration enforcement, aid flows, and diplomatic attention to the hemisphere. If Republicans lose their thin majorities in either chamber, the Section 122 tariffs are less likely to be extended, the USMCA renegotiation loses White House leverage, and Congressional oversight of Latin America policy increases. If Republicans hold, tariff-driven trade policy continues with whatever statutory tools survive SCOTUS scrutiny. The political dynamic also affects US-Latin America immigration policy: as Trump’s approval falls, enforcement actions that play to the base intensify — with direct consequences for Central American, Mexican, and South American diaspora communities. The November midterms are being decided at the gas pump, and Latin America is downstream of every outcome.
5
Canada’s Economy Under “Structural Transition” — GDP Growth Below 1%, Bank of Canada Trapped, USMCA Review Approaching at the Worst Possible Moment
Canada’s Economy Under “Structural Transition” — GDP Growth Below 1%, Bank of Canada Trapped, USMCA Review Approaching at the Worst Possible Moment
Canada’s economy is experiencing more than a cyclical slowdown — it is undergoing a structural transition. RSM’s economic outlook describes real GDP growth decelerating below 1%, with US tariff policy “taking a toll on labour, spending and economic growth.” The Bank of Canada has cut rates but markets are not pricing further relief in 2026. Unemployment is expected to reach 6.7%. Oxford Economics projects growth of just 1.4%, with the Bank of Canada “in a difficult position that will not get any easier.” Prime Minister Carney’s declaration that “the old relationship with the United States, a relationship based on steadily increased integration, is over” is not rhetoric — it is an economic assessment.
The USMCA’s mandatory six-year review is approaching under the worst possible conditions. Article 34.7 requires the three governments — US, Canada, Mexico — to decide whether to extend the agreement to 2042, place it under annual reviews, or allow it to expire in 2036. CSIS analysis concludes the agreement will “stagger on as a zombie, neither fully dead nor alive.” The good news: USMCA-compliant goods still enjoy lower effective tariffs (85%+ of Canada-US trade remains tariff-free). The bad news: Section 232 tariffs (50% on steel and aluminum) bypass USMCA and hit Canada’s industrial base directly. Trump has threatened 100% tariffs on all Canadian imports if Ottawa finalises a trade agreement with China.
Carney’s response is a simultaneous pivot to domestic spending and international diversification. The April 1 Ontario housing partnership eliminates the full 13% HST on new homes up to $1 million — saving buyers up to $130,000 and expected to generate 8,000 housing starts and 21,000 jobs. Bill C-26 provides $1.7 billion to provinces for housing supply. The “Buy Canadian” policy directs up to $70 billion in public procurement toward domestic products. The Canada Groceries and Essentials Benefit increases the GST credit by 25% for five years starting July 2026. And the Canada-Mexico Action Plan 2025-2028 coordinates positions with Mexico City ahead of the USMCA review — recognising that Washington will try to divide and conquer its two neighbours.
For Latin American investors, Canada’s structural transition has three direct implications. First, the USMCA review affects Mexico as profoundly as it affects Canada — and the Canada-Mexico Action Plan signals coordinated resistance to Washington’s renegotiation demands. Second, Canada’s trade diversification agenda creates opportunities for Latin American partners: Carney is actively seeking alternatives to US dependency, and Latin American commodity exporters (Chilean lithium, Brazilian agricultural products, Colombian energy) are natural fits. Third, the Bank of Canada’s rate path affects Canadian investment flows into Latin America: Canadian pension funds and mining companies are major investors in Latin American mining, infrastructure, and real estate. If the Canadian economy deteriorates further, those investment flows slow — but the diversification imperative may redirect capital southward as the US relationship degrades. As our previous coverage noted, Canada at a “hinge moment” means Latin America at an opportunity moment.
Market Snapshot
| INSTRUMENT | LEVEL | MOVE | NOTE |
| US Gasoline (avg) | $4.02/gal | ▲ +$1.06 in one month | Largest monthly increase ever; diesel $5.45; CA $5.87; $8B extra consumer spending; $4.50-$5 risk |
| S&P 500 | +2.9% (Tue) | ▲ best day since May | Trump “2-3 weeks” signal; Nvidia +5.6%; Marvell +12.8%; Nasdaq +3.8%; Dow +2.5% |
| WTI Crude | ~$99 (briefly below $100) | ▼ falling on war-end hopes | Was $70 pre-conflict; SPR release + IEA 400M bbl; E15 waiver May 1; Venezuela/Russia sanctions eased |
| US Effective Tariff | ~6.7% (post-SCOTUS) | ▼ from ~17% peak | IEEPA struck down; Section 122 at 10% expires Jul 24; Section 232 steel/aluminum/auto remain |
| US Mortgage Rate | ~6.55% | ▲ climbing | Case-Shiller +1.18% YoY (meager); low supply/low demand; housing starts weak; midterm headwind |
| Fed Funds Rate | 3.50-3.75% | → market expects 2 cuts | Powell term expires May; Waller: “still a little restrictive”; inflation cautiously optimistic; labour fragile |
| USD/CAD | Under pressure | ▼ CAD weak | Canada GDP <1%; BoC cut but no further relief priced; USMCA review; tariff uncertainty persistent |
| Gold | $4,704/oz | ▲ +0.6% | Safe haven persists alongside equity rally; inflation hedge; central bank demand; above $4,700 |
| Trump Approval | 41% approve / 59% disapprove | ▼ worst since office | Fox News poll; +8pp disapproval YoY; gas prices central; midterm liability; Dem refund campaigns |
Domestic Policy & Stability Tracker
Critical
$4 Gas + Falling Jobs + 59% Disapproval = Midterm Perfect Storm
The three numbers that define American politics in April 2026: $4.02 gasoline, employment that probably fell in 2025, and 59% disapproval. Trump campaigned on cheap energy and a strong economy. He is delivering neither. The Section 122 tariff vote before July 24 forces every member of Congress to take a position on trade costs before November. Democrats are running on $175B in refunds. Republicans are running out of economic talking points. The California primary signals that even traditionally safe seats are competitive. The midterm campaign is being fought at the gas pump.
Critical
Canada’s Structural Transition: Below 1% Growth, USMCA Zombie, Old Relationship “Over”
Canada’s economy is not in recession but is not functioning as designed. GDP below 1%. Unemployment heading toward 6.7%. The USMCA — the framework that governs 85%+ of Canada-US trade — approaches its mandatory review with Washington seeking renegotiation, Ottawa seeking preservation, and Mexico City seeking to avoid being divided from its northern partner. Carney’s response: $1.7B for housing, HST elimination on new homes, Buy Canadian policy ($70B procurement), and a Canada-Mexico alliance. The question is whether domestic spending can substitute for the US trade relationship that built Canada’s prosperity.
Tense
Post-SCOTUS Tariff Chaos: Refunds, Replacements, and a July 24 Cliff
The Supreme Court struck down IEEPA tariffs. Trump replaced them with Section 122 at 10% — but that expires in 150 days (July 24). Congress must vote before midterms. $175B in refunds are pending in courts. Section 232 tariffs on steel, aluminum, autos remain. Pending probes could produce new 232 tariffs on semiconductors and pharmaceuticals. Democrats want household refund checks. Republicans want tariff revenue. The tariff regime is simultaneously being dismantled by courts, replaced by executive action, and weaponised by both parties. Trade policy has never been less predictable.
Watching
Fed Chair Powell’s Term Expires May — Dual Mandate Under Pressure from Both Sides
The Fed cut rates three times in late 2025 (to 3.50-3.75%). Markets expect two more cuts in 2026. But Powell’s term expires in May, and Trump’s choice of successor will signal whether the Fed maintains its independence or becomes an instrument of political economy. Inflation is “cautiously optimistic” (housing falling, core easing) but energy costs are surging. Employment is fragile (payrolls probably fell in 2025) but GDP grew 4.4% in Q3. The dual mandate is pulling in opposite directions, and the person who navigates it will be chosen by a president whose approval is at 41%.
Fast Take
Gas
$4 gas is not just a price — it is a political event. Every president who has presided over $4+ gasoline has faced electoral consequences. Bush in 2008. Biden (briefly) in 2022. Trump in 2026. The difference is that Trump chose the conflict that produced the price. When a president who campaigned on “energy dominance” delivers the largest monthly gas price increase in recorded history, the economic narrative and the political narrative converge on the same number. The E15 waiver, SPR release, and Venezuelan sanctions easing are palliatives. The cure is a Strait of Hormuz that carries oil. Trump’s Wednesday address will determine whether the price is peaking or climbing.
Tariffs
The Supreme Court didn’t end the tariff era — it restructured it. IEEPA tariffs are dead. Section 122 tariffs are temporary (150 days). Section 232 tariffs are permanent until Commerce says otherwise. Section 301 tariffs survive from Trump’s first term. The effective tariff rate fell from 17% to 6.7%, but it’s not going to zero. The July 24 cliff is the next inflection: if Congress extends, tariffs become legislated rather than executive. If Congress lets them expire, the administration loses its fastest trade weapon. The $175B refund battle is the political side; the restructured tariff architecture is the economic side. Both will define the midterms.
Jobs
When the Fed governor says employment “probably fell” in 2025, and 90% of new private jobs came from one sector, the labour market is not fine. The headline GDP numbers (4.4% Q3) and the employment numbers (probably negative for the year) tell opposite stories. The reconciliation is productivity: firms are producing more with fewer workers, partly through AI adoption, partly through caution. The Treasury’s assessment that “firms are delaying major labour decisions and achieving output growth via productivity improvements” is optimistic spin on a structural shift where technology replaces the hiring that workers and voters are waiting for.
Canada
Carney is building a country that doesn’t depend on the United States. That project takes a decade. The USMCA review happens this year. The Canada-Mexico Action Plan, the Buy Canadian policy, the housing stimulus, the defence pivot — all point toward a Canada that diversifies its economic and security relationships away from Washington. But 75%+ of Canadian exports still go to the US. The USMCA still governs 85% of bilateral trade. Section 232 tariffs at 50% on steel and aluminum are crushing Ontario and Quebec. The structural transition is real, but the dependency it’s trying to escape is also real. Canada’s economy below 1% growth is the cost of transition. The question is whether the destination justifies the pain.
Housing
On both sides of the border, housing is simultaneously the crisis and the stimulus tool. In Canada, Carney eliminates HST on new homes (saving $130K), launches Build Canada Homes, and pours $1.7B into provincial supply — betting that housing construction can offset the trade-driven slowdown. In the US, mortgage rates at 6.55% have frozen the market (Case-Shiller +1.18% YoY, the meagrest gain in years), and Berkeley Homes halted new land acquisitions citing “geopolitical consequences.” Both countries need housing starts to drive employment. Both face affordability crises. Canada is spending to build. The US is waiting for rates to fall. Neither approach will produce results in 2026 without the energy crisis resolving.
Developments to Watch
01Trump’s Wednesday evening address on Iran — TONIGHT. Domestic impact: if he commits to a timeline, gas prices peak. If vague, $4.50 becomes the next target. The address will set the trajectory for every consumer metric, every approval poll, and every midterm calculation through the summer. The most economically consequential presidential speech since the pandemic.
02ADP Employment Report — due today. The private payrolls data provides real-time read on hiring after the annual revisions showed 2025 was worse than reported. Watch for: continued concentration in healthcare; small-firm shrinkage; any signal that energy costs are triggering layoffs.
03E15 waiver effective May 1 — and Section 122 tariff Congressional dynamics. Watch for: whether E15 meaningfully increases gasoline supply; whether Congress begins scheduling the Section 122 vote; and how the $175B refund legislation progresses through committees.
04Fed Chair Powell term expiry — May 2026. Watch for: Trump’s nominee announcement; Senate confirmation dynamics; market reaction to any signal about Fed independence; and whether the new chair inherits rate cuts or a pause.
05Canada: Bill C-15 Budget Implementation Act and USMCA review preparations. Watch for: parliamentary progress on housing, natural resources, trade measures; Carney-Sheinbaum coordination on USMCA positions; Bank of Canada rate decisions; and whether the Ontario housing HST elimination stimulates starts.
06IMF World Economic Outlook — April 14. US and Canada country-specific forecasts. GDP revisions, inflation paths, labour market assessments, tariff impact quantification. The document that informs Fed, BoC, and Congressional decisions for the rest of the year.
Sovereign & Credit Pulse
| COUNTRY | KEY METRIC | DIRECTION | OUTLOOK |
| United States | Gas: $4.02; S&P +2.9% | → split signals | Markets rally on war-end; consumers squeezed by gas; payrolls fell 2025; tariffs restructured; midterms |
| Canada | GDP: <1%; Unemp: →6.7% | ▼ structural transition | USMCA review; housing stimulus; Buy Canadian $70B; BoC trapped; trade diversification underway |
| US Trade Policy | Eff. tariff: ~6.7% | ▼ from 17% peak | IEEPA dead; Sec 122 expires Jul 24; Sec 232 stays; $175B refunds pending; Congressional vote required |
| US Labour | Payrolls: probably fell 2025 | ▼ fragile | Healthcare 90% of private gains; small firms shrinking; bottom 60% cutting spend; ADP today |
| US Housing | Mortgage: 6.55% | ▼ frozen market | Case-Shiller +1.18% YoY; low supply/low demand; Berkeley halts land; energy costs compounding |
| Canada Housing | HST eliminated (Apr 1) | ▲ stimulus active | $130K savings; 8K starts expected; $1.7B provincial; Build Canada Homes; affordability central to Carney |
Power Players
01Christopher Waller — Fed Governor. His February 23 speech contained the most consequential labour market assessment since the pandemic: US payroll employment “probably fell” in 2025, only the third time since 1945 outside a recession. His observation about consumer spending divergence — top 20% resilient, bottom 60% cutting — defines the two-speed economy that the Fed must navigate. If Waller is right that the economy is fundamentally sound but the data is noisy, the Fed can cut rates cautiously. If the labour market is genuinely deteriorating, the cuts must accelerate. His diagnosis shapes the treatment.
02Mark Carney — Canada’s Prime Minister. His April 1 Ontario housing partnership — effective today — is the most visible component of a comprehensive economic strategy built on domestic spending, trade diversification, and defence investment. The HST elimination on homes up to $1 million, Build Canada Homes, Buy Canadian ($70B), the Canada-Mexico Action Plan, and Bill C-2’s expanded security powers represent a PM who is simultaneously preparing for USMCA renegotiation, diversifying away from US dependency, and building the domestic economy to absorb the shock. His challenge: governing with a near-minority while the US relationship degrades.
03John Roberts — Chief Justice of the United States. His 6-3 opinion in Learning Resources v. Trump — “IEEPA does not authorise the President to impose tariffs” — is the most consequential check on executive trade power since the New Deal. The ruling triggered $175B in potential refunds, forced Trump onto Section 122 (150-day limit), and restored Congressional authority over tariffs that the executive had claimed for two administrations. Roberts wrote that the President “asserts the extraordinary power to unilaterally impose tariffs of unlimited amount, duration, and scope” — and the Court said no. The July 24 expiry is his ruling’s downstream consequence.
04Patrick De Haan — GasBuddy head of petroleum analysis. The man who monitors the number that matters most to American voters. His data showed the $1.06/gallon monthly surge — “the largest monthly increase GasBuddy has ever recorded.” His warnings that $4.50-$5.00 is possible if Hormuz stays closed set market expectations. His assessment that “the president doesn’t have a whole lot of levers” is the honest analysis that neither party wants to hear. De Haan doesn’t set policy, but he sets the benchmark against which every policy is measured.
05Elizabeth Warren — US Senator (D-MA). Her post-SCOTUS campaign — “Donald Trump stole your money with his illegal tariffs — and you paid higher prices on everything from housing to groceries. It’s time for Trump to pay up and give back your money” — captures the Democratic midterm strategy in one sentence. The $175B refund legislation, the household refund proposals, and the framing of tariffs as an illegal tax are the economic policy platform that Democrats will carry into November. Whether voters connect tariff refunds to their cost-of-living frustration determines whether the messaging translates into seats.
Regulatory & Policy Watch
01Section 122 tariffs: 10% on most imports, 150-day limit, expires July 24. Trump invoked Section 122 within hours of the SCOTUS ruling. The tariff exempts critical minerals, energy products, fertilisers, certain agricultural products (beef, tomatoes, oranges), pharmaceuticals, aerospace, electronics, and passenger vehicles. Congressional vote required to extend beyond 150 days. Both parties face electoral calculations: extending raises consumer costs before midterms; letting expire surrenders trade leverage.
02EPA E15 waiver: expanded ethanol sales May 1 through May 20. The waiver allows 15% ethanol-blend gasoline in states where summer restrictions normally apply (roughly half the US). Designed to boost supply and marginally reduce pump prices. Extension possible. Combined with SPR drawdown, Venezuelan sanctions easing, and Russian oil waiver, this represents the administration’s full emergency fuel toolkit.
03Canada: Ontario HST elimination effective April 1, Build Canada Homes, Buy Canadian. Full 13% HST removed on new homes up to $1M (saving $130K). Provincial estimates: 8,000 housing starts, 21,000 jobs, $2.7B GDP. Bill C-26 ($1.7B to provinces). Build Canada Homes agency launched. Buy Canadian policy ($70B procurement) phasing into housing and defence. Canada Groceries and Essentials Benefit (+25% GST credit) from July 2026.
04USMCA mandatory review: approaching under maximum tension. Article 34.7 requires the three governments to decide: extend to 2042, annual review, or allow expiry in 2036. Washington wants renegotiation. Ottawa and Mexico City want preservation with minimal concessions. CSIS: “the USMCA will stagger on as a zombie.” Key irritants: Canadian supply management (dairy), digital services tax (rescinded by Carney), softwood lumber quotas, and the 100% tariff threat if Canada deals with China. The review’s outcome shapes North American trade for a generation.
Calendar
| DATE | EVENT | IMPACT |
| Apr 1 | Trump address on Iran (TONIGHT) + ADP employment | Gas trajectory; labour data; midterm framing; consumer confidence direction |
| Apr 1 | Canada Ontario HST elimination effective (TODAY) | $130K savings on new homes; housing starts impact; Carney affordability test |
| Apr 14 | IMF World Economic Outlook | US/Canada forecasts; tariff impact quantification; labour assessment; rate path implications |
| May 1 | EPA E15 waiver effective | Expanded ethanol gasoline; supply boost in restricted states; extension possible through May 20+ |
| May 2026 | Fed Chair Powell term expires | Trump nominates successor; Fed independence test; rate path signal; market reaction |
| Jul 2026 | Canada Groceries and Essentials Benefit begins | 25% GST credit increase; 5-year duration; affordability measure; Carney’s consumer support |
| Jul 24 | Section 122 tariff expiry | Congressional vote required; midterm calculus; trade leverage; $800-$1,300/household cost decision |
| 2026 | USMCA mandatory six-year review | Extend to 2042, annual review, or allow 2036 expiry; US/Canada/Mexico positions diverging |
| Nov 2026 | US midterm elections | All House seats; 1/3 Senate; gas/tariffs/jobs central; Trump approval at 41%; trade policy at stake |
Bottom Line
North America’s April 1 is defined by numbers that tell an uncomfortable story, and this USA and Canada intelligence brief tracks all of them. The US national gasoline average at $4.02 is the largest monthly surge in recorded history, arriving in a midterm year where the president’s approval has collapsed to 41%. US payroll employment probably fell in 2025 — only the third time since 1945 outside a recession. The Supreme Court struck down the executive’s tariff authority, and the replacement expires July 24, forcing Congress to vote before November. Canada’s GDP is below 1%, its prime minister has declared the old US relationship “over,” and the USMCA review is approaching under maximum tension. The two largest economies in the Western Hemisphere are simultaneously experiencing domestic crises that will reshape their trade, fiscal, and political landscapes.
The tariff story is no longer about policy — it’s about institutional architecture. The Supreme Court’s 6-3 ruling returned tariff authority to Congress, where the Constitution placed it. The July 24 Section 122 expiry forces the legislature to make a choice that the executive previously made unilaterally. The $175 billion refund battle will be litigated in courts and campaigned on in elections. Section 232 tariffs on steel, aluminum, and autos remain, and pending Commerce investigations could produce new ones. For every company that trades across US borders — including the Latin American firms that supply American manufacturing, agriculture, and energy — the tariff landscape is more constrained, more predictable, and more dependent on Congressional politics than at any point since 2025.
The consumer divergence is the domestic story with the longest tail. The top 20% of American earners — buoyed by 2025’s stock market rally and insulated from gasoline costs — continue spending. The bottom 60% — who account for 45% of consumer spending but own 15% of stocks — are cutting back, switching to lower-cost goods, and making fewer purchases per trip. This divergence is structural, not cyclical. AI is enabling firms to achieve productivity growth without hiring. Healthcare is the only sector creating jobs at scale. The Fed is navigating a dual mandate where GDP suggests strength and employment suggests fragility. The new Fed chair, to be appointed when Powell’s term expires in May, inherits this contradiction.
Canada’s structural transition is the story most consequential for Latin American trade strategy. Carney is systematically building alternatives to US dependency: the Canada-Mexico Action Plan coordinates USMCA positions, the Buy Canadian policy redirects $70 billion in procurement, the trade diversification agenda seeks new partners, and the housing stimulus ($130K HST savings, Build Canada Homes, $1.7B to provinces) invests in domestic demand that doesn’t require American consumers. For Latin American economies that have watched Canada as a stable, trade-oriented partner — and as a counterweight to US unilateralism — the structural transition creates both risk (Canadian investment may slow) and opportunity (Canadian diversification creates new bilateral channels).
For Latin American investors, this USA and Canada intelligence brief delivers five signals. First, $4 gasoline in the US drives demand for non-Hormuz crude — benefiting Venezuelan, Colombian, Ecuadorian, and Brazilian exporters targeted by the sanctions relief. Second, the Section 122 tariff expiry on July 24 creates a three-month window of trade uncertainty that affects every Latin American supply chain into the US. Third, the US labour market’s fragility (payrolls probably falling, healthcare-only hiring) means demand for Latin American exports is concentrated in resilient sectors, not broad-based. Fourth, Canada’s USMCA strategy — coordinated with Mexico through the Action Plan — creates a unified North American partner bloc that could benefit Latin American trade architecture. Fifth, the midterm elections in November will determine whether US trade policy becomes more or less restrictive — and every Latin American government should be scenario-planning for both outcomes. Trump’s Wednesday address sets the energy trajectory. The July 24 vote sets the tariff trajectory. November sets everything else.