Regional Summary
North America’s Expensive Autonomy Mark Carney’s $6.6 billion defence plan is reshaping Canadian politics. The Liberal leader wants to raise Canadian firms’ share of defence contracts from 30% to 70% within a decade—less a military programme than an economic-nationalist manifesto dressed in khaki. Mr Carney is betting that 125,000 jobs, a brokering role between the EU and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and a story of independence will outweigh the higher unit costs that come with shrinking the supplier pool. The bet is paying off: a third Conservative defection has brought the Liberals close to a majority, while Pierre Poilievre’s Conservative caucus splits over whether resisting American tariffs counts as patriotism or hysteria. Yet the strategy works only if trade tensions stay high enough to justify the premium Canadians will pay. Should Washington offer a better deal at the United States-Mexico-Canada Agreement (USMCA) review, the entire plan could look like expensive insurance against a threat that never came. Chile’s submarine-cable affair shows what happens when a smaller economy tries the same balancing act with less leverage. Washington revoked the visas of three Chilean officials, including the transport minister, over a planned fibre-optic link to China—the first time America has used personal sanctions to kill a Chilean infrastructure project. The episode ended the myth that Santiago could treat great-power competition as someone else’s problem. China’s embassy denounced the move as hegemonic; the incoming government of José Antonio Kast, whose inauguration Marco Rubio, the secretary of state, will attend, has every incentive to let the cable quietly die. Chile’s tradition of commercial pragmatism survives only so long as neither great power forces an either-or choice—and that condition no longer holds. Mexico’s killing of Nemesio Oseguera Cervantes, the Jalisco cartel’s leader, shows the paradox from the security side. The operation relied on American intelligence yet Mexican special forces carried it out—a division of labour that let Claudia Sheinbaum, the president, claim sovereignty while quietly accepting dependence. The cartel’s retaliation, 252 roadblocks across more than 20 states and 25 dead National Guard troops, showed the state’s continued fragility. Ms Sheinbaum’s political position is weakening in parallel: her coalition partners refused to back electoral reform, stripping Morena of its constitutional supermajority, and internal feuds over gubernatorial nominations have erupted in 15 states. State oil company Pemex, meanwhile, completed a $1.8 billion bond issue even as auditors revealed $2.3 billion owed to contractors and unjustified payments to Carlos Slim’s companies—proof that investors trust the sovereign guarantee more than the institution behind it. Brazil’s Lula faces the starkest version of the dilemma. The American capture of Nicolás Maduro prompted emergency meetings with military chiefs that showed gaps in air defences—an uncomfortable discovery for a president who had styled himself as the region’s diplomatic heavyweight. His response has been to court other powers: an artificial intelligence (AI) summit with Narendra Modi, advocacy for local-currency trade, and resumed Amazon-margin drilling by state oil company Petrobras. Yet the domestic scene undermines the grand posture. The Bolsonaro family is feuding over 2026 succession from a jail cell, the Supreme Court quietly dropped proceedings against one of its own justices despite police evidence of illegality, and even a samba school’s tribute to Lula at Carnival became the subject of electoral litigation. The gap between Brazil’s global ambitions and its institutional housekeeping has rarely been wider. Autonomy from Washington now carries a measurable price tag—in defence budgets, lost infrastructure deals, cartel blowback, and military shortcomings—and every government in the hemisphere is finding that the bill arrives before the benefits do. Leaders are willing to pay, but none yet knows whether their voters will keep footing the bill.Country Summaries
Canada
Mark Carney announced a $6.6 billion defence strategy this week to cut Canada’s dependence on American suppliers by more than half.
The Defence Industrial Strategy will increase Canadian firms’ share of defence contracts from 30% to 70% over the next decade, creating 125,000 jobs and establishing new agencies to manage defence investment and research. The size and explicit focus on cutting US dependence represent an escalation in Canada’s effort to diversify military suppliers.
Mr Carney is taking the same approach to trade. He confirmed that Canada is leading talks to link the European Union and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), putting Ottawa between the two groups as trade tensions with Washington rise. The prime minister appointed Janice Charette, a former top civil servant, as Canada’s chief trade negotiator with the United States before the North American trade deal comes up for review.
The government’s position is strengthening at home. Matt Jeneroux, a Conservative MP from Edmonton, crossed the floor to join the Liberals this week, becoming the third Conservative to defect and bringing Mr Carney within three seats of a majority. Mr Jeneroux cited the prime minister’s “ambitious agenda” and his recent Davos speech as reasons for the switch.
Pierre Poilievre, the Conservative leader, has his own discipline problems. He had to distance himself from Jamil Jivani, an MP, whose comments to Breitbart News described Canada’s response to Donald Trump’s tariff threats as an “anti-American hissy fit.” Mr Poilievre said Mr Jivani “speaks for himself” while defending Canadian concerns as legitimate, but the episode exposed messaging problems within his caucus.
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- Bank of Canada orders restaurant tip manager XTM to halt payment activities — The Bank of Canada issued a temporary order halting XTM Inc.’s retail payment operations after allegations the company failed to safeguard client funds, causing a ‘significant shortfall’ in restaurant worker tips across BC. (globalnews.ca)
- NDP leadership candidates face off in final debate before March vote — Five NDP leadership candidates held their second and final official debate in New Westminster, BC. The candidates focused on rebuilding the party, with only Tony McQuail saying he’s aiming for the Prime Minister’s Office while others emphasized party rebuilding. (globalnews.ca)
- Carney government shifts advertising budget toward patriotic messaging — The federal government reallocated its advertising spending after Carney became Prime Minister, shifting priorities to patriotic and economic messages and purchasing expensive television airtime during major sporting events. (cbc.ca)
- Carney announces planned visit to India to deepen trade relations — Prime Minister Carney will travel to India next week for the first official visit in years, with India’s envoy saying a comprehensive trade deal could be signed within a year as Canada seeks to diversify its alliances beyond the US. (ctvnews.ca)
- Charles Milliard acclaimed as new Quebec Liberal Party leader — Charles Milliard was acclaimed as the new leader of the Quebec Liberal Party after no other eligible candidates came forward, taking over from Pablo Rodriguez who resigned in December amid internal party turmoil. (cbc.ca)
- CSIS identifies anti-feminist ideology as emerging national security concern — Senior officials at the Canadian Security Intelligence Service said anti-feminist ideology is becoming ‘increasingly relevant’ to Canada’s national security landscape and may lead to radicalization and violent extremism, though it doesn’t yet rise to a direct threat level. (globalnews.ca)
- Bloc Québécois MP Simon-Pierre Savard-Tremblay assaulted in Brussels — Bloc Québécois MP Simon-Pierre Savard-Tremblay reported being mugged and pepper-sprayed by three men while in Brussels for a NATO Parliamentary Assembly meeting. The incident occurred as he was walking in the Belgian capital. (globalnews.ca)
Notes
Notes
Carney unveils \$6.6B 'Buy Canadian' defence industrial strategy to reduce US reliance
February 15–17, 2026
Poilievre distances himself from MP Jivani's 'anti-American hissy fit' comments
February 17–18, 2026
Other
Mexico
Mexico killed the country’s most wanted cartel leader with American help, but the victory cost more than the 252 roadblocks that paralyzed the country.
Special forces killed Nemesio Oseguera Cervantes, known as El Mencho, in Tapalpa, Jalisco, using American intelligence. The defence ministry acknowledged the cooperation. Mexico ran the ground operation but paid the price when the Jalisco New Generation Cartel struck back with 252 roadblocks across more than 20 states and killed 25 National Guard troops in six separate attacks.
Claudia Sheinbaum faced her first major political setback. The Labour Party (PT) and Green Ecologist Party of Mexico (PVEM) refused to support her electoral reform, leaving Morena without the constitutional supermajority needed to change the constitution. Ricardo Monreal, Morena’s Senate leader, admitted no agreements exist with coalition partners and said his party would support Ms Sheinbaum’s proposal “however it comes” — acknowledging that constitutional reform may be impossible.
Pemex completed a $1.8 billion bond issue this week while auditors revealed the company owes contractors $2.3 billion and takes up to 454 days to pay suppliers. The state oil company also made $1.2 billion in payments to Carlos Slim’s Grupo Carso companies that auditors could not justify. Investors trust the government’s backing more than the company’s performance.
Morena faces public disputes across 15 states between governors and federal leaders, with at least ten internal conflicts over 2027 gubernatorial nominations. Ms Sheinbaum announced plans to eliminate “golden pensions” for former Pemex and Federal Electricity Commission (CFE) executives, capping monthly payments at 70,000 pesos and redirecting 5 billion pesos annually to welfare programmes. The move targets elite privileges but also signals the fiscal pressure driving her administration’s choices.
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- Mandatory cell phone registration with CURP deadline set for June 30 — The Sheinbaum administration will block all phone lines not registered with Population Registry Code (CURP) identification by June 30, as part of a national strategy against phone-based extortion. The registration requirement began January 9 but faces public resistance. (elimparcial.com)
- CFE implements infrastructure upgrades and faces service challenges nationwide — Mexico’s Federal Electricity Commission (CFE) conducted maintenance across multiple states, installed new equipment worth $81 million to prevent blackouts, and dealt with extortion scams by fake employees while preparing electrical systems for the 2026 World Cup. (oem.com.mx)
- Central bank signals potential interest rate cuts while monitoring inflation impact — Mexico’s central bank indicated it will consider additional adjustments to interest rates in upcoming meetings while carefully monitoring the effects of fiscal measures on inflation. The bank paused rate cuts at 7% in February after 12 consecutive reductions. (24-horas.mx)
- Foreign minister promotes space cooperation and trade relations — Juan Ramón de la Fuente, the foreign minister, participated in the Latin American and Caribbean Space Agency assembly, emphasising technology’s role in regional sovereignty, and met with Canadian business delegation ahead of United States-Mexico-Canada Agreement (USMCA) review. (noticias.imer.mx)
- Government announces cinema industry support plan with tax incentives — Ms Sheinbaum presented a comprehensive cinema support plan with actress Salma Hayek, offering 30% tax incentives for film productions in Mexico. Ms Sheinbaum defended Hayek against social media criticism for supporting the administration’s cultural policies. (elfinanciero.com.mx)
Notes
Notes
Government announces initiative to eliminate 'golden pensions' for former officials
February 18–22, 2026
Pemex faces financial crisis with massive debt and delayed payments to contractors
February 17–19, 2026
Other
Brazil
Lula called emergency meetings with his military chiefs after the United States captured Nicolás Maduro, Venezuela’s president. He asked how vulnerable Brazil was and what plans existed to defend against similar operations. The briefings revealed gaps in air defenses and spurred planning for attack.
Political warfare is escalating at home, where even cultural celebrations have become campaign battlegrounds. Rio’s Acadêmicos de Niterói samba school honored Lula at Carnival with the theme “Hope from the Mulungu Tree: Lula, Brazil’s Worker.” The opposition claimed this was illegal campaigning. Judges later relegated the school from the Special Group after poor scores, while the New Party and Liberal Party filed legal challenges in electoral court.
The Bolsonaro family is fighting over the 2026 succession. Jair Bolsonaro, the jailed former president, suffered health problems including high blood pressure and dizziness. His lawyers requested house arrest on health grounds. His children and former first lady Michelle Bolsonaro are feuding over whom to support.
Lula kept his diplomatic schedule, traveling to India for an artificial intelligence summit with Narendra Modi. The leaders discussed regulating AI, critical minerals deals, and expanding trade to $30 billion while strengthening ties among poor countries. Lula defended trading in local currencies rather than using dollars. At home, Petrobras paid quarterly dividends and prepared to resume drilling at the Morpho well in Amazon Margin after regulators approved.
The Supreme Court moved to protect one of its own. Edson Fachin, the court president, dropped proceedings against Justice Dias Toffoli in the Master bank investigations, despite Federal Police evidence of illegal access to tax data of ministers and relatives.
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- Carnival tribute to Lula triggers electoral controversy and school relegation — Rio’s Acadêmicos de Niterói samba school honored President Lula at Carnival with the theme “From the Mulungu Tree Comes Hope: Lula, Brazil’s Worker,” sparking opposition claims of illegal campaigning. The school was later relegated from the Special Group after poor scores from judges, while legal challenges were filed at the electoral court. (em.com.br)
- US military buildup near Iran raises regional war tensions — The United States deployed forces including two aircraft carriers, over 50 fighter jets and destroyers to the Middle East, with Trump considering limited strikes on Iran to force nuclear talks. The USS Gerald R. Ford crossed into the Mediterranean as diplomatic talks continue. (g1.globo.com)
- Fernando Haddad weighs São Paulo gubernatorial candidacy amid tariff negotiations — Fernando Haddad, the finance minister, is under pressure to run for São Paulo governor while managing Brazil’s response to US tariff policies. The Workers’ Party (PT) considers his candidacy essential for 2026 elections, though Mr Haddad has expressed reluctance. He defended Brazil’s diplomatic approach after the US Supreme Court blocked Trump’s tariffs. (cnnbrasil.com.br)
Notes
Notes
STF crisis deepens over data breaches and Master bank scandal involving Justice Toffoli
February 15–22, 2026
Fernando Haddad weighs São Paulo gubernatorial candidacy amid tariff negotiations
February 16–21, 2026
Lula requests military assessment after Maduro capture raises regional security concerns
February 19–21, 2026
Other
Chile
The United States revoked visas for three Chilean officials, including Juan Carlos Muñoz, the transport minister, for backing a planned submarine cable linking Chile directly to China. Washington called the project a threat to regional security, forcing Chile to choose between the superpowers—exactly what its traditional diplomacy was meant to avoid.
The cable crisis exposed how superpower competition overwhelms Chile’s commercial pragmatism. China’s embassy condemned the visa bans as ‘hegemonic and despotic’ interference in Chilean sovereignty. The sanctions—the first time Washington has used visa restrictions to kill a Chilean infrastructure project—show the limits of trying to stay friends with both superpowers when their core interests clash.
Even as his government faced American pressure, Gabriel Boric maintained Chile’s traditional non-aligned diplomacy elsewhere. The president wrote to Pope Leo XIV urging a humanitarian approach to Cuba’s crisis and sent $1 million in aid through the Chile Fund against Hunger and Poverty. The Vatican channel lets Chile help Cuba without aligning with either Washington’s sanctions or Havana’s government.
Chile’s biggest state company faced pressure this week. Codelco, the state copper company, fired three senior executives after an audit found they hid technical information about a 2023 rock explosion at El Teniente mine from regulators. Prosecutors raided executive homes and corporate offices investigating the cover-up, which may be linked to the 2025 mine accident that killed six workers. The scandal threatens accountability at the world’s largest copper producer when copper demand is rising globally.
Meanwhile, José Antonio Kast’s team completed preparations for his March 11 inauguration with a dozen heads of state confirmed to attend, including Marco Rubio, the US secretary of state. Mr Rubio’s attendance signals diplomatic acceptance of the transition. Mr Boric’s final weeks in office proved less smooth—residents of Easter Island protested his farewell visit, accusing him of showing up only when leaving office.
Chile advanced defence modernisation, announcing plans to manufacture 112 drones in 18 months to build technological independence. New rules established the multi-year fund that replaced the old copper-law financing.
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- China accuses America of meddling over submarine cable — China’s embassy in Chile issued a strong statement condemning US visa restrictions on Chilean officials, defending the Chile-China submarine cable project as legitimate cooperation and accusing Washington of ‘hegemonic and despotic’ behaviour in trying to interfere with bilateral projects. (latercera.com)
- Boric receives performance bonus in final weeks — Mr Boric received a performance bonus that increased his salary from $7 million to $10 million pesos between November and December 2025, based on meeting government targets under the Management Improvement Programme that applies to all public servants. (emol.com)
Notes
Notes
US imposes visa restrictions on Chilean officials over China submarine cable project
February 17–22, 2026
Chinese embassy accuses US of violating Chilean sovereignty over submarine cable sanctions
February 22, 2026
Codelco dismisses executives and faces criminal investigation over El Teniente mine concealment
February 15–20, 2026
Other