So far, Paul talked about how Gentiles (non-Jews), judgers, and Jewish teachers all fall short of God's standards. Now Paul will talk about circumcision, which some Jews may claim would guarantee them special status.
Turns out that external circumcision is actually a non-factor in meeting God's standards (by the way, circumcision primarily serves as symbolism and distinguishment)! In particular, Paul talked about how those who are circumcised and "are a breaker of the law" would result in their "circumcision [...] become uncircumcision" (2:25), but for the uncircumcised who "[keep] the righteous requirements of the law", their "uncircumcision [will be] counted as circumcision" (2:26). In fact, Paul even talked about how the uncircumcised, especially those who fulfill the law, judge those who are circumcised and break the law (2:27)!
From these three statements, Paul introduces the idea of internal circumcision (rather than external circumcision). External circumcision is done with a private part, but internal circumcision is done in the heart. Internal circumcision is also fostered by the Spirit (who bases the praise on God) rather than the law itself.
Ultimately, God cares more about the inside than the outside. Unfortunately, our inside heart couldn't match God's standards, but Paul shows that there is a solution in the next chapter.