Tradewatch: USMCA enters a new era: What the next 10 years mean for U.S. Importers

The United States-Mexico-Canada Agreement (USMCA) is a free trade agreement that governs $1.9 trillion in annual trade between the participating countries. It breaks down trade barriers, provides preferential duty treatment, and protects intellectual property, among other provisions. Despite the benefits it provides for the three participating countries, the U.S. chose not to extend the agreement during the first formal review.

What the Recent Decision Triggers

On July 1, 2026, the three nations participating in the USMCA met for their first six-year joint review. While Mexico and Canada agreed to renew the agreement, the U.S. declined.

This activates:

• Annual reviews for the next 10 years

• Ongoing negotiations

• A countdown before the agreement expires

Major USMCA Issues the U.S. Want To Renegotiate

While the review did not immediately change the terms of the USMCA, it identified the issues most likely to shape future negotiations and influence how importers plan their North American supply chains.

Based on statements from the U.S. Trade Representative and the White House, the U.S. wants to renegotiate key aspects of the USMCA. This includes:

• Stricter Automotive Rules of Origin - The U.S. seeks to increase the content in originating North American vehicles from 75% to 82%. Washington also wants to make it a requirement that at least 50% of a vehicle’s value be sourced in the U.S.

• Chinese investment in Mexico - Chinese companies legally produce goods in Mexico, but they don’t qualify for the USMCA unless they meet the rules of origin. The U.S. is concerned some Chinese manufacturers are taking advantage of the USMCA to avoid tariffs on their goods.

• Trade Deficits - The current administration is deeply concerned about trade imbalances and believes the USMCA hasn’t done enough to address those imbalances.

• Canada-specific Trade Issues - Several trade disputes that extend beyond the USMCA are likely to be addressed, such as Canada’s dairy supply management system, trade in softwood lumber, and tariffs on steel and aluminum.

Taken together, these negotiating priorities indicate that future revisions to the agreement will likely extend beyond tariff preferences and affect how companies qualify for and capitalize on USMCA treatment.

PSA BDP insight: USMCA remains in effect, but its new annual review process introduces greater uncertainty for North American trade. Now is a good time for businesses to review origin qualification, compliance processes, and sourcing strategies to help prepare for potential changes in the years ahead. Should you have questions or concerns, please reach out to your local PSA BDP representative.