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.

What Does This Mean for Importers?

In 2025, I saw firsthand how confused and worried importers were about the implementation of reciprocal tariffs. Many importers were seeking guidance, as they worked to understand the implications for their businesses. Fortunately, the U.S.’s decision to decline renewing the USMCA doesn’t require the same response.

The USMCA remains in effect, which means if you’re an importer, you can still reap many of the benefits provided by the agreement. While operations remain unchanged in the short term, I recommend importers use this time to prepare for potential changes as negotiations progress.

Recommendations for U.S. Importers

If you take advantage of the USMCA when you import from Mexico or Canada, there are some steps you can take to minimize the impacts caused by possible changes to the agreement:

* Identify Weaknesses In Your Supply Chain - Conduct a supply chain risk assessment to find points in your supply chain that could become vulnerable if the USMCA changes. You should check which products you import that receive the USMCA preferential treatments, what products could lose preferential treatment, and which of your suppliers could be affected by stricter regional content requirements or other negotiated changes.

* Strengthen Rules of Origin Documentation - While the current rules of origin of the USMCA remain in effect for now, U.S. Customs and Border Protection (CBP) is likely to place greater emphasis on verifying that imports from Mexico and Canada actually qualify. Therefore, make sure your certificate of origin and other import documents are completed and readily available before shipments move.

* Build Flexible Sourcing Strategies - Though negotiations will continue through annual reviews, relying on one sourcing strategy can work against you. Diversifying suppliers, qualifying backup manufacturers, and reviewing long-term supplier contracts will help your supply chain continue operating, regardless of what happens to the USMCA.

* Prepare for Higher Compliance Costs - The ongoing review process will likely lead to increased compliance obligations. Investing in trade compliance software, supplier audits, and internal recordkeeping procedures can help you overcome these challenges.

* Monitor Negotiations - Since the U.S. declined to renew the agreement, the built-in framework of the USMCA calls for annual reviews for the next 10 years unless the agreement is renewed. You should pay close attention to the results of each review and any developments that occur in between.

Although the U.S. declined to renew the USMCA, the agreement still remains in effect. For now, importers have the time to strengthen their supply chain, improve their compliance, and stay informed about policy developments as negotiations remain ongoing. The future of the USMCA might be uncertain, but planning today can minimize disruptions and position your business for future changes.