The review of the United States-Mexico-Canada Agreement (USMCA) has generated uncertainty among businesses and investors. However, the process is part of a mechanism established when the agreement was signed and does not mean the treaty will be dissolved.

According to Jorge A. Torres, President of InterlinkTrade Services, these are the six main points.

1. The review of the USMCA was planned from its inception

The USMCA came into force on July 1, 2020 and since then contemplated a mandatory review six years later through the so-called Sunset Clause. This review begins on July 1, 2026, and aims to evaluate the functioning of the treaty and determine whether it will be extended for a new 16-year period, until 2052.

2. The treaty does not end in 2026

One of the main misunderstandings is thinking that the USMCA ends this year. In reality, if the three countries do not reach an agreement to extend it during the 2026 review, the treaty will remain in force and reviews will be carried out every year until 2036 or until there is a consensus between Mexico, the United States and Canada. Mexico and Canada have formally expressed their willingness to extend the agreement. However, the United States is unlikely to accept automatic renewal without first negotiating revisions to strengthen its industrial and manufacturing base.

3. Rules of origin will be the main topic of negotiation

One of the most relevant changes proposed by the United States is to increase the regional content required for a vehicle to obtain the benefits of the USMCA. The proposal includes: increase regional content from 75% to 82%; incorporate a 50% US content requirement, a condition that does not currently exist. If approved, manufacturers and suppliers will have to produce a greater quantity of components within North America.

4. Section 232 will continue to be a source of pressure

In addition to the treaty review, the industry continues to face US tariffs established under Section 232. At the moment: Mexico faces a 25% tariff on auto parts when the USMCA does not apply; competitors such as the European Union, South Korea and Taiwan face rates of 15%. Reducing this gap will be one of the priority issues for maintaining the competitiveness of Mexican manufacturing.

5. The Mexican automotive industry maintains solid growth

Despite the uncertain environment, the sector’s indicators show strength. Between January and March 2026: auto parts production reached $31.19 billion; exports grew 7.93% annually; 75.4% of Mexican auto parts were destined for the United States. The data shows that manufacturing integration between the two countries continues to strengthen.

6. Investment will change its focus

The potential update to the rules of origin would also modify the investment strategy of many companies. The emphasis would shift from solely focusing on logistics, warehousing, and distribution to focusing on: manufacturing; production of components; new industrial plants; regional integration of suppliers. In this context, industrial corridors such as northern Mexico and southern Texas become more relevant for implementing shared production schemes.

What does all this mean for businesses?

Rather than wondering if the USMCA will continue, companies should prepare for a scenario in which regional trade rules will be stricter. Organizations that strengthen their regional content, develop suppliers in North America, and adapt their supply chains will be better positioned to reap the benefits of the treaty over the next decade.

#USMCAReview #NorthAmericaAutoTrade #RulesOfOrigin #Nearshoring #2026TradePolicy

Click here read the original content