USMCA review process impacts North American manufacturing

The United States, Mexico, and Canada are currently engaged in a formal review of the United States-Mexico-Canada Agreement (USMCA). While Canada and Mexico have expressed a preference to extend the current agreement for another 16 years, the Trump administration has advocated for a broader review and potential changes to the pact.

Negotiations are ongoing, with discussions expected to continue through 2026 or 2027. The review process has significant implications for North American manufacturing, particularly regarding automotive rules of origin and competition from Chinese companies operating in Mexico. The agreement governs approximately $2 trillion in regional trade.

In Mexico, the electronics industry has benefited from nearshoring, though volatility in U.S. tariff frameworks has created uncertainty. To mitigate risks, Mexican exporters have increasingly utilized USMCA rules of origin to qualify for duty-free access to the U.S. market, with utilization rates rising from 45% in early 2025 to 85% by January 2026.