As global markets continue grappling with geopolitical supply chain disruptions, former U.S. President Donald Trump has sent shockwaves through North American trade circles by suggesting he might let the USMCA agreement expire in 2026 if reelected, potentially triggering a complete renegotiation with Mexico and Canada.
This declaration transforms what was meant to be a routine six-year review of the United States-Mexico-Canada Agreement (USMCA) into a potential inflection point for regional manufacturing ecosystems. The 2020 trade pact currently serves as the institutional foundation for North American supply chains, governing critical areas including automotive rules of origin, digital commerce, intellectual property, and labor standards.
The Looming Deadline
During recent remarks, Trump explicitly stated: "USMCA has about a year left to run. We'll let it expire, or we might make another deal with Mexico and Canada." He criticized previous negotiators for allowing what he called unfair advantages to America's neighbors, vowing to restore U.S. leverage through potential tariff reinstatements.
The former president's core objectives include:
- Implementing automotive tariffs to incentivize production reshoring to the U.S.
- Halting perceived manufacturing outflow to Mexico
- Redefining trade terms with both neighboring nations
When USMCA reaches its first review period in 2026, the three signatories must collectively decide between:
- Extending the agreement unchanged until 2042
- Adopting annual review mechanisms through 2036
Failure to reach consensus would subject businesses to a decade of regulatory unpredictability, with cascading effects across agricultural trade, industrial supply chains, and cross-border investment frameworks.
Strategic Implications for Businesses
The potential disintegration of USMCA threatens to destabilize the three pillars of North American manufacturing stability: predictable trade costs, institutional certainty, and established supply chain geography. Companies face more than just tariff fluctuations—they must prepare for comprehensive restructuring of:
- Supply chain financing models
- Origin compliance requirements
- Cross-border logistics networks
- Investment return calculations
Mexico's nearshoring advantages may face volatility—potentially strengthening if U.S. regional dependence increases, but equally vulnerable to erosion from prolonged policy uncertainty. The coming three years represent a critical window for strategic repositioning before potential structural changes take effect.
Four Essential Preparations
Businesses with North American exposure should immediately initiate:
- Scenario modeling: Quantify operational impacts under various tariff and rule change possibilities
- Localization acceleration: Increase Mexican procurement and processing to hedge against stricter origin rules
- Market diversification: Reduce overreliance on U.S. export channels
- Compliance reinforcement: Strengthen documentation systems anticipating heightened audits
North America's trade environment has entered a new era of institutional fluidity. Strategic agility—not passive adaptation—will separate market leaders from vulnerable competitors in the coming realignment.