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Shippers must monitor and understand ongoing discussions around the United States-Mexico-Canada Agreement to react quickly to changes and help plan ahead, James Kim, ArentFox Schiff international trade partner, said during Supply Chain Dive’s July 15 event, “Supply Chain Outlook: Trends and Risks to Watch in 2026.”
Leaders from the three countries met earlier this month to kick off the joint review process of the trilateral trade agreement currently set to expire in 2036. The U.S., Mexico and Canada did not immediately extend the agreement for another 16 years, instead opting to launch an annual review process.
The U.S. is currently driving most of the negotiations, according to National Security and Global Trade Partner at DLA Piper Brian Janovitz. The U.S.-Mexico negotiations have been ongoing in a “relatively intense format,” he said, further noting that there is a “lot of work left ahead.” Meanwhile, conversations between the U.S. and Canada have “basically been nonexistent to this point” besides check-ins.
“So, in terms of offensive interest, it's really the U.S. interests that are on the table here,” Janovitz said.
The USMCA review outcome will have lasting impacts on a slew of critical industries such as steel and aluminum, dairy and agriculture. Electronics, semiconductors and critical minerals sectors may also be impacted.
“Aerospace, chemicals, softwood lumber, which has been a sticking point between the U.S. and Canada for a long time, these are just some of the sectors that could see changes or could see some impact from the continued negotiations and discussions on the USMCA,” Kim said.
Until the U.S., Mexico and Canada reach an agreement, here are three tips shippers should know about ongoing trade negotiations.
1. Work with existing USMCA trade rules
Shippers must get a handle on the existing USMCA rules of origin that apply to their products.
According to Kim, a lot of companies may assume that because they are importing from Canada or Mexico, they automatically qualify for USMCA exemptions, but that's not necessarily the case.
Once shippers fully grasp which rules apply, they are in a better position to understand how the USMCA discussions might impact their business, including shipping and importing operations, as well as what tariffs they might face, Kim said. Afterward, companies can map their exposure and game plans depending on how the negotiations play out.
“I think lastly, it's really just important to kind of monitor what's happening in terms of these discussions and trade policy in general so you can keep on top of changes and react relatively quickly to those changes and just kind of plan ahead,” Kim said.
2. Understand that trade policy priorities are changing
Trade priorities look different this time around. Compared with the past, there is a significant emphasis on national security that differs from traditional economic concerns, Janovitz said. Those distinctions will be evident in areas such as alignment on export controls and external tariffs in sectors “considered sensitive.”
Tariffs have also cast a shadow over USMCA discussions, Kim said. This is especially true in regard to rules of origin, which determine what goods qualify for USMCA treatment, and often what the subject of the tariffs will be.
Kim noted that there is no USMCA exemption for Section 232 steel, aluminum and copper tariffs. However, in May, the U.S. Commerce Department outlined a process for Canada and Mexico steel and aluminum producers to request lower Section 232 tariffs.
Kim further noted that there is also partial or complete relief for certain USMCA-qualifying auto parts. However, the U.S. has floated some proposals to Mexico to increase the regional content for automotives from 75% to 82% to qualify for the agreement.
3. Make sure your supply chains are optimized
As rules become increasingly complicated and change more frequently, it’s important to make sure that your supply chains are optimized to work for the company’s commercial objectives, Janovitz said.
“There's a lot that can be done there,” Janovitz said. “Some of it's understanding the rules and how that impacts the company's operations. Some of it can be on the front end.”
