For years, the US-Mexico-Canada Agreement (USMCA) provided organizations with a relatively stable framework for North American trade. That certainty is now in question.
On July 1, 2026, the US government declined to renew the agreement at the mandatory six-year review deadline, triggering annual reviews under the agreement’s sunset provision. While USMCA remains fully in force, the decision introduces a prolonged period of uncertainty that could continue until 2036 unless the parties agree to an extension.
"The biggest supply chain risks often aren't the events themselves, but the uncertainty they create," says Tony Pelli, Global Practice Director, Security & Resilience. "Organizations that understand their exposure and build flexibility into their operations are typically better positioned to navigate changing conditions."
Why this matters now
The review process is expected to focus on several contentious issues, including stricter automotive rules of origin, manufacturing competitiveness, and efforts to prevent Chinese goods from accessing US markets through North American trade channels.
As negotiations unfold, organizations may need to regularly reassess:
- Sourcing strategies
- Supplier relationships
- Manufacturing footprints
- Trade compliance programs
- Long-term investment decisions
Which industries face the most exposure?
Automotive manufacturers are likely to remain at the center of negotiations. Cross-border supply chains depend heavily on components moving between the US, Mexico, and Canada. Any changes to rules of origin could increase compliance requirements and operational costs.
Industrial manufacturers, including electronics, machinery, and aerospace organizations, may face increased scrutiny around component sourcing and origin verification.
Food and beverage producers could encounter longer-term uncertainty around market access, agricultural trade provisions, and future dispute-resolution mechanisms.
Retail, apparel, footwear, and consumer goods organizations may experience growing pressure to strengthen traceability programs, particularly as policymakers focus on preventing non-regional goods from benefiting from USMCA preferences.
"Trade agreements increasingly intersect with broader issues like supply chain transparency, resilience, and geopolitical risk," Pelli explains. "Having visibility beyond immediate suppliers provides significant advantage when regulations or market conditions change."
What should organizations do today?
The agreement remains fully operational, and no immediate changes to trade flows are expected. However, waiting for negotiations to conclude may leave organizations unprepared for future developments.
Your next steps:
- Map suppliers and sourcing dependencies across North America, including inputs into North American supply chains from China and elsewhere.
- Evaluate alternate sourcing strategies and regional manufacturing options.
- Strengthen trade compliance and origin-verification processes.
- Run scenario-planning exercises to understand potential impacts under different negotiation outcomes.
Looking ahead
Between now and 2030, annual reviews could create recurring uncertainty around procurement, investment, and supply chain planning. By the early 2030s, outcomes will likely become clearer. Negotiators may ultimately reach a revised agreement that provides a renewed framework for North American trade, or uncertainty could continue as the 2036 deadline approaches.
Either way, organizations should view this moment as an opportunity to strengthen resilience rather than simply react to future announcements.
"Now is the time to understand where your vulnerabilities exist and build options before they're needed," says Pelli.
How is your organization preparing for a decade of potential change across North American supply chains?
