What manufacturers need to know as the USMCA renewal review commences
The U.S.-Mexico-Canada Agreement (USMCA) is entering its first major review period since 2018, and manufacturers should expect potential competing priorities and adjustments.
The Office of the U.S. Trade Representative (USTR) opened its public comment period on September 17, 2025, as part of the required 2026 review. This was the first major test of the agreement since it took effect in 2020. Within weeks, USTR had received 1,500 written comments and 170 hearing requests. The agency ultimately expanded its public hearing schedule from one day to three to accommodate the volume.
The response shows how much is at stake. In 2024, trade in goods and services among the U.S., Canada and Mexico approached $2 trillion. Mexico is now the United States’ top trading partner, followed closely by Canada. For many U.S. manufacturers, the supply chain runs through all three countries multiple times before a product is complete. A single automotive part, for example, may cross a border seven or more times during production.
This level of integration is why the 2026 review matters. Under the agreement, the U.S., Canada and Mexico must meet on July 1, 2026, to determine whether to extend the USMCA for another 10 years, negotiate changes or withdraw. If they cannot reach consensus, the agreement continues annually until its scheduled sunset in 2036. While full withdrawal is unlikely, the path to renewal is far from smooth.
The volume of early comments show competing priorities, unresolved policy tensions and widespread concern about the broader trade environment. Stakeholders raised concerns about automotive rules of origin, electric vehicle supply chains, China’s investment footprint in Mexico, Canada’s digital services tax and the general strain on customs processing.
Manufacturers should prepare for continued uncertainty and evaluate how potential outcomes may affect supply chains, compliance obligations and long-term planning.
A changing trade environment creates day-to-day challenges
Many manufacturers are watching the USMCA review closely, but it’s only one part of the broader trade environment affecting costs and operations. Several trends are shaping decisions right now, regardless of how the review unfolds.
- Sourcing key inputs. Many manufacturers still can’t obtain all the raw materials or derivative materials they need domestically. Even when materials are available, price volatility and extended lead times create pressure across purchasing, inventory and production planning. These challenges will continue through the review period.
- Strain on customs processing. High import volumes, more frequent documentation reviews and strict enforcement requirements mean a single error — an incorrect code, a missing declaration or a mismatch in supplier paperwork — can delay shipments even when duties aren’t owed. Delays add cost and disrupt production schedules, especially for manufacturers operating on tight timelines or just-in-time systems.
- U.S. discussions on bilateral conversations with Canada or Mexico. While no decisions have been made, the possibility creates another area to monitor. Changes outside the USMCA framework can influence how the agreement functions in practice and how rules are interpreted.
USTR’s public comment period has always been part of the USMCA review process, but the volume submitted this year is notable. It reflects how much the industry wants clarity on the agreement itself and on how it interacts with other trade actions and emerging market shifts.
Several themes stand out:
- Automotive rules of origin remain a major focus. Manufacturers want clearer guidance on how content calculations are applied and how exceptions should work.
- Electric vehicles, batteries and critical minerals have moved to the center of the discussion. These areas were not as prominent during the original negotiation but now carry deep supply chain importance.
- Questions about China’s presence in Mexico, especially related to investment and production integration.
- Canada’s digital services tax drew comments from multiple groups who want to understand how it fits into broader trade commitments.
- Many comments raise practical concerns about cross-border movement, customs backlogs and paperwork. These challenges sit outside the agreement but affect how manufacturers experience trade day to day.
The comment period gives the three governments a clear view of industry priorities. It also reflects a shared message: the free movement of goods within North America is essential for competitiveness, and manufacturers need clarity to plan for the next decade.
How manufacturers can prepare now
Even without clarity on the final outcome of the review, manufacturers can take practical steps to reduce exposure and improve resilience during this period of uncertainty.
- Supply chain mapping where materials originate, where they cross borders and where bottlenecks are likely will manufacturers manage delays and adjust sourcing if needed.
- Strengthening rules of origin documentation by reviewing supplier declarations, confirming classifications and ensuring internal consistency across paperwork can help prevent avoidable delays. Enforcement is increasing even when rules have not changed.
- Building scenario plans can help leadership teams navigate uncertainty. The review may end in renewal with no changes, renewal with adjustments or additional negotiation. Each scenario carries different implications for sourcing, pricing and compliance.
- Communicating early with suppliers and logistics partners can help reduce surprises. Many partners may not be following the review closely, and early alignment can make future adjustments easier.
Some manufacturers also are watching the International Emergency Economic Powers Act (IEEPA) case currently before the Supreme Court. It’s important to understand what the case does and doesn’t cover. The case addresses a narrow legal question related to executive authority in trade actions. It doesn’t determine whether tariffs such as Section 232 or Section 301 remain in place, nor does it change the structure of the USMCA review.
Even after a ruling is issued, manufacturers should expect current tariffs, investigations and reciprocal trade actions to remain active unless separately changed by the administration. The case is worth following, but it should not be assumed to resolve the broader trade environment.
Looking ahead, the USMCA review is unfolding at a time when manufacturers are already managing tariffs, supply chain constraints, cost pressures and increased compliance oversight. The review won’t settle all of these issues, but it will potentially address areas of the agreement that need clarity or modernization.
Manufacturers who monitor developments, understand their exposure and prepare flexible plans will be better positioned to adapt as the review moves forward. North American trade is essential for growth, and this review period is a chance to ensure the system continues to support competitiveness for the next decade.
How Wipfli can help
Stay ahead of tariff changes impacting your supply chain. Wipfli’s industry-experienced team can help you navigate evolving trade policies, mitigate risks and build resilience. Visit our manufacturing page for strategic insights to protect your operations today.
