USMCA at Six: What the 2026 Review Could Mean for U.S. Businesses

The agreement is not expiring on July 1. But stricter origin rules, greater scrutiny of Chinese inputs, and continuing tariff uncertainty could reshape North American sourcing, manufacturing, and investment.

On July 1, 2026, the United States, Mexico, and Canada are scheduled to conduct the first formal six-year review of the United States–Mexico–Canada Agreement.

The review arrives at a particularly consequential moment.

North American manufacturers are trying to reduce dependence on distant or politically vulnerable supply chains. U.S. companies are moving some operations from China to Mexico. Governments are increasing their scrutiny of foreign subsidies, forced labor, critical minerals, steel, automobiles, advanced technology, and other economically sensitive products.

At the same time, businesses continue to depend on the USMCA for preferential tariffs, predictable market access, integrated production, customs procedures, digital trade, services, agriculture, intellectual-property protection, and regional investment.

For U.S. business owners, the review is not merely a diplomatic meeting among three governments.

Its outcome could affect:

• Whether goods continue to qualify for preferential treatment;

• Which foreign components can be included in North American products;

• How manufacturers document origin;

• Whether nearshoring to Mexico delivers the expected tariff advantages;

• How tariff increases are allocated under existing contracts;

• Whether regional supply chains continue to attract investment; and

• Whether businesses must prepare for years of recurring uncertainty.

The most important legal point is also the most frequently misunderstood:

The USMCA does not automatically expire on July 1, 2026.

The review could nevertheless begin a period of annual negotiations and commercial uncertainty if the three governments do not agree to extend the agreement.

What the Six-Year Review Actually Does

The USMCA entered into force on July 1, 2020, replacing the North American Free Trade Agreement.

Article 34.7 provides for an initial 16-year term. The agreement is therefore currently scheduled to remain in force until 2036 unless it is extended or a country separately withdraws.

On the sixth anniversary of its entry into force, the USMCA Free Trade Commission must meet to:

• Review the operation of the agreement;

• Consider recommendations submitted by the parties;

• Decide whether appropriate action should be taken; and

• Determine whether all three countries wish to extend the agreement for a new 16-year term.[1]

If the United States, Mexico, and Canada all confirm that they wish to continue the agreement, its term is extended for another 16 years, and the parties return to the six-year review cycle.

If one or more countries do not confirm an extension, the USMCA does not immediately terminate. Instead, the parties must conduct another review the following year and continue annual reviews for the remainder of the existing term unless they later agree to extend it.

If no extension is agreed upon before the end of the original term, the agreement would terminate in 2036.

That distinction matters.

A decision not to extend on July 1 would not immediately restore tariffs on all North American trade. It would, however, create recurring uncertainty concerning whether the agreement will remain in effect beyond 2036.

That uncertainty could affect investments being planned today.

A company deciding whether to build a plant, enter a 15-year lease, finance new equipment, establish a Mexican subsidiary, or sign a long-term supply agreement must consider whether the commercial assumptions supporting the project remain reliable.

Review, Amendment and Withdrawal Are Different Legal Actions

The six-year review should also be distinguished from an amendment or withdrawal.

The parties may agree in writing to amend the USMCA. An amendment becomes effective after the required domestic approval procedures are completed, unless the parties agree to another effective date.

A country may also withdraw from the agreement by giving written notice to the other parties. Withdrawal would take effect six months after notice, while the agreement could remain in force between the two remaining countries.[1]

These are legally distinct processes.

A difficult review does not, by itself, amend the rules or constitute withdrawal. Similarly, a government’s public criticism of the agreement does not automatically change the duties owed on a shipment entering the country.

Businesses should therefore distinguish among:

• A proposal made during negotiations;

• A political statement;

• An agreed recommendation;

• A formally adopted amendment;

• A new customs regulation;

• A government withdrawal notice; and

• An actual change in the law applicable to an entry.

Commercial decisions should be based on the legally effective measure—not merely the latest headline.

What the United States Is Seeking

The United States and Mexico have already conducted bilateral negotiating rounds in preparation for the review.

Official statements identify several priority areas:

• Automotive rules of origin;

• Steel and aluminum;

• Rules of origin for other industrial goods;

• Agriculture;

• Labor;

• Environmental obligations;

• Economic security;

• Regulatory compatibility; and

• Ensuring that the agreement’s benefits primarily accrue to the three participating countries.[2]

The United States has also emphasized limiting the use of “non-market inputs” in North American supply chains and addressing what it describes as free-riding by third countries.

Although official statements do not always name the countries being targeted, this concern is widely understood to include Chinese materials, components, investment, and production entering North American supply chains through Mexico or Canada.

The issue is particularly important because many businesses have adopted a “China-plus-one” or nearshoring strategy.

A company may import Chinese components into Mexico, conduct manufacturing or assembly there, and then ship the finished product to the United States.

Whether the final product qualifies for USMCA treatment depends on the applicable product-specific rule of origin. It does not depend solely on the location of the final factory.

A review that tightens origin requirements or limits specified third-country inputs could change the economics of those transactions.

Canada’s Priority Is Predictability

Canadian stakeholders have strongly supported preserving predictable, tariff-free North American market access.

During Canada’s public consultation process, businesses and industry groups warned that sudden tariffs, fragmented border procedures, and frequently changing requirements increase prices and discourage investment.

Canadian participants also called for:

• Simpler origin procedures;

• More predictable dispute settlement;

• Harmonized customs practices;

• Protection against unilateral tariffs;

• Relief for low-value shipments;

• Preservation of integrated manufacturing and energy trade; and

• A cautious “do no harm” approach to the review.[3]

Canada is also expected to defend politically sensitive policies, including its agricultural supply-management system.

These differences demonstrate why the review may become more complicated than a simple vote to renew the existing agreement.

The parties generally share an interest in maintaining North American trade. They do not necessarily agree on the meaning of fair trade, the proper level of domestic production, or the extent to which each country should protect sensitive industries.

Mexico Supports Extension—but Negotiations Are Continuing

Mexico has publicly supported extending the agreement for another 16-year term.

At the same time, U.S. and Mexican officials are negotiating issues involving automobiles, metals, agriculture, industrial origin rules, economic security, labor, environmental requirements, and regulatory compatibility.[4]

Mexico’s interest in extension is understandable.

Its manufacturing sector is deeply connected to the United States, and the expectation of continued preferential access supports investment in factories, logistics, industrial parks, automotive production, medical devices, electronics, aerospace, and other industries.

But an extension may come with demands for changes.

Mexico may be asked to demonstrate that products entering the United States are genuinely North American—not merely Chinese or other foreign products that received limited assembly, processing, or relabeling in Mexico.

That pressure could affect U.S. businesses using Mexican contract manufacturers, maquiladoras, distributors, or subsidiaries.

Manufacturing in Mexico Does Not Automatically Create Mexican Origin

One of the most important misconceptions surrounding nearshoring is that a product becomes Mexican simply because it is assembled or shipped from Mexico.

That is not necessarily true.

To receive preferential treatment under the USMCA, a good must satisfy the agreement’s applicable rule of origin.

Depending on the product, the rule may require:

• That the product be wholly obtained or produced in North America;

• A specified change in tariff classification;

• A minimum regional-value-content percentage;

• The use of specified originating materials;

• Completion of particular manufacturing processes; or

• A combination of these requirements.

A product can be physically manufactured in Mexico and still fail to qualify.

For example, if a product’s essential components remain non-originating and the Mexican operations do not produce the required tariff shift or regional value, the finished good may not be eligible for preferential treatment.

The correct analysis generally requires:

1. Accurate tariff classification of the finished product;

2. Identification of the applicable USMCA product-specific rule;

3. Classification and origin of relevant materials;

4. Review of manufacturing processes;

5. Calculation of regional value where required;

6. Confirmation that other applicable conditions are satisfied; and

7. Preservation of supporting records.

A commercial invoice stating “Made in Mexico” is not, by itself, proof that the product qualifies under the USMCA.

Origin Certification Could Receive Greater Scrutiny

The USMCA does not require the former NAFTA certificate form. A certification may be prepared in different formats if it contains the required data elements.

The certification may generally be completed by the importer, exporter, or producer, subject to the applicable rules.

That flexibility does not eliminate the need for substantiation.

The importer claiming preferential treatment is responsible for exercising reasonable care and should be able to support the origin claim if customs authorities request verification.[5]

Businesses should not treat a certification as a routine document that a supplier signs automatically.

The company should determine:

• Who has enough information to certify origin;

• Whether the certifier has reviewed the bill of materials;

• Whether supplier affidavits are current;

• Whether manufacturing processes have changed;

• Whether the same certification covers identical goods;

• Whether non-originating materials have been properly classified;

• Whether regional-value calculations are accurate; and

• Whether records will remain available for the required period.

A supplier’s unsupported assurance may not protect the importer from denied preference, additional duties, interest, penalties, or commercial disputes.

Automotive Companies Face the Greatest Immediate Exposure

Automobiles and automotive parts have some of the USMCA’s most complicated origin requirements.

The agreement raised the North American regional-value-content requirement for passenger vehicles and light trucks to 75%, compared with 62.5% under NAFTA. It also includes separate requirements for core parts, labor value, and specified steel and aluminum purchases.[6]

Automotive rules have become a central part of the 2026 negotiations.

Any tightening could affect:

• Vehicle manufacturers;

• Tier-one and lower-tier suppliers;

• Electronics producers;

• Battery manufacturers;

• Steel and aluminum suppliers;

• Plastics companies;

• Tooling companies;

• Logistics providers; and

• Businesses supplying software or advanced components.

A change affecting one component can move through several levels of the supply chain.

A U.S. company may not manufacture vehicles, but it may supply sensors, fasteners, wiring, coatings, packaging, machinery, or other inputs to a company that does.

If the customer must replace non-originating inputs to preserve vehicle eligibility, the supplier may lose business—or gain a new opportunity to replace a non-North American source.

Businesses should therefore understand not only whether their own goods qualify, but also how their goods affect the eligibility of their customers’ finished products.

Stricter Rules Could Create Opportunities for U.S. Suppliers

Tighter origin rules are not exclusively a risk.

They may create new opportunities for U.S. manufacturers capable of replacing Chinese or other non-originating inputs.

Companies producing:

• Automotive parts;

• Industrial machinery;

• Medical-device components;

• Chemicals;

• Metals;

• Packaging;

• Electronics;

• Batteries;

• Critical-mineral products; and

• Agricultural inputs

may find that North American buyers have a stronger incentive to source regionally.

The legal and commercial question is whether the U.S. supplier can document that its product qualifies.

A supplier seeking to market itself as a USMCA-compatible alternative should be prepared to provide accurate origin information, maintain records, protect proprietary cost data, and enter agreements defining the scope of its certification obligations.

It should not provide an unconditional origin warranty without understanding the product-specific rule and the information on which the warranty is based.

Steel and Aluminum Remain Politically Sensitive

Steel and aluminum are central to the review because they affect automobiles, construction, machinery, infrastructure, packaging, energy, and national-security policy.

Governments are increasingly concerned that steel or aluminum produced outside North America may be routed through a USMCA country, minimally processed, and then entered under preferential conditions.

Businesses purchasing metal products should be prepared for demands for more detailed information, including:

• Mill certificates;

• Country of melt and pour;

• Country of smelt and cast;

• Producer identity;

• Material composition;

• Production location;

• Processing history; and

• Documentation supporting origin.

The country from which a metal product is shipped may not answer every customs or trade-remedy question.

Companies should also distinguish USMCA eligibility from exposure to other measures, including national-security tariffs, antidumping duties, countervailing duties, and country-specific restrictions.

A product may qualify as originating under one legal regime while remaining subject to another trade measure.

Agriculture and Food Trade Could Also Be Affected

Agricultural trade among the United States, Mexico, and Canada is highly integrated.

Farmers, food processors, grocery companies, restaurants, packaging businesses, transportation companies, and distributors depend on cross-border movement of livestock, grains, dairy products, produce, ingredients, beverages, and finished foods.

The negotiations may address:

• Market access;

• Tariff-rate quotas;

• Product labeling;

• Sanitary and phytosanitary requirements;

• Agricultural biotechnology;

• Classification disputes;

• Origin verification;

• Seasonal restrictions; and

• Regulatory compatibility.

For U.S. agricultural exporters, a change affecting market access or Canadian or Mexican import requirements could reduce sales or increase documentation costs.

For U.S. food businesses that use Canadian or Mexican ingredients, the concern may be different: whether the finished product continues to qualify and whether suppliers can provide the necessary traceability.

Contracts should identify who is responsible for:

• Import permits;

• Health certificates;

• Product registration;

• Label approval;

• Origin certification;

• Rejected shipments;

• Border inspection delays; and

• Changes in agricultural restrictions.

Medical Devices, Pharmaceuticals and Cosmetics May Benefit From Regulatory Cooperation

The United States and Mexico have discussed increased regulatory compatibility in sectors including medical devices, pharmaceuticals, and cosmetics.[2]

Greater alignment could reduce duplicated testing, inconsistent documentation, and regulatory delay.

It could also create new obligations.

A company may need to determine whether:

• A U.S. approval is recognized in Mexico;

• Local registration remains required;

• The Mexican importer must hold a particular authorization;

• Labels must be translated or modified;

• A local responsible party is necessary;

• Product claims comply with local law;

• Adverse events must be reported in both countries; and

• Confidential regulatory information will be protected.

Regulatory compatibility does not necessarily mean regulatory identity.

Businesses should continue evaluating each country’s requirements rather than assuming that a product lawfully sold in the United States may automatically be sold throughout North America.

Labor Compliance Is Now a Trade Issue

The USMCA’s Facility-Specific Rapid Response Labor Mechanism permits expedited review of alleged denials of freedom of association and collective-bargaining rights at covered facilities in Mexico.

The United States has used the mechanism in matters involving factories, mines, food companies, and automotive suppliers. In some cases, the United States has suspended liquidation of unliquidated entries from the affected facility while the review proceeds.[7]

For U.S. companies sourcing from Mexico, labor compliance is therefore not merely a corporate-social-responsibility issue.

It can affect:

• Customs treatment;

• Shipment release;

• Supplier continuity;

• Customer relationships;

• Public reputation;

• Contract performance; and

• The value of inventory already in transit.

A company should know which facility produced its goods—not merely the name of the exporter or distributor.

Supplier agreements should require compliance with applicable labor laws and should provide rights to investigate, demand remediation, suspend orders, or terminate the relationship if a facility becomes subject to enforcement action.

Smaller Businesses May Be Disproportionately Affected

Large multinational companies often have customs departments, regional compliance teams, sophisticated enterprise systems, and direct access to government officials.

Smaller companies may rely on:

• A foreign supplier’s product description;

• A broker’s tariff code;

• A distributor’s origin certificate;

• A freight forwarder’s instructions; or

• A standard purchasing agreement that does not address tariff changes.

That reliance can be dangerous.

The importer of record generally remains responsible for the accuracy of the customs declaration.

A small business may also be less able to absorb:

• A denied preference claim;

• A retroactive duty bill;

• A border delay;

• A supplier’s price increase;

• A demand for additional inventory;

• A lengthy origin verification; or

• The cost of changing manufacturers.

The review should therefore prompt smaller businesses to examine their North American transactions now rather than waiting for final government action.

The Contract Questions Businesses Should Be Asking

A change in trade policy becomes a private business dispute when the contract does not clearly allocate the resulting cost.

1. Who Bears New Tariffs or Lost Preference?

The agreement should address what happens if:

• A product no longer qualifies under the USMCA;

• Customs rejects an origin certification;

• A new tariff or quota is imposed;

• A tariff exclusion expires;

• A trade-remedy order applies; or

• The parties disagree about country of origin.

Terms such as “all taxes included” or “delivered duty paid” can create significant exposure if they are not drafted carefully.

2. Who Must Prove Origin?

The supplier may be required to provide:

• Certifications;

• Bills of materials;

• Producer affidavits;

• Cost information;

• Manufacturing records;

• Mill certificates;

• Transportation records; and

• Cooperation during a customs verification.

The agreement should also specify whether the buyer may audit the information and how confidential cost and production data will be protected.

3. What Happens if the Certification Is Wrong?

The contract should address responsibility for:

• Additional duties;

• Interest;

• Penalties;

• Broker fees;

• Storage;

• Demurrage;

• Legal expenses;

• Lost customer contracts; and

• Government investigations.

An indemnification provision should not be broader than the supplier’s ability to verify the relevant facts. At the same time, an importer should not accept all risk when the supplier controls the manufacturing and origin information.

4. Can Prices Change?

Suppliers may seek the right to increase prices when tariffs, metal costs, labor rules, origin requirements, freight charges, or compliance expenses change.

The buyer should determine:

• Whether the adjustment requires documentation;

• Whether it is tied to actual cost;

• Whether decreases must also be passed through;

• Whether there is a cap;

• Whether the buyer may terminate; and

• How frequently the price may change.

5. Is There a Change-in-Law Clause?

A properly drafted change-in-law clause can address new tariffs, customs rules, origin requirements, labeling obligations, or regulatory approvals.

The clause should not automatically excuse performance whenever compliance becomes more expensive.

It should define:

• What qualifies as a change in law;

• Who must provide notice;

• Whether the parties must attempt mitigation;

• How costs are allocated;

• Whether alternative sourcing is required;

• When termination becomes available; and

• What happens to existing inventory and purchase orders.

6. Are Incoterms Being Used Correctly?

Incoterms help allocate specified transportation costs, delivery responsibilities, and risks.

They do not determine whether a product qualifies under the USMCA, who owns the intellectual property, who bears every tariff increase, or whether the supplier must indemnify the importer.

The sales agreement should address those issues expressly.

7. Can the Buyer Change Suppliers?

A long-term exclusivity or minimum-purchase commitment may prevent a company from changing suppliers when a product loses preferential status.

Contracts should consider:

• Alternative sourcing;

• Dual sourcing;

• Temporary suspension;

• Failure to maintain origin status;

• Repeated customs violations;

• Supplier insolvency;

• Government enforcement; and

• Persistent delivery problems.

Nine Steps U.S. Businesses Should Take Now

1. Identify Every Product Using USMCA Preference

Do not assume that the customs broker has a complete legal analysis. Create a list of products, tariff classifications, certifiers, suppliers, and supporting records.

2. Confirm the Applicable Rule of Origin

Review the product-specific rule and determine whether the current manufacturing process satisfies it.

3. Map Non-North-American Inputs

Identify Chinese and other third-country materials, components, technology, and ownership interests within the supply chain.

4. Test Supplier Certifications

Request the information supporting important certifications rather than waiting for a customs verification.

5. Review Long-Term Contracts

Examine tariff allocation, origin warranties, audit rights, price adjustments, change in law, termination, force majeure, and dispute resolution.

6. Evaluate Nearshoring Assumptions

Determine whether moving final assembly to Mexico actually produces USMCA origin and whether the project remains economically viable if the rules become stricter.

7. Strengthen Labor and Compliance Due Diligence

Identify the actual facility producing the goods and review labor, customs, sanctions, forced-labor, and other regulatory risks.

8. Develop Alternative Suppliers

A second supplier should be commercially qualified and legally compliant before a disruption occurs.

9. Monitor Legally Effective Changes

Distinguish negotiating demands from adopted amendments, customs instructions, regulations, or tariff actions.

How TEIL Firms Can Help

The USMCA review will not affect every company in the same way.

A U.S. importer may need to determine whether its Mexican supplier’s product actually qualifies. A manufacturer may need to replace Chinese inputs. An exporter may need stronger distributor protections in Canada. An automotive supplier may need to calculate regional value. A food company may need to address labeling, agricultural restrictions, or rejected shipments. A business expanding into Mexico may need to determine whether its nearshoring strategy provides the expected tariff and market-access benefits.

The Evans International Law Firms, LLC—TEIL Firms—helps businesses translate trade-policy developments into practical legal and commercial decisions.

Our North American trade and international business services include:

• USMCA eligibility and origin analysis;

• Tariff-classification review;

• Origin-certification and recordkeeping guidance;

• Automotive and industrial supply-chain issue spotting;

• Country-of-origin and substantial-transformation analysis;

• Nearshoring and Mexico market-entry planning;

• International manufacturing and supply agreements;

• Canadian and Mexican distribution agreements;

• Tariff, change-in-law, and price-adjustment clauses;

• Supplier warranties, audits, and indemnification provisions;

• Customs, labor, forced-labor, and trade-compliance risk reviews;

• Intellectual-property protection for cross-border manufacturing;

• International payment and dispute-resolution provisions; and

• Supply-chain diversification planning.

A targeted USMCA and North American Trade Risk Review can help determine:

• Whether your goods currently qualify;

• Whether your suppliers can support their origin certifications;

• Where Chinese or other non-originating inputs create exposure;

• Who bears the financial risk if preference is denied;

• Whether your contracts address future rule changes;

• Whether a proposed Mexican operation will produce the intended customs result; and

• What should be corrected before the rules or enforcement priorities change.

Businesses should not wait for a denied claim, unexpected tariff assessment, or supplier dispute to discover that a North American transaction was structured on an unsupported origin assumption.

Conclusion

The July 1 USMCA review is not an automatic expiration event.

The agreement remains in effect, and even a failure to agree on an extension would begin annual reviews rather than immediate termination.

But that does not make the review commercially insignificant.

A prolonged period of annual negotiations could discourage investment and make long-term planning more difficult. Stricter origin requirements could change which suppliers remain competitive. Increased scrutiny of Chinese inputs could undermine some nearshoring arrangements. New requirements concerning automobiles, metals, labor, agriculture, and regulatory compatibility could alter how businesses structure their supply chains and contracts.

For U.S. businesses, the most important question is not merely whether the three governments extend the agreement.

It is whether the company can prove that its products qualify, withstand a change in the rules, and enforce contracts that clearly allocate the resulting costs.

North American integration will remain an important business opportunity.

The companies best positioned to benefit will be those that treat origin, customs, labor compliance, supplier documentation, and contract allocation as central parts of their business strategy—not paperwork to be addressed after the shipment reaches the border.

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This article is provided for general informational purposes and does not constitute legal advice. USMCA eligibility, country of origin, tariff treatment, customs liability, and contract rights depend on the product, manufacturing process, transaction structure, parties, and applicable law. To get more support, click the link below.