USMCA Is Under Review: What Midwest Businesses Should Be Watching in 2027

For Illinois and Midwest businesses, the future of the United States-Mexico-Canada Agreement is not simply a trade-policy issue happening in Washington.

It can affect where companies manufacture products, which components qualify for preferential tariff treatment, how agricultural goods move across borders, what manufacturers pay for steel and aluminum, and whether investments being planned today will operate under the same North American trade rules several years from now.

That matters especially in Illinois.

In 2025, Illinois exported approximately $80.2 billion in goods worldwide. Canada was the state's largest export market at approximately $18.1 billion, followed by Mexico at approximately $11.9 billion. Together, the two USMCA partners accounted for roughly $30 billion in Illinois exports. Illinois also exported approximately $74.4 billion in manufactured products, including chemicals, machinery, electronics, transportation equipment, and food products.

So when the rules governing North American trade change, the impact can reach well beyond multinational corporations.

It can affect a machinery company outside Chicago, an auto supplier in Michigan, a food producer in Wisconsin, an agricultural operation in Iowa, a distributor in Indiana, or a manufacturer sourcing components from both Mexico and Canada.

For businesses that manufacture, source, import, export, or invest anywhere in North America, 2027 is a good time to review how dependent your operations are on the current USMCA rules. TEIL Firms can help companies identify where changes to origin rules, tariffs, contracts, sourcing, or cross-border compliance could affect their North American strategy.

First: USMCA Has Not Ended

There has been understandable confusion about what happened during the agreement's first major review.

USMCA contains an unusual review mechanism. Article 34.7 gives the agreement an initial 16-year term and requires the three countries to conduct a joint review six years after the agreement entered into force.

If all three countries agree to extend the agreement during a six-year review, USMCA receives another 16-year term.

If they do not all agree, the agreement does not immediately terminate. Instead, the countries are required to conduct another joint review each year for the remainder of the existing term unless they subsequently agree to an extension.

That is what happened in 2026.

On July 1, 2026, representatives of the United States, Mexico, and Canada conducted the required six-year review. The United States did not agree to renew USMCA in its current form.

But USMCA remains in force.

Absent a later extension or another legal development, the agreement's existing term runs through 2036. The failure to extend it in 2026 instead triggered the annual review process contemplated by Article 34.7.

That makes the 2027 review more than a routine check-in.

It becomes another opportunity for the three governments to negotiate changes and determine whether they can reach agreement on extending the North American trade framework.

USTR Is Asking Businesses for Input Now

On October 2, 2026, the Office of the United States Trade Representative opened a new public consultation process in preparation for the 2027 USMCA joint review.

The deadline for written comments is January 12, 2027, at 11:59 p.m. Eastern Time.

USTR also plans to hold a public hearing. Businesses and organizations wishing to participate in that hearing must submit their requests to appear and summaries of their proposed testimony by the same January 12 deadline. The hearing date and location are expected to be announced separately.

That process gives businesses an opportunity to do more than simply watch the negotiations.

Manufacturers, agricultural businesses, trade associations, suppliers, exporters, importers, logistics companies, and other stakeholders can identify how the agreement is operating in practice and what changes would help—or potentially harm—their industries.

For companies heavily dependent on North American commerce, that may be worth considering.

Rules of Origin May Be One of the Biggest Issues to Watch

One of the most important questions in the review is likely to be who actually receives the benefits of USMCA.

Preferential tariff treatment is generally tied to rules of origin. Those rules determine whether enough of a product's manufacturing or content comes from within North America to qualify.

They are already especially detailed in the automotive sector.

USMCA increased the regional value-content requirement for qualifying automobiles to 75%, alongside additional requirements involving auto parts, steel and aluminum, and labor value content. The agreement also strengthened origin rules affecting other industrial products.

During 2026 negotiations, the United States and Mexico specifically discussed automotive rules of origin, rules for industrial goods, steel and aluminum, and economic security. USTR has also emphasized concerns about ensuring that the benefits of USMCA accrue primarily to the three member countries rather than allowing companies from outside the region to use Canada or Mexico as a route into preferential North American treatment.

This could become especially important for Midwest manufacturers.

Consider an Illinois manufacturer purchasing components from a supplier in Mexico.

The supplier may be located in Mexico, but where do its inputs come from?

If key electronics, steel, machinery, subassemblies, batteries, or other components originate outside North America, future changes to the rules of origin could affect whether the finished product continues to qualify for preferential treatment.

That is why businesses should increasingly understand not only their direct supplier, but the supply chain behind that supplier.

Automotive Businesses Have Particular Exposure

The automotive industry is likely to remain one of the most closely watched areas.

North American automotive manufacturing does not operate as three separate national industries. Vehicles and parts can cross borders multiple times during production.

USMCA's current rules attempt to encourage greater regional production by imposing specific North American content requirements.

But those rules remain part of the review discussion.

U.S.-Mexico negotiations in 2026 specifically addressed automobiles and automotive rules of origin, together with steel, aluminum, labor, and economic-security issues.

Stakeholders do not necessarily agree on how those rules should change. USTR's report to Congress on the operation of USMCA noted that some industry participants have advocated stronger origin requirements, while the National Association of Manufacturers expressed the view that the existing rules work well in most cases.

For Midwest auto and component manufacturers, the important point is therefore not to assume any particular outcome.

The practical issue is exposure.

A company should know how much of its production depends on current regional-content calculations, where its components originate, and what a tighter rule might do to its sourcing or costs.

Steel and Aluminum Are Closely Connected to the Review

Steel and aluminum have also been recurring subjects in the negotiations.

U.S. and Mexican officials discussed both sectors during the first, second, and third bilateral negotiating rounds in 2026.

This matters to the Midwest because steel and aluminum sit upstream of many other industries.

A change affecting steel does not remain confined to steel producers.

It can ultimately reach companies manufacturing:

automotive components, industrial machinery, appliances, construction products, fabricated metal goods, agricultural equipment, transportation equipment, and other finished products.

The policy debate also extends beyond where the final product is manufactured.

Some stakeholders have advocated stronger requirements concerning where steel must be melted and poured in order for downstream products to receive USMCA benefits. Others have cautioned against changes that could increase costs or complicate already-integrated supply chains. USTR's ongoing review process is intended in part to collect precisely these competing perspectives.

Businesses using significant amounts of steel or aluminum should therefore monitor not just tariff changes, but potential changes to origin rules and qualifying content.

Agriculture Is Also on the Table

Agriculture is another major issue for the Midwest.

Illinois alone ranked as the country's third-largest agricultural exporting state in the latest USTR data, with approximately $11.1 billion in agricultural exports in 2024, including major exports of soybeans, corn, and feed grains.

Agricultural issues were expressly included in the 2026 U.S.-Mexico negotiations surrounding the USMCA review.

The broader North American agricultural relationship also includes long-running disputes involving market access and agricultural trade policies.

For Midwest farmers, food manufacturers, processors, agricultural-equipment businesses, and companies supporting the agricultural supply chain, USMCA therefore matters in several ways.

It can affect not only the tariff treatment of agricultural products, but market access, regulatory requirements, transportation patterns, sourcing, and downstream demand.

A company may be affected even if it never directly exports a bushel of corn or a pound of food.

For example, an equipment manufacturer selling to agricultural customers may be exposed to the financial health of exporters. A food processor may rely on imported inputs. A logistics business may depend on cross-border agricultural volumes.

Trade rules have ripple effects.

North American Supply Chains Are Becoming a Strategic Issue

The 2026 USMCA discussions have repeatedly referred to strengthening North American manufacturing and regional supply chains.

U.S. and Mexican officials have discussed economic security and ways to limit reliance on non-market inputs in important North American supply chains. USTR has also identified concerns about investment and production by companies from outside the USMCA region using Mexico or Canada as a platform for accessing North American markets.

For businesses, that creates a broader question:

How North American is your North American supply chain?

A product may be assembled in Illinois with components from Mexico, while the Mexican supplier relies on subcomponents from China, and another key material comes through Canada.

Today, that structure may work.

But if future rules place greater emphasis on North American content, non-market inputs, substantial transformation, or regional sourcing, that same structure may produce a different compliance result.

This is why supplier mapping is becoming increasingly important.

Businesses need to understand not only the first tier of their supply chain but, for important products, where critical materials and components originate farther upstream.

Small and Mid-Sized Businesses Should Not Assume This Is Only for Major Manufacturers

USMCA includes provisions specifically intended to support small and medium-sized enterprises, and small businesses are deeply involved in cross-border North American trade.

That is especially relevant in Illinois.

USTR reports that 20,568 companies exported from Illinois locations in 2024, and approximately 88% were small and medium-sized businesses with fewer than 500 employees.

A company does not need a multinational legal department to be exposed to USMCA changes.

A relatively small company may:

source parts from Mexico;

sell finished products into Canada;

use a Canadian distributor;

manufacture through a Mexican contract manufacturer;

import industrial equipment;

sell agricultural products;

license technology across the border; or

depend on a North American supplier whose own costs are affected by trade rules.

That makes the review relevant to a much broader group of businesses than the companies usually associated with international trade negotiations.

Contracts Should Be Reviewed Before the Rules Change

USMCA uncertainty also raises a contract issue.

Businesses entering multi-year agreements today should consider what happens if the trade framework changes during the relationship.

Suppose an Illinois company signs a five-year manufacturing agreement with a Mexican supplier based on the assumption that the finished product will continue qualifying for preferential USMCA treatment.

What happens if an origin requirement changes?

Who pays if additional duties arise?

Can the supplier substitute components from another country?

Must the supplier disclose changes in material origin?

Who prepares the certification of origin?

Does the purchaser have audit rights?

Can pricing be renegotiated after a change in law?

Those are contractual questions—not merely customs questions.

A business cannot control how the three governments ultimately revise USMCA, but it can control whether its contracts anticipate regulatory change.

What Midwest Businesses Should Be Doing Before the 2027 Review

Companies do not need to predict the outcome of the negotiations. They do need to understand where they are exposed.

A practical 2027 USMCA review should include:

• Map Canada and Mexico exposure. Identify customers, suppliers, distributors, manufacturers, and important components involving either country.

• Review USMCA qualification. Determine which products currently rely on preferential treatment and what rule of origin supports that treatment.

• Look beyond direct suppliers. Identify significant non-North-American inputs embedded farther down the supply chain.

• Review automotive exposure. Vehicle and component businesses should understand regional value-content calculations and sourcing dependencies.

• Identify steel and aluminum dependencies. Even companies outside the metals industry may be affected by changes farther upstream.

• Evaluate agricultural exposure. Consider both direct exports and indirect dependence on agricultural and food-industry customers.

• Review contracts. Look for tariff, customs, certification, change-in-law, pricing, sourcing, and termination provisions.

• Preserve origin documentation. Businesses claiming USMCA treatment should ensure they can substantiate the claim.

• Stress-test sourcing alternatives. Determine how quickly the business could adjust if a key component no longer receives the expected treatment.

• Consider whether to participate in the review. Businesses with significant concerns about how USMCA is operating can evaluate whether submitting comments to USTR before January 12, 2027 is appropriate.

The TEIL Perspective

For Midwest companies, the most important question is not whether USMCA will be “good” or “bad” after the next review.

It is much more practical:

Which parts of your business depend on the rules that may change?

For one company, the answer may be its Mexican manufacturing operation.

For another, it may be Canadian customers.

For another, it may be imported steel, automotive components, agricultural exports, certificates of origin, supplier contracts, or an investment decision being made today based on expected North American tariff treatment.

Those risks should be identified before new rules take effect.

The continued USMCA review also reinforces a broader principle of international business planning: companies should avoid structuring long-term investments around the assumption that today's tariff, origin, or market-access rules will remain unchanged.

The stronger approach is to build enough flexibility into the supply chain, contracts, compliance systems, and international strategy to adapt when trade policy changes.

TEIL Firms assists Illinois and Midwest businesses with international trade and regulatory compliance, USMCA and country-of-origin issues, cross-border contracts, supplier and partner review, intellectual property protection, and global expansion strategy. If your company manufactures, imports, exports, or does business with Canada or Mexico, we can help identify where the 2027 USMCA review may affect your operations and what steps you can take now to prepare.

Sources & Current Status

This article reflects the USMCA review process as of October 3, 2026. On October 2, USTR opened its public consultation for the 2027 joint review; comments and requests to participate in the public hearing are due January 12, 2027.

USMCA remains in force. The United States declined to extend the agreement in its current form during the July 1, 2026 joint review, triggering the agreement's annual review process under Article 34.7 rather than immediate termination.

This article is provided for informational purposes only and does not constitute legal advice.