USMCA at Six Years: What the mandatory review means for trade and North American supply

The 2026 USMCA review is more likely to produce targeted renegotiation and higher supply-chain uncertainty than a simple renewal, with metals and automotive trade most exposed.

• The agreement entered into force on July 1, 2020 and must be reviewed by July 1, 2026; this is not an expiry, but failure to extend it would trigger annual reviews, while withdrawal requires six months’ written notice.
• USMCA covers approximately $1.8–2 trillion of annual trilateral trade, including $1,645.66 billion of goods trade in 2025; Mexico was the largest source of US imports, ahead of China.
• The US may seek to raise automotive regional value content from 75% to 82% and require at least 50% of vehicle value to come from the US, potentially increasing producer costs and non-compliance risk.
• Energy, agriculture and tariffs remain contentious: Mexico required at least 54% of grid electricity to be supplied by CFE in 2025, while disputes continue over Canadian dairy access and Mexico’s restrictions on biotech corn.
• Metals freight volumes fell about 20% year on year in April 2026 and automotive trade grew only 0.8% while vehicle freight declined 5.0%; Canada and Mexico support a 16-year extension, but US signals favor substantial revisions or bilateral alternatives.

Takeaway: MUFG’s base case is targeted negotiation that preserves the core framework but tightens selected rules, creating modest short-term trade pressure and higher compliance costs; a contentious renegotiation or breakdown would pose materially greater risks to investment, supply-chain configuration and regional trade.