Why the USMCA review may not end in 2026

The biggest question surrounding the review of the United States-Mexico-Canada Agreement (USMCA) may no longer be whether the trade pact survives.

It is whether manufacturers will get the certainty they need to keep investing along the U.S.-Mexico border.

If the United States, Mexico, and Canada fail to reach an agreement to extend the trade pact during the 2026 review process, uncertainty surrounding manufacturing investments could continue for years, according to Jorge Torres, president of Interlink Trade Services.

“The USMCA does not disappear if an agreement is not reached this July,” Torres said.

Torres said there is widespread confusion surrounding the agreement’s so-called Sunset Clause, the review mechanism built into the trade pact that took effect in 2020.

“It requires annual reviews,” he said.

The six-year review is intended to determine whether the agreement will be extended for another 16 years beyond 2036.

“The ideal scenario would be to reach an agreement to extend the additional 16 years during this Sunset Clause review,” Torres said.

However, he believes recent meetings between Mexico and the United States, along with additional negotiations expected in Washington, suggest discussions could continue beyond 2026.

Investment uncertainty

For manufacturers operating across the Rio Grande Valley, Reynosa, Matamoros, Nuevo Laredo, and the broader North American supply chain, the biggest concern is uncertainty.

Torres warned that annual reviews could continue weighing on investment and expansion decisions long after the current review period ends.

“Companies cannot make decisions if the agreement is not extended and if the rules are not modified,” he said. “That creates uncertainty.”

Torres said industries such as automotive and metals manufacturing face a particularly complicated environment because USMCA negotiations are unfolding alongside separate discussions involving tariffs, regional-content requirements, and other trade restrictions promoted by the United States.

“For industries such as metals and automotive manufacturing, the situation is very complex,” he said.

The uncertainty comes as border industrial markets such as Reynosa have experienced rising industrial vacancy and projects that have been delayed while companies await greater clarity on the future of the trade agreement.

Trump administration seeks tougher regional-content rules

Torres said a stricter approach to trade policy was widely expected following President Donald Trump’s return to office.

“His policy is to bring more industry, more investment and more production to the United States,” he said.

Torres expects one of the central issues in the USMCA review will be increasing regional-content requirements in strategically important manufacturing sectors.

“There will be increased use of regional-value content, particularly from the United States,” he said.

Torres said some existing rules of origin that currently rely on tariff classifications could eventually shift toward stricter regional-content requirements.

Such changes could force manufacturers to source more parts and materials from within North America instead of relying on suppliers in Asia and other regions.

At the same time, Torres said the shift could create opportunities for Mexico.

“That will force companies, including foreign, Chinese, Asian and European companies, to establish raw-material and input plants within the region,” he said.

He added that Mexico will remain a critical part of North America’s manufacturing network.

The challenge for Mexico

Torres said the negotiations extend beyond tariffs and rules of origin.

The United States is also expected to raise concerns involving infrastructure, bureaucracy, security, labor conditions, the judicial system, and water availability.

“Mexico is going to have to do a lot of internal work,” he said.

Torres said one of Mexico’s primary objectives will be securing tariff conditions that remain more favorable than those available to competing countries.

“The key is negotiating a more favorable tariff position for Mexico than for other countries so that it remains competitive and investment continues,” he said.

‘The rules of the game are going to change’

While Torres believes some form of North American trade integration will continue, he cautioned that the final outcome remains uncertain.

“Nobody has a crystal ball,” he said.

Still, he expects trade ties among the three countries to endure.

“Yes, there will be continuity,” Torres said, “but the rules of the game are going to change.”

For manufacturers and investors along the U.S.-Mexico border, that may be the most important takeaway.

The uncertainty surrounding the USMCA review is no longer just about what happens in 2026. It is about whether businesses will receive the long-term certainty needed to make investment decisions that often stretch decades into the future.