U.S. declines to renew USMCA, creating new uncertainty for Rio Grande Valley trade

The United States has declined to renew the U.S.-Mexico-Canada Agreement, or USMCA, in its current form, creating new uncertainty for trade-dependent regions like the Rio Grande Valley even though the agreement remains in effect.

There are no immediate changes to tariffs or customs procedures. Instead, businesses that rely on cross-border commerce now face uncertainty as the United States, Mexico and Canada begin negotiating the agreement’s future under a new annual review process.

For the Valley, where international trade drives manufacturing, logistics, customs brokerage, agriculture and industrial development, that uncertainty could influence long-term investment and hiring decisions.

The concern is one that local trade experts have been warning about for months.

Jorge Torres, president of Interlink Trade Services, previously told the Rio Grande Valley Business Journal that continued annual reviews could leave manufacturers without the long-term certainty needed to make investment decisions.

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

Those concerns were echoed this week by the Border Trade Alliance.

“The Border Trade Alliance is concerned that any sign that the U.S. might eventually exit USMCA injects unnecessary uncertainty into the future of North American trade at a time when businesses need stability to invest, hire, and grow,” Border Trade Alliance Chairman Pete Sepulveda Jr. and President Britton Mullen said in a joint statement.

Sepulveda also serves as executive director and administrator of the Cameron County Regional Mobility Authority.

The Border Trade Alliance said it supports modernizing the agreement but warned against changes that could weaken the trade framework that has integrated the economies of the United States, Mexico and Canada for more than three decades.

“We urge all three governments to pursue reforms that strengthen USMCA while preserving the certainty and market integration that have made North America more competitive,” the organization said.

The six-year review is built into USMCA, which took effect in 2020 after replacing the North American Free Trade Agreement. 

Under the agreement’s sunset provision, the three countries had the option of extending the pact for another 16 years beyond 2036. By declining to renew it now, the United States has triggered annual reviews while negotiations continue. Unless all three countries eventually agree to extend the agreement, USMCA is scheduled to expire in 2036.

The Trump administration has said it wants to use the review process to address trade deficits, strengthen U.S. manufacturing and tighten rules governing North American supply chains, particularly in the automotive sector.

For now, businesses can continue operating under USMCA’s existing rules. The biggest immediate impact is not new tariffs but renewed uncertainty over the future of the trade agreement that underpins much of the Valley’s cross-border economy.