How companies can prepare for the USMCA review

The review mechanism presents both potential opportunities and challenges for companies operating across North America as each signatory to the agreement has the option to push for changes to the USMCA across a broad range of issues. Given the meaningful impact of the existing agreement, the dynamic trade policy landscape, and the range of potential outcomes, companies are encouraged to take action in preparation for the review process.

What is required under the USMCA review mechanism?

The requirements for this review are set forth both in the text of the agreement and the USMCA Implementation Act (Public Law No: 116-113), which codifies how the US enforces and monitors the pact.

Article 34.7 of the USMCA introduces a formal review process, requiring the US, Canada and Mexico (the “Parties”) to periodically assess the functioning of the agreement. The initial USMCA review is scheduled for July 1, 2026, six years after the agreement’s entry into force. If each Party agrees to extend the terms of the agreement, then subsequent reviews will take place at the next six-year interval. If, as part of the six-year review, a Party does not agree to extend the term of the USMCA for another 16-year period, then an annual joint review will take place annually until the expiration of the agreement. If a Party does not agree to extend the USMCA during the joint review, it can opt to do so at any time before the agreement expires.

The USMCA Implementation Act requires timely congressional reporting and public notification of review-related activities. It requires the United States Trade Representative (USTR) to provide stakeholders with the opportunity to present their views relating to the operation of the USMCA. It also compels the agency to produce a report to Congress assessing the operation of the USMCA; recommendations for actions to be proposed at the review; previous efforts, if any, to address any concerns that underly USTR’s recommendations; and the views of the advisory committees. USTR is required to submit this report to Congress no later than January 2, 2026.

USTR’s public consultation process

Under the Implementation Act, USTR is required to seek public input on the operation of the agreement and recommendations for the joint review. On September 16, USTR published a Federal Register Notice launching this public process.

As part of the notice seeking stakeholder input, USTR invited comments on Mexico and Canada’s compliance with the terms of the agreement, recommendations to promote balanced trade, new market access, and alignment on economic security with Mexico and Canada; how USMCA promotes or effects the investment climate in North America; strategies for strengthening North American economic security and competitiveness; and cooperation on issues related to non-market policies and practices of other countries.

USTR received more than 1,500 written comments and 175 requests to testify at the public hearing scheduled for December 3-5, 2025.

While the public process is one important way to engage with the administration and convey priorities, USTR and Congress are likely to continue to engage with stakeholders beyond the formal comment process over the course of the review.

What issues are likely to arise during the review?

The USMCA review will undoubtedly cover a host of substantive issues related to implementation of the pact’s commitments. These issues will range from rules of origin, digital trade, labor and environmental commitments, dispute settlement mechanisms, agricultural trade, biologics, customs and trade facilitation, to supply chain resilience and others. In the context of rules of origin, it is widely anticipated that the US will want to address concerns over Chinese inputs in products within the North American region, as well as limit the ability of third countries to benefit from the terms of the agreement.

While outside the context of the agreement’s text, the review will also have to grapple with the current tariff environment – including the imposition of tariffs on non-USMCA qualifying goods from Canada and Mexico due to US concerns related to immigration and fentanyl. In the case of Canada, non-qualifying USMCA goods face a 35% tariff (except energy and potash), while non-qualifying USMCA goods from Mexico face a 25% tariff (except potash). For businesses who claim preferential duty treatment on goods imported into the U.S., the benefit of that treatment has grown significantly. For businesses who opted not to reorganize supply chains around the North American trading bloc or to forgo taking the administrative steps necessary to prove USMCA origin, the consequence of doing so has grown more costly.

Recall, too, that in 2019, the Parties made commitments in “side letters” to address concerns related to investigations under Section 232 of the Trade Expansion Act of 1962. For example, the US and Canada entered into a side letter on the Section 232 process, whereby the US committed that it would not impose tariffs or import restrictions on Canadian goods or services under Section 232 for at least 60 days after imposing the measure to allow time for the two Parties to negotiate an appropriate outcome. The side letters also acknowledged Canada’s discretion to “take a measure of equivalent commercial effect in response” to any such US measures.

The US and Mexico agreed to similar terms in a side letter, as well as agreed to tariff rate quotas for passenger vehicles, light trucks, and automobile parts from Mexico if the US imposed tariffs on these products under Section 232.

The side letters, while outside the text of the USMCA, could be revisited during the review or the Parties could look to negotiate other commitments outside the text of the USMCA that address tariff concerns.

How can organizations influence the outcome of the review?

The USMCA review, informed by both the agreement and the Implementation Act, offers an opportunity for the US, Mexico and Canada to evaluate implementation progress, address emerging challenges and reaffirm their commitment to maintain the competitiveness of the North American trading bloc.

Importantly, it also affords stakeholders the opportunity to engage with the administration and Congress on key priorities to improve or preserve the operational effectiveness of the USMCA. This requires organizations to effectively prepare for and engage in USTR’s public process, as well as proactively engage with Congress and the administration during all stages of the review.

Successfully advancing your firm’s priorities throughout the review process will require a deep understanding of your North American supply chain and USMCA’s impact on your operating model, as well as an advocacy strategy that accounts for the complex policy and political dynamics that will shape the ultimate outcomes. Companies that are not prepared may find themselves at a competitive disadvantage as peers work with the administration and Congress to ensure that their priorities are addressed.