The USMCA Review Is Ninety Days Away.

On July 1, the formal review of the United States-Mexico-Canada Agreement begins. The three signatories will decide whether to extend the agreement for another sixteen years, or trigger a ten-year sunset countdown that would unwind the most important trade framework in North America.

This is not a routine administrative exercise. It is the single most consequential trade policy event for Canadian businesses operating across the continent.

What does the tariff landscape look like today?

After the Supreme Court struck down the broad IEEPA tariff authority earlier this year, the current regime has settled into a more targeted, but still punishing, structure. Non-USMCA-compliant goods now face a 10% tariff under Section 122, set to expire on July 24. Steel and aluminum remain subject to 50% duties under Section 232, with no expiry in sight.

The gap between compliant and non-compliant has never been wider. Companies that meet USMCA rules of origin are paying dramatically less at the border. Companies that do not are absorbing costs that fundamentally alter their unit economics.

What is the compliance signal telling the market?

The most telling statistic of the past twelve months is this: USMCA compliance jumped from under 50% to almost 80% of total trade value in a single year. That is not a gradual trend. That is a stampede.

The message from the market is unambiguous. Companies that ignored rules of origin when tariffs were low have been forced to restructure their supply chains under pressure. The ones that moved early are now reaping the benefit of preferential access. The ones that waited are scrambling.

This pattern will only intensify as the review approaches, as we outlined in our 2026 nearshoring outlook. If the agreement is extended, compliant companies will enjoy sixteen more years of predictable, preferential market access across three countries and nearly five hundred million consumers. If the sunset clause is triggered, the window begins to close, and the scramble will become something closer to a crisis.

What should Canadian companies do before July?

We advise every Canadian SME with cross-border exposure to take three steps before the review begins.

First, audit your supply chain. Understand exactly where your inputs originate, where value is added, and whether your products meet the applicable rules of origin. Many companies assume compliance without having done the detailed work. Assumptions are expensive when tariffs are measured in tens of percentage points.

Second, map your tariff exposure. Model what your landed costs look like under the current regime, under an extended USMCA, and under a sunset scenario. If you cannot quantify the difference, you cannot make informed decisions about inventory, pricing, or market entry.

Third, talk to someone on the ground. Trade policy is not an abstraction. It is implemented by customs officers, interpreted by local counsel, and navigated by people who understand how the system actually works, not just how it reads on paper. If you do not have advisory support in your target market, now is the time to explore your options.

What is the cost of waiting?

Ninety days is not a long time. It is barely enough to complete a supply chain audit, let alone restructure one. Companies that begin this work today will enter the review period with clarity and options. Companies that wait will enter it with neither.

The USMCA review will determine the shape of North American trade for a generation. Whether the agreement is extended or the sunset begins, the companies that prepared will be the ones with leverage, and the ones that did not will be negotiating from a position they did not choose.

We work with Canadian and Mexican companies navigating exactly this kind of transition. If your cross-border strategy needs pressure-testing before July, we should talk.