US Mexico Canada Agreement The Enduring Power of Three

The USMCA faces a critical renewal review in 2026 after facilitating $1.9 trillion in trilateral trade and significant regional investment. While a renewal is likely, it will likely involve concessions regarding rules of origin, digital trade, and Chinese re-exports.

Key Takeaways

• 1.Trilateral trade between the U.S., Mexico, and Canada reached $1.9 trillion in 2024, a $400 billion increase since the USMCA's inception in 2020.
• 2.Canada has become the third-largest foreign direct investor in the U.S., with investments growing 50% to $732.9 billion by 2024.
• 3.Mexico has improved its trade position relative to Canada, gaining U.S. import market share primarily at China's expense.

Table of Contents

• Summary and Key Takeaways
• USMCA – A (Bumpy) Renewal is Likely
• Economic Backdrop
• Potential Outcomes
• Changing Trade Dynamics
• U.S. companies are simultaneously near-shoring and on-shoring
• The effect of USMCA on other sectors

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