Arizona Companies Sound the Alarm Over the USMCA Review: The Impact Would Likely Be Felt First Along the U.S.–Mexico Border
Uncertainty around the USMCA heading into 2026 is already shaping investment and logistics plans, with Sonora and northern Mexico among the most exposed regions.
The upcoming USMCA review has become a concrete risk factor for companies across the U.S. Southwest—particularly in Arizona, where productive ties with Mexico underpin a meaningful share of trade, logistics, and employment linked to cross-border supply chains. A study by the Seidman Research Institute at Arizona State University found that 85.7% of surveyed businesses expect negative effects on the state if the agreement is not kept in place in 2026—adding pressure to an evaluation process that, while built into the treaty itself, is unfolding in a more volatile political environment.
Mexico’s importance in that equation is far from marginal: in 2024, 27.8% of Arizona’s exports went to Mexico, compared with 8.6% destined for Canada. In dollar terms, the state’s total exports reached $32.4 billion and, according to the report, grew 7.5% compared with 2019, the last full year under NAFTA. In terms of integration, the Arizona–Sonora border functions as a manufacturing, agribusiness, and distribution corridor where the cost of time—lines, inspections, congestion—turns into financial costs.
The report emphasizes that a rupture or weakening of the rules framework would have immediate effects: border delays, higher input costs, reduced logistics fluidity, and lost competitiveness for sectors that rely on integrated production processes—from advanced manufacturing to the aerospace and automotive industries. On top of that is the political uncertainty: reports in international media about an alleged intention by former President Donald Trump to pull the United States out of the agreement have once again rattled the business community. From Mexico, President Claudia Sheinbaum has said there is no formal notice and that the treaty remains in force.
For Mexico, this issue is not distant: the USMCA has become the institutional anchor of the export boom and the reshoring of investment toward North America, at a time when “nearshoring” is competing with infrastructure constraints, energy availability, and security concerns. Even with those limitations, export manufacturing—especially automotive, electronics, medical devices, and aerospace—depends on regulatory certainty to plan inventories, routes, and long-term purchasing.
If intraregional trade were to lose the umbrella of common tariff protections and shared rules, the adjustment would not be automatic. Arizona businesses surveyed estimate that relocating suppliers within the United States would take three to five years and require substantial investment, with costs that could be gradually passed on to final prices. For Mexico, the takeaway is twofold: a scenario of trade frictions would hit border states and the industrial Bajío first, but it could also open the door to supply chains shifting toward other countries if the region loses predictability.
The Border as an Economic Thermometer: Logistics, Costs, and Competitiveness
In the real economy, integration shows up in border crossings, warehouses, freight yards, and production lines running on lean inventories. Any change that increases inspections, revisits rules of origin, or raises the risk of tariffs can make working capital more expensive: more days of inventory means more financing, higher storage costs, and greater pressure on margins. In the Sonora–Arizona corridor—where maquiladoras, agricultural exports, and transportation coexist—competitiveness depends as much on trade policy as it does on customs infrastructure and binational coordination. For Mexico, this ties directly to domestic challenges: modernizing ports of entry, digitizing procedures, ensuring transportation capacity, and providing certainty for industrial investment—especially in regions seeking to capture projects tied to nearshoring.
In Arizona, business concern is also amplified by the state’s role as a logistics hub for the Southwest. The study warns of risks such as the loss of distribution centers, reduced activity at ports of entry, and a weakening of the region’s strategic positioning if trade with Mexico becomes more expensive. At the same time, business associations have pushed to preserve the agreement: more than two dozen local organizations joined a national coalition of more than 500 groups calling for USMCA continuity, arguing that millions of U.S. jobs depend on trade with Mexico and Canada.
On Mexico’s side, the debate is happening amid a global slowdown and shifting monetary conditions: still-elevated rates keep borrowing costs restrictive, while consumption and investment weigh signals of confidence. The stability of the trade framework with the United States—Mexico’s main export destination—tends to show up in investment decisions involving plants, industrial parks, and supplier networks, as well as in FX expectations and hedging costs for companies with dollar-denominated flows.
Beyond the political moment, the underlying question is whether North America will maintain a rules-based bloc with predictable standards to compete with Asia and Europe. For Mexico, USMCA continuity will not, by itself, resolve internal bottlenecks, but it does reduce a larger risk: that investment delays decisions due to the possibility of tariff frictions, shifting rules, or prolonged disputes. In that sense, the 2026 review will be a test of political coordination and technical capacity to resolve controversies without undermining the incentives for productive integration.
All told, the message coming out of Arizona is clear: uncertainty over the USMCA is already carrying a cost in expectations and planning. For Mexico, the priority will be to sustain trade certainty while addressing the internal challenges that will determine whether the country can durably capitalize on the region’s supply-chain reconfiguration.
