Mexico Maintains There Are No Signs of USMCA Breakdown; Consultations Progress Ahead of 2026 Review
The Secretary of Economy, Marcelo Ebrard, stated that there are no indications that the USMCA is at risk of derailing, despite recent remarks by Donald Trump about letting the pact expire or negotiating a new one. According to Ebrard, the review process is moving forward as scheduled, with public hearings ongoing in Washington as part of the technical preparations prior to the formal evaluation of the agreement set for 2026.
Ebrard explained that in January, he will present President Claudia Sheinbaum with a comprehensive report summarizing the consultations held in Mexico with business chambers, unions, academia, and local governments. Input from the Senate is still pending to complete the document. Based on preliminary findings, a broad majority of feedback supports maintaining the agreement, though opinions vary by sector: agriculture calls for more balanced conditions given U.S. subsidies, the trade sector pushes for greater openness, and the manufacturing industry wants to preserve defense mechanisms against unfair practices.
Beyond the political noise, the structure of the USMCA stipulates that in 2026 the parties will decide whether to "reaffirm" the agreement, extending it another 16 years. If any party chooses not to do so, the treaty does not end immediately; instead, annual reviews would be triggered until year 16, when the agreement could come to a close if no consensus is reached. This setup aims to provide medium-term certainty for supply chains, though any statements foreshadowing non-reaffirmation increase uncertainty for long-term investment planning and contracts.
The trade environment currently favors Mexico: over 80% of its exports are destined for the United States, and the country has benefited from the relocation of manufacturing to North America. Sectors such as automotive, auto parts, machinery, appliances, and medical devices remain dynamic, supported by geographic proximity, competitive costs, and rules of origin that incentivize regional content. However, bottlenecks in infrastructure, energy, and permitting still limit the ability to absorb large-scale new projects.
Ebrard stressed that, in terms of effective tariffs, Mexico maintains a comparatively favorable position in the U.S. market versus other non-regional partners, which strengthens its appeal over Asia and Europe. Still, some sensitive issues remain: disputes over tomatoes and seasonal products, instances of safeguards on steel or chemicals, and the use of the Rapid Response Labor Mechanism in dozens of workplaces. In the energy sector, bilateral consultations continue without a formal panel, but the issue remains on the radar due to its impact on industrial costs and decarbonization goals.
Diplomatically, technical dialogue with Washington remains vigorous, with frequent meetings to identify areas of convergence and prevent disputes. Private sector sources indicate that, looking toward 2025, priorities include streamlining customs and border crossings, harmonizing standards for e-mobility and semiconductors, and strengthening fast-track dispute resolution mechanisms for small and medium-sized exporters.
Looking ahead to 2026, scenarios range from a “clean” reaffirmation of the treaty to limited adjustments in annexes or side letters on specific issues. The evolution of the political agenda in the United States and Canada, as well as Mexico's ability to address concerns around labor, environment, and competition, will be crucial factors. For companies, the recommendation is to maintain hedging strategies and diversify within the North American bloc, keeping in mind investment timelines and the review process schedule.
In summary, the official message signals continuity and steady technical work, even as the political environment generates noise. The key will be turning business consensus into concrete proposals, addressing domestic bottlenecks, and sustaining trilateral coordination. If those conditions are met, the USMCA will remain the anchor for Mexican manufacturing and regional integration in the coming years.
