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The importance of the USMCA

An economist says the future of the United States Mexico Canada Agreement could depend on President Trump’s tariff actions.

“The US is violating the USMCA,” he says.

Jeffery Schott, with the Peterson Institute for International Economics, says trade disruptions could put a long-standing partnership at risk. 

“We have 60 years of trade integration in North America,” he says. “The introduction of broad based new restrictions can be much more disruptive than would have occurred when NAFTA first started in January of 1994.”

President Trump’s most recent announcement included a new 10% tariff on both Canada and Mexico. Schott says the review process could happen early to eliminate further trade tensions.

“There is a chance to revise the agreement and then reconfirm its extension for another 16 years,” he says. “But, that creates a great deal of uncertainty, for the 3 partner countries and certainly businesses operating in the North American market.”

The first USMCA review is currently set for July 2026.

Schott made his comments during the recent Peterson Institute for International Economics Outlook for North American Trade and Immigration webinar.