USMCA Talks Enter a Critical Phase. Here’s What Retailers Are Watching.

The first formal review of the United States-Mexico-Canada Agreement (USMCA) is moving from preparation to negotiation, and the stakes for retailers, consumers, and the broader North American economy are significant. 

U.S. and Mexican officials recently concluded an initial bilateral round tied to the USMCA Joint Review, with additional rounds expected as all three countries prepare for formal trilateral discussions. Canada has also called for the agreement to be renewed for another 16 years, underscoring the importance of a stable path forward. 

For retailers, the priority is clear: preserve the certainty USMCA provides while making targeted improvements that strengthen North American competitiveness. 

USMCA entered into force in 2020 after the United States, Mexico, and Canada renegotiated the North American Free Trade Agreement, or NAFTA. NAFTA had governed trade among the three countries since 1994, helping create deeply integrated North American supply chains over nearly three decades. USMCA updated that framework for a modern economy while preserving the core benefits of regional trade. 

That framework matters because retailers make sourcing, inventory, and investment decisions months—and often years—in advance. They rely on clear rules to determine where products can be sourced, how goods qualify under the agreement, and how they can keep shelves stocked with affordable, quality products. When trade rules are uncertain, that uncertainty can ripple through supply chains and ultimately affect consumers through higher costs, fewer choices, or reduced availability. 

That is why renewal of the agreement is so important. 

Under USMCA’s review mechanism, the three countries must evaluate how the pact is operating and decide whether to extend it for another 16 years. A successful review and extension would send a strong signal that North America remains committed to a stable, competitive trade framework at a time when businesses are already navigating a complex global environment. 

Retailers support efforts to strengthen North American competitiveness. The agreement can be improved through better customs cooperation, more consistent enforcement, stronger coordination against forced labor, robust labor and environmental standards, and greater regulatory compatibility across borders. 

But improvements should be made carefully. The goal should be to modernize USMCA without creating unintended friction for the supply chains that allow retailers to serve American families every day. 

One area retailers will be watching closely is rules of origin. Clear, predictable rules are essential to the agreement’s success. While there is broad interest in strengthening North American production and addressing the role of non-market inputs in regional supply chains, overly rigid changes could undermine the integration USMCA is designed to support. Some raw materials, components, and semi-finished goods are not feasibly produced in North America, and businesses need flexibility when those inputs are necessary. 

Retailers also believe USMCA-compliant goods should remain protected from unnecessary tariff uncertainty. The agreement is intended to provide preferential treatment for goods that meet its rules. Preserving that treatment is essential to maintaining confidence in the agreement and encouraging continued investment in North American supply chains, furthering the administration’s national security goals to strengthen coordination in the Western Hemisphere. 

As negotiations intensify, policymakers should keep the focus on practical outcomes: preserve what works, improve what can be improved, and avoid changes that create unintended harm for American workers, businesses, and families. 

A strong USMCA is not just a trade priority. It is a consumer priority, a competitiveness priority, and a foundation for North America’s economic future.