USMCA negotiations
Building the automotive supply chain of 2026: USMCA uncertainty and global trade unpredictability set to impact supply chains
With the US-Canada-Mexico Agreement (USMCA) up for review in 2026, negotiations will undoubtedly impact North American trade and the automotive supply chain sector must remain flexible and agile to navigate trade uncertainty.
As the Automotive Logistics team assessed the most significant areas of risk for the automotive sector in the coming year during the recent 'Building the automotive supply chain of 2026' livestream, chief content officer Christopher Ludwig and deputy editor Megan Kelly highlighted the upcoming USMCA negotiations between the US, Canada and Mexico as something firms with operations in North America will need to keep an eye on in 2026.
"More than policy itself, what the industry needs right now is certainty – that is the magic word," said Lizette Gracida, senior director of external affairs and trade compliance at Toyota México, at the Automotive Logistics & Supply Chain Mexico conference in 2025. "We need clear rules, no sudden changes that disrupt our industry."
"The industry is facing a great deal of uncertainty... in terms of the USMCA on how the renegotiations will unfold, and also how long this review will take for the parties to reach an agreement," Gracida added.
Speaking on the Red Sofa at the event, she noted: "Within Mexico, we are exposed to sudden regulatory changes that range from regulatory matters to constitutional reforms, and of course these types of changes impact the auto industry as a whole."
On stage, she emphasised that OEMs' greatest request to the governments of all three nations going into the USMCA negotiations is to "provide regulatory predictability" by setting out "workable rules and realistic guidelines" to allow OEMs to operate under true legal certainty.
Just months on from the conference in Mexico, the tariff landscape and trade relations in North America have not got any less complicated, with US president Trump threatening new tariffs on Canada after a Canada-China trade deal was announced, and Mexico imposing up to 50% tariffs on all nations with which it does not have a Free Trade Agreement (FTA).
"There's so much we don't know... there's a lot of things at stake here," commented Ludwig, reflecting on major events already witnessed in the Americas this year such as the US' military action in Venezuela. "If you're a logistics manager or even a chief supply chain officer, unfortunately you have a limited ability to influence what ultimately gets agreed in this deal.
He reinforced a point made by Gracida in Mexico City last year, that not knowing what the US might ask of Mexico in terms of constitutional reforms – whether that be issues around drug cartels or rule of law – throws up a lot of uncertainty heading into the negotiations, as does the tense relationship between the governments of Canada and the US.
"To a certain extent, the supply chain just needs to keep going and move on," Ludwig said. "Perhaps it was surprising in 2025 the extent to which, despite the tariffs... the supply chain ultimately carried forward. The OEMs made the decision to ship, to continue producing where it made sense – they didn't want to lose market share, because if you hold it back too long, someone else steps in and you lose market share."
He noted that even with all the uncertainty in the industry – be it from tariffs or the USMCA review –firms need to serve that supply chain as best as they can, but be very cognisant of the changes that are coming. Adopting a "performing while transforming" mantra will be key as supply chains move towards increased agility while continuing to serve the market.
Sharing a final piece of advice to the industry, Ludwig said: "I would say you need to be closely tracking where things are going so that you can be ready to serve multiple sides of the border – you have to be ready to move with your customers – and likewise look at other opportunities... where one opportunity drops, another may arise."
There's no one strategy to solve the issue of uncertainty, instead firms will need to employ a range of strategies to give themselves the best possible chance of prospering through these uncertain times, including: staying flexible; managing compliance; understanding your supply chain; working closely with suppliers; and adopting the right technology to help with complex documentation and tracking.
Watch the full livestream on demand here and make sure to register now for Automotive Logistics' next livestream all about digitalisation, taking place online on March 5, 2026.
