The United States has blocked the 16-year renewal of the USMCA (US-Mexico-Canada Agreement), opting instead for annual rolling reviews. This is a significant structural shift — rather than operating under a long-horizon trade framework, North American trade relations will now be subject to recurring renegotiation cycles, introducing persistent uncertainty for businesses that rely on cross-border supply chains.

The USMCA underpins roughly $1.3 trillion in annual trilateral trade, covering autos, agriculture, energy, and manufacturing. Companies with heavily integrated North American supply chains — automakers like GM, Ford, and Stellantis, as well as agriculture exporters and industrial manufacturers — are most directly exposed to the repricing of this risk.

The shift to annual reviews creates a recurring 'renegotiation premium' that markets may struggle to price efficiently. Mexico and Canada-facing equities, cross-listed names, and MXN/CAD currency pairs are the most immediate transmission channels. The Mexican peso and Canadian dollar both face headwinds from elevated uncertainty.

The bull case for risk assets is that annual reviews are ultimately a political tool — actual tariff or market access changes may never materialize, and the threat alone is used as negotiating leverage without real economic disruption. The bear case is that recurring uncertainty alone is enough to delay capital investment decisions, suppress cross-border M&A, and reprice emerging-market-adjacent Mexico exposure downward.

Key items to watch: whether Mexico or Canada formally push back or invoke dispute resolution mechanisms, any early signals from the first annual review, and whether US manufacturers begin auditing their supply chain dependencies publicly in earnings calls.