USMCA extension under scrutiny as Mexico pushes to keep pact alive

Marcelo Ebrard

Mexico is working to secure a USMCA extension even as Trump questions the pact’s value and raises uncertainty. Mexican officials frame the USMCA extension as essential to protecting manufacturing supply chains that link Mexico, the US and Canada. For investors and manufacturers, the USMCA extension will determine how predictable North American trade rules remain over the next decade.

USMCA extension review will shape North American trade stability

Mexico’s economy minister says negotiators are progressing on the scheduled USMCA review, aiming to conclude the process by 1 July. This review could unlock a 16-year USMCA extension if all three governments agree. However, failure to secure that commitment would push the agreement into annual reviews, which would inject ongoing political risk into trade and investment planning.

The USMCA replaced NAFTA in 2020 and now underpins a large share of Mexico’s export-led growth. Trump’s recent comments that the pact offers “no real advantage” signal possible resistance to a smooth USMCA extension. As a result, companies in autos, energy and manufacturing must factor in scenarios where tariff policy changes more frequently, even if the core agreement nominally survives. Analysts also expect some tariffs on Mexican exports to remain in place whether or not a full 16-year USMCA extension is agreed.

Security tensions complicate the path to a USMCA extension

Security and migration tensions now overlap with the economic debate around the USMCA extension. The US has pressed Mexico to show faster progress on disrupting trafficking networks and fentanyl flows. After a call between the two foreign ministers, both sides reaffirmed the strategic importance of the partnership, yet Washington publicly called “incremental progress” on border security unacceptable.

Meanwhile, threats of possible US military action against criminal groups in Mexico have raised political sensitivity in Mexico City. President Sheinbaum has publicly ruled out any US military intervention after what she described as a “good conversation” with Trump. These tensions create a more fragile backdrop for the USMCA extension process, since domestic politics in both countries can quickly spill over into trade negotiations.

The Metalnomist Commentary

The USMCA extension is becoming a litmus test for how North America manages the intersection of trade, security and domestic politics. Even if the treaty survives in its current form, the drift toward more conditional and frequently reviewed trade rules will raise the cost of capital and encourage companies to diversify risk within the region. For metals and industrial supply chains, boardrooms should treat the USMCA extension not as a given, but as a scenario that must be actively hedged.