Under USMCA Uncertainty, North American Supply Chain Faces Restructuring: Bilateral Shift and the Long-Term Dilemma of Agricultural Trade

From Trilateral to Bilateral: Supply Chain Uncertainty in the USMCA Review

On July 1, 2026, the United States-Mexico-Canada Agreement (USMCA) officially enters its six-year review period. According to the agreement's rules, if the three countries do not decide to extend it, the agreement will enter an annual review process and may expire in 2036. However, early signals from the U.S. government indicate that the White House prefers to resolve trade frictions through bilateral negotiations rather than a full renewal of the USMCA. U.S. officials have already planned separate virtual talks with Mexico and Canada, but agricultural and manufacturing stakeholders worry that this segmented approach will break the model of North American supply chain integration that has persisted for over thirty years.

The Certainty Crisis in Agricultural Commodity Flows

Agriculture is one of the most dependent sectors within the USMCA system. According to data from the agricultural alliance, Canada and Mexico together account for nearly one-third of U.S. agricultural exports, valued at approximately $60 billion. Mexico is the largest buyer of U.S. corn and the top export destination for U.S. pork, while Canada is the largest market for U.S. ethanol and the fourth-largest market for U.S. pork. Keith Currie, president of the Canadian Federation of Agriculture, pointed out that the agreement has been beneficial for all three countries over the past thirty years, and "any disruption will affect parties on all borders."

The impact of trade policy uncertainty is particularly pronounced in agriculture. Samantha Ayoub of the International Fresh Produce Association stated that agriculture itself faces inherent risks such as weather and yields, and trade is one of the few areas that can provide certainty. However, as the U.S. government may no longer renew the USMCA and instead rely on executive trade tools, this certainty is disappearing.

Executive Trade Tools: A "Shadow Substitute" for Multilateral Rules

The Office of the U.S. Trade Representative is increasingly using unilateral tools to manage trade frictions. Darcy Witt, a former U.S. agricultural trade negotiator, noted that over the past 18 months, the government has more broadly applied Section 232 national security tariffs, Section 301 investigations, and anti-dumping and countervailing duty cases. While these tools target specific issues, the signal is clear: the U.S. commitment to multilateral agreements is weakening.

Michael Harvey, executive director of the Canadian Agri-Food Trade Alliance, believes the current situation differs from the renegotiation in 2018—there is no single large negotiating table. Statements from U.S. Trade Representative Greer indicate that the agendas for handling issues with Mexico and Canada are separate, and "there are no signs of a renegotiation." This means trade disputes will be resolved one by one, rather than through a comprehensive agreement.

De-Integration of North American Supply Chains and a Shift Toward Regionalization

The uncertainty surrounding the USMCA is forcing companies to reassess their North American production layouts. Cross-border supply chains in the automotive, agricultural, and energy sectors are highly integrated. If the agreement enters a ten-year countdown, investment decisions will tend to be conservative. On one hand, companies may increase local sourcing within each North American country to mitigate risks; on the other hand, regional supply chains may shift toward more flexible bilateral networks.Mexico has adopted a cooperative stance, while tensions between Canada and the United States persist. Canadian farmers are urging the government to accelerate dialogue with the U.S. while also exploring diversified markets. But as Sylvain Charlebois, an agricultural economist at Dalhousie University, noted, “Diversification cannot be an excuse to underestimate the importance of our largest customer.” Trade experts point out that any supply chain adjustments will take years and come at a high cost.

Long-term Trend: Fragmentation Mapping of the Global Trade System

The evolution of North American trade agreements is a microcosm of the global free trade system entering a phase of fragmentation. Multilateral negotiations under the WTO framework have stalled, regional trade agreements face political pressure, and bilateral and administrative measures are increasingly dominant. The fate of the USMCA will affect the stability of other regional trade blocs—such as the RCEP and the African Continental Free Trade Area. When the largest economy turns to bilateralism, the “regionalization” of global supply chains may no longer be a simple geographical concentration, but a politically driven disconnection and restructuring.

Conclusion: Supply Chain Resilience in an Era of Scarcity of Certainty

Agriculture and manufacturing need predictability in trade rules. During the USMCA review process, the U.S. simultaneously signaled bilateral negotiations and administrative tariffs, making supply chain planning full of uncertainties. Whether the agreement is renewed or not, companies must incorporate “uncertainty” as a long-term parameter into supply chain design. The North American integration model is shifting from “trilateral cooperation” to “bilateral control,” which is both the reality of geopolitical trade and another example of the deep ebb of globalization.