USMCA Trade Review Expected to be a Prolonged Process Through 2027

The upcoming six-year review of the USMCA trade agreement is expected to be a drawn-out process, potentially extending into 2027. Analysts suggest a quick resolution by the July 1 deadline is unlikely, leading to a period of trade uncertainty and difficult concessions. Key points of contention include energy policies, steel rules, and the growing influence of Chinese investments in electric vehicles and infrastructure. While Mexico is pursuing deeper integration with the U.S. economy, Canada is looking to diversify its trade partnerships to mitigate risks. Bipartisan pressure in Washington to curb Chinese influence in North American supply chains remains a significant hurdle for negotiators. This prolonged uncertainty is expected to act as a headwind for both the Canadian Dollar and the Mexican Peso against the U.S. Dollar.