The decision not to renew the USMCA as it currently stands introduces significant uncertainty and risk to North American trade relations. Many stakeholders, particularly in the dairy and cattle industries, fear that separate bilateral agreements may weaken the collective strength established under the USMCA.
The National Milk Producers Federation and U.S. Dairy Export Council have highlighted that over 40% of U.S. dairy exports by value go to Canada and Mexico, emphasizing the importance of a comprehensive multilateral agreement for stable trade.
Economic analysts warn that dismantling the unified trade framework could lead to increased tariffs, regulatory divergence, and higher prices for consumers, alongside potential job losses.
Moreover, the initiation of a decade-long countdown to the agreement's expiration in 2036 evokes concerns over prolonged trade uncertainty, potentially deterring investment and economic growth across the region.
The full impact of this policy shift remains unclear as negotiations with Canada and Mexico are yet to commence.