To move or not to move? Manufacturers hesitant to nearshore before USMCA review

As the United States solicits feedback on the U.S.-Mexico-Canada Agreement ahead of the deal’s review next year, manufacturers are mulling how they can minimize their exposure to tariffs.

Cross-border trade in North America has already gone through a series of changes, first with the scrapping of the North American Free Trade Agreement for USMCA in 2020, then with 25% tariffs placed on imports from Canada and Mexico earlier this year. A tariff exemption was granted for USMCA-compliant goods, although levies on non-qualifying imports from Canada now face a 35% duty.

Mexico and Canada are the U.S.’ largest trading partners, with the country importing $505.5 billion and $411.9 billion worth of goods from the countries in 2024, respectively. The tariff exemption has led many firms already manufacturing in and sourcing from the two nations to reevaluate their products to see what qualifies. Some have seen increased business or a competitive advantage due to their existing compliance with USMCA.

But the tariff situation has been too fluid to prompt major moves for manufacturers with global supply chains, according to trade consultants and attorneys. 

To move or not to move? Manufacturers hesitant to nearshore before USMCA review | Manufacturing Dive