The United States-Mexico-Canada Agreement (USMCA) has established a new phase for the trade relationship between the United States, Mexico, and Canada. During the Northeast Trade Spotting session organized by the Northeast Chapter of the Foreign Trade & Logistics Committee, Managing Director and Co-Leader of Trade & Customs at Kroll, Nick Baker, presented a detailed analysis of U.S. tariff policy and its implications for business operations within the region.
The U.S. tariff environment has reached levels not seen since 1934. Current measures include tariffs on copper, steel, aluminum, and the automotive industry, with rates reaching up to 50% on raw materials and derivatives. These measures are grounded in the International Emergency Economic Powers Act (IEEPA), which is undergoing judicial review. The outcome of these legal proceedings may redefine the scope of presidential authority in trade matters, establishing new parameters that companies will need to integrate into their strategic planning.
In response to measures adopted by the U.S. administration, Mexico and Canada have implemented differentiated strategies. In Mexico’s case, while the possibility of applying tariffs of up to 25% on strategic sectors was announced, the Federal Government chose to prioritize diplomatic channels. Canada, meanwhile, responded immediately with 25% retaliatory tariffs on U.S. products. However, beginning in September, the Canadian Government decided to reduce most of these measures with the objective of facilitating continued bilateral dialogue. These measures, along with modifications to the de minimis threshold for cross-border operations, have generated new customs requirements that affect transit times for goods in the region.
Beyond the political context, these measures have direct implications for business operations. The new tariffs increase the cost of inputs such as metals and automotive components, while changes in customs procedures require additional processing times and greater compliance preparation. In this environment, companies are strengthening origin verification and tariff classification processes, diversifying suppliers, and adjusting budgets to incorporate commercial risk management considerations.
Tariffs implemented under legal frameworks such as the IEEPA introduce new variables in the commercial environment that call for greater adaptability in business planning. While ongoing adjustments to their duration and evolving legal procedures require careful consideration in financing and long-term commitments, they also encourage companies to enhance flexibility and strengthen compliance and logistics strategies. At the regional level, these measures present an opportunity to reconfigure supply chains in ways that reinforce resilience and competitiveness, helping to preserve the USMCA’s role as a platform for growth and innovation across key sectors such as metals, automotive, and agri-food.
While the current measures remain in place, at AMCHAM, we reaffirm our commitment to building bridges of constructive dialogue and contributing with our multisectoral expertise and concrete proposals that support decision-making to strengthen the competitiveness of our region. By working together, the United States, Mexico, and Canada can ensure that North America continues to be a global platform for competitiveness, innovation, and shared prosperity.
