North America’s Trade Pact Faces Its Biggest Test in Decades

For more than 30 years, the economies of the United States, Mexico, and Canada have been tied together through a shared trade system designed to move goods, investment, and manufacturing more easily across North America.

That system began with the North American Free Trade Agreement (NAFTA) in 1994. The deal greatly expanded regional trade, but it also became politically controversial in parts of the United States, where critics blamed it for factory closures, manufacturing decline, and pressure on wages.

During his first presidency, Donald Trump capitalized on that backlash and pushed to replace NAFTA with the United States-Mexico-Canada Agreement (USMCA), which entered into force in 2020. The updated agreement kept the regional trade system intact, but introduced stricter conditions. It increased North American manufacturing requirements for automobiles, added stronger labor provisions, modernized digital trade rules, and included a mandatory six-year review