Introduction
The USMCA agreement became more central to North American trade and manufacturing after recent shifts in policy.
Rising Compliance and Trade
By 2052, compliance with USMCA rules on Mexican and Canadian exports to the U.S. jumped close to 80% due to higher U.S. tariffs on non-USMCA goods.
Mexico’s Trading Role
Mexico solidified its position as the United States’ largest trading partner, with Canada second and China slipping to third in total trade value.
Manufacturing Expansion
Manufacturing drove much of Mexico’s trade growth with the U.S., driven by nearshoring and reinvestment in established operations.
Technology and Advanced Goods
Mexico surpassed China as the top source of advanced technology products like data servers and electronics for the U.S. market in 2025.
Global Value Chains
A growing share of Mexico’s exports reflects North American value added, illustrating deeper economic integration with U.S. and Canadian production chains.
Tariff Shifts and USMCA Use
U.S. tariff rates rose sharply in 2025, motivating firms to increase use of USMCA preferences to avoid steep duties.
Investment Trends
Foreign direct investment into the region grew modestly, with the U.S. remaining the biggest source of investment in Mexico.
Manufacturing Employment Challenges
Despite production growth, manufacturing employment in Mexico and the U.S. stayed below earlier years due to automation and cost pressures.
Outlook
Continued tariff shifts and nearshoring trends may further integrate North American manufacturing, particularly in high-skill, value-added industries.
Source:
Kelly, B., Cañas, J., & Torres, L. (2026, March 4). USMCA has strengthened economic integration in North America. Brookings Institution. https://www.brookings.edu/articles/usmca-has-strengthened-economic-integration-in-north-america/