As we approach 2026, the impending renegotiation of the United States-Mexico-Canada Agreement (USMCA), coupled with the unpredictable political landscape in the US, presents a potential minefield for businesses involved in cross-border trade.

No matter which administration takes power after the 2024 electionsthe agreement is likely to be revised, affecting industries ranging from manufacturing to agriculture. Business owners who prepare now for potential changes will be much better positioned to weather the storm.

Whether it's changing “country of origin” rules or the threat of new tariffs, proactive planning is essential for business leaders looking to avoid being caught off guard.

Below are three factors that entrepreneurs should follow as global trade landscape shifts.

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1. Strengthening the sustainability of the supply chain

One of the key changes expected is an overhaul of the “country of origin” rules that determine whether goods qualify for tariff exemptions under the USMCA. Under the agreement, goods must have a significant percentage of their ingredients sourced from North America to avoid tariffs. However, foreign companies have been adept at finding loopholes. For example, Chinese firms channel products to countries such as Mexico AND Vietnam to fulfill the terms of the trade agreement.

For businesses that rely on imports, this means increased risk of tariffs on goods they once imported freely. The auto industry has already been hit with more demanding standards 75% of the parts of a vehicle be sourced from North America. Other industries such as electronics or clothing may soon follow suit. Entrepreneurs should evaluate their supply chains now and consider sourcing more components locally to avoid getting caught up in regulatory changes that could drive up costs.

Business owners should audit their supply chains for vulnerabilities and work with trade experts to ensure compliance with the evolving USMCA rules. This could also be an opportunity to explore new partnerships with North American producers to diversify resources and mitigate risks.

2. Prepare for tariffs as governments seek new revenue streams

With governments facing financial shortfalls due to global economic pressures such as the impact of the pandemic AND war in Ukrainethere is an increasing opportunity for fees to be used as a means of raising revenue. Both sides in the US have strong incentives to revise tariffs on industries such as steel, aluminum and even technology products.

For entrepreneurs, this can mean additional costs not only for raw materials, but also for the goods they export to other markets. Considering Canada and the US exchanged approx 1.5 billion dollars of goods per day in 2022, any rate changes could significantly disrupt operations. What may seem like a small increase in tariffs on one side of the supply chain can create ripple effects, increasing costs for manufacturers and distributors and ultimately affecting prices for customers.

Develop contingency plans that take into account possible increase in fees. Entrepreneurs should consider budgeting for cost increases and building flexibility into their supply chains by diversifying suppliers and renegotiating contracts to protect against sudden price changes.

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3. Work in production: A possible shift to the south

The US push to bring more manufacturing jobs could have significant implications for businesses in Canada and Mexico. Currently, many American firms choose to manufacture goods in Canada or Mexico because of favorable labor costs. However, changes in trade agreements or the imposition of tariffs on certain goods could reverse this trend, increasing costs for businesses that depend on cross-border supply chains.

This change presents challenges and opportunities. If manufacturing jobs move south to Mexico because of cheaper labor rates or return to the U.S. to take advantage of new incentives, Canadian manufacturers could face job losses and increased competition. On the other hand, businesses can find opportunities to fill gaps in domestic markets or expand into new regions if they can pivot quickly enough.

But before any major changes occur, there is a critical need for discussion within the industry to ensure the right infrastructure is in place. Without this, change could lead to significant challenges for both countries. We've seen it with the steel industry – when duties are imposed before local capacity can handle demand, it leads to delays, shortages and increased costs that ultimately hit consumers.

Entrepreneurs must remain agile and closely monitor political and economic developments. Exploring automation and investing in technology can help mitigate the higher costs associated with manufacturing closer to home.

While it is impossible to predict every change that comes with the USMCA 2026 renegotiation or how political changes will unfold, business owners who stay informed and prepare for a range of outcomes will be in the best position to thrive. The key is to stay ahead of regulatory changes, protect supply chains and explore opportunities that may arise as global trade realigns. By doing so, entrepreneurs can turn these challenges into opportunities for growth.