Toyota's Georgetown, Kentucky plant has been building vehicles since 1988. BMW is investing 800 million euros in San Luis Potosí for EVs, with production starting in 2027.
As of July 1, the trade agreement governing both supply chains has a 12-month planning horizon.
Last Wednesday, the USMCA joint review opened, and the United States declined to renew the agreement in its current form. The agreement remains in force and is now subject to annual review until it's either renewed or expires in 2036.
The explainers all land on the same reassuring point: the rules didn't change overnight. True.
The numbers tell the rest:
- USMCA preference utilization jumped from 49.5% to 76.1% for Mexican goods and 35.5% to 78.7% for Canadian goods after the 2025 tariffs. Businesses certified in record numbers under rules that can now be reopened every year for a decade.
Uncertainty stopped being a phase. On July 1, it became the operating system.
The full analysis, with three interactive charts, is on The Bridge this morning.
Editor’s Note: The above commentary was penned by Daniel Covarrubias, director of Texas Center for Border Economic and Enterprise Development. It first appeared on the author's social media pages.
Editor's Note: To read the full analysis, go to Dr. Covarrubias’ Substack page, called The Bridge. The title of his piece is: "USMCA Is Now a Year-to-Year Lease." Covarrubias writes: “The July 1 review didn’t end the agreement. It did something with a longer price tag: it made uncertainty annual. The bill lands on whoever builds next."
