The USMCA, which was intended to provide long-term stability for North American trade rules, has shifted to annual reviews, raising concerns that Japanese companies’ supply chains and production systems could be affected.
The USMCA includes a “review clause” under which the three countries jointly review the agreement six years after it enters into force. The clause was triggered this year. Although the agreement will remain in force through 2036, the three countries will thereafter conduct review negotiations every year.
This change suggests to people at Japanese companies that the long-term stability of North American trade rules could deteriorate significantly. The Trump administration is said to have used the agreement since it entered into force as leverage in extracting concessions on its terms, potentially changing the significance of the agreement.
Compared with the impact of tariff policy, the USMCA review was highlighted as posing more than a cost issue, with the potential to force long-term production systems and supply chains to be restructured. Some observers also point out that awareness of the USMCA itself remains low in Japan.