A U.S. exit from the trade pact it is currently a part of with Mexico and Canada will not have a immediate ramification but threatens to “add a layer of uncertainty to cross-border manufacturing and logistics operations.”
So says the latest Yardi Matrix Industrial Report, which notes that the U.S.-Mexico-Canada Trade Agreement has underpinned “manufacturing and logistics networks, setting the rules for roughly $2 trillion of annual trade between those three nations and more than a quarter of U.S. trade activity.”
The USMCA was put into effect in 2020 and designed to replace the much-maligned North American Free Trade Agreement, which Donald Trump – when he was a candidate for the presidency in 2016 – characterized as “one of the worst” trade pacts that U.S. ever entered into.
Now the Trump administration has announced its intention to pull out of the USMCA, an action that the Yardi Matrix reports should be taken seriously as Mexico now accounts for 16% of all trade with the U.S., and Canada a smaller, but still substantial 12%.
The Trump Administration action has been a long time coming: “Trade policy uncertainty has weighed on the industrial sector for more than a year now, impacting the decision-making of tenants, investors, and developers,” asserts the report.
The eventual dismantling of the USMCA, along with the recent doubts about its status, is particularly problematic for “sectors with deeply integrated, cross-border supply chains, such as automotive and advanced manufacturing.”
That’s because components in these sectors may cross borders “multiple times during production, giving even minor policy changes the potential to cascade into significant disruptions,” says the Yardi Matrix report.
Unless a path for renewal of the pact or some other potential agreement appears any time soon, the report adds, “uncertainty may prove to be the biggest long-term headwind for the industrial sector.”
July 9, 2026
By Garry Boulard
Photo courtesy of Unsplash
