CUSMA Under Review: What the 2026 Trade Agreement Talks Mean for Cross-Border Freight

The Canada-United States-Mexico Agreement — known in Canada as CUSMA and in the United States as USMCA — has always contained a built-in review mechanism. Article 34.7 of the agreement requires the three signatory countries to conduct a joint review of the agreement's operation no later than six years after its entry into force. That review is now formally underway, and the outcome will have significant implications for the cross-border freight market.

For logistics professionals, trade agreement reviews can feel like abstract political events with little direct relevance to the day-to-day work of moving freight. That perception is understandable but mistaken. The rules embedded in CUSMA — rules of origin requirements, customs procedures, sector-specific provisions, and dispute resolution mechanisms — directly shape the economics and logistics of cross-border trade. Changes to those rules, even incremental ones, can have material consequences for shippers, carriers, and freight brokers who operate in the Canada-US corridor.

Understanding what is at stake in the current review, and what the likely outcomes mean for your freight program, is increasingly important as the talks progress.

The CUSMA review process is not a renegotiation in the traditional sense. The agreement does not expire in 2026; rather, the review is an opportunity for the three countries to assess the agreement's performance, identify areas where it is not functioning as intended, and agree on modifications. If the review concludes without agreement on modifications, the agreement continues in force for another sixteen years before the next mandatory review.

The political context of the 2026 review is complex. The tariff disputes of 2025 — which we covered in detail in our June 2025 post — have strained the Canada-US trade relationship and created a backdrop of mutual suspicion that complicates the review process. Both Canada and the United States have entered the review with lists of concerns and priorities that do not always align.

Canada's primary concerns centre on the steel and aluminum tariff situation, the functioning of the agreement's dispute resolution mechanisms, and the treatment of Canadian agricultural exports in the US market. The United States has focused on rules of origin in the automotive sector, digital trade provisions, and what it characterises as unfair Canadian dairy market access restrictions. Mexico's priorities are somewhat different again, with a focus on energy sector provisions and labour chapter implementation.

The review is being conducted through a series of working group meetings and ministerial consultations, with a target of completing the substantive discussions by mid-2027. The freight implications will depend heavily on which issues are resolved and how.

For cross-border freight professionals, the most consequential aspect of the CUSMA review is the potential for changes to rules of origin requirements. Rules of origin determine whether a product qualifies for preferential tariff treatment under the agreement — and therefore whether it can cross the border duty-free or at a reduced rate.

The automotive sector rules of origin are the most closely watched. CUSMA significantly tightened the rules of origin for vehicles and automotive parts compared to the original NAFTA, requiring a higher percentage of North American content and introducing new requirements for steel and aluminum sourcing. These provisions were intended to encourage investment in North American manufacturing, but they have also created compliance complexity and, in some cases, increased production costs.

The United States has signalled that it wants to further tighten automotive rules of origin in the review, potentially increasing the required North American content threshold and adding new requirements for specific components. If these changes are adopted, they would have significant implications for the cross-border freight flows that support the deeply integrated North American automotive supply chain.

For freight brokers and shippers who move automotive parts and components across the Canada-US border, tighter rules of origin could mean more complex documentation requirements, more frequent customs examinations, and potentially higher duty costs for goods that no longer qualify for preferential treatment. It could also accelerate the reshoring of some automotive component production to North America, which would change the geography of freight flows over the medium term.

Outside the automotive sector, rules of origin changes are being discussed for textiles and apparel, agricultural products, and certain manufactured goods. The direction of these discussions is less clear than in the automotive sector, but shippers in these categories should be monitoring the review closely.

One of the areas where the CUSMA review could deliver meaningful benefits for the freight industry is in customs procedures and border efficiency. The current agreement includes provisions intended to streamline customs processing and reduce border dwell times, but the implementation of these provisions has been uneven, and the tariff disputes of 2025 created additional friction at the border that the agreement's procedural provisions were not designed to address.

Both Canada and the United States have expressed interest in using the review to strengthen the customs facilitation provisions of the agreement, including by expanding the use of trusted trader programs, improving information sharing between customs authorities, and reducing the administrative burden associated with rules of origin documentation.

For the freight industry, improvements in customs efficiency would be genuinely valuable. Border dwell times have increased significantly over the past two years, and the cost of those delays — in driver time, equipment utilisation, and customer service — is substantial. Even modest improvements in processing speed at major crossings like Windsor-Detroit, Sarnia-Port Huron, and the Peace Bridge would have meaningful economic benefits for cross-border shippers.

The challenge is that customs efficiency improvements require sustained investment and operational commitment from both governments, not just agreement text. The history of trade agreement implementation suggests that procedural commitments are often the first to be deprioritised when political attention moves elsewhere.

The CUSMA review is also expected to address digital trade provisions, including rules governing cross-border data flows, data localisation requirements, and the treatment of digital goods and services. While these provisions may seem distant from the physical movement of freight, they have direct implications for the logistics technology that underpins modern supply chains.

Freight visibility platforms, transportation management systems, customs filing software, and the data networks that connect shippers, carriers, and brokers all depend on the ability to move data freely across the Canada-US border. Restrictions on data flows — whether through data localisation requirements or other measures — could increase the cost and complexity of operating these systems in a cross-border environment.

The current CUSMA provisions on digital trade are generally considered to be among the most progressive in any trade agreement, but both Canada and the United States have domestic policy pressures that could push toward more restrictive approaches. The review will test whether the two countries can maintain their commitment to open digital trade in a more contested political environment.

The CUSMA review is a multi-year process, and the final outcomes will not be known for some time. But there are practical steps that cross-border shippers can take now to reduce their exposure to potential changes and position themselves to adapt quickly when the review concludes.

Audit your rules of origin compliance. If you are claiming preferential tariff treatment under CUSMA for goods you import or export, now is a good time to review your compliance documentation. Rules of origin requirements are complex, and the consequences of non-compliance — retroactive duty assessments, penalties, and loss of trusted trader status — can be significant. A compliance audit conducted before the review concludes is far less costly than one conducted in response to a customs examination.

Map your supply chain exposure. Understand which of your products and supply chains are most dependent on CUSMA preferential treatment, and model the cost implications of potential changes to rules of origin or tariff rates. This analysis will help you prioritise where to focus contingency planning and where the risk is manageable.

Engage with industry associations. The CUSMA review process includes mechanisms for industry input, and the freight and logistics industry has a direct stake in the outcome. Organisations like the Canadian Trucking Alliance, the Transportation Intermediaries Association, and the Canadian International Freight Forwarders Association are actively engaged in the review process. Participating in these industry voices is one of the most effective ways to ensure that freight industry concerns are heard.

Build flexibility into your supply chain. The uncertainty created by the review is itself a risk management consideration. Supply chains that are highly optimised for the current CUSMA framework — with minimal redundancy and no alternative sourcing options — are more exposed to disruption if the rules change. Building in some flexibility now, even at a modest cost, is a form of insurance against regulatory change.

Stay informed. The CUSMA review will generate significant news coverage as it progresses, but much of the most important detail will be in technical working group documents and regulatory announcements that do not make the front page. Working with logistics partners who track these developments closely is one of the most effective ways to stay ahead of changes that could affect your freight program.

The CUSMA review is taking place against a backdrop of broader shifts in the global trade environment. The era of uncritical trade liberalisation that characterised the 1990s and 2000s has given way to a more contested landscape in which trade agreements are increasingly seen as tools of industrial policy as much as vehicles for economic efficiency.

For the freight industry, this shift creates both risks and opportunities. The risks are the ones we have been discussing — potential changes to rules of origin, increased border friction, and the uncertainty that comes with any major policy review. The opportunities lie in the fact that a well-functioning CUSMA, with strong customs facilitation provisions and clear rules of origin, is genuinely good for cross-border freight. The industry has a strong interest in advocating for an outcome that supports efficient, predictable cross-border trade.

At Oaken Logistics, we will continue to monitor the CUSMA review closely and provide updates as the talks progress. Cross-border freight is at the core of what we do, and we are committed to helping our clients navigate whatever changes the review ultimately produces.