Communities along the border are warning of dire consequences as the future of North America’s most valuable trade agreement hangs in the balance. Political tensions threaten to bring the USMCA agreement to a standstill. The future has never been more precarious for the economies that have been built entirely on perfectly seamless flows of goods across borders.
Trade analysts forecast serious disruption for border economies
According to Jorge Torres, President of Interlink Trade Services, withdrawal from USMCA will start the negative effects on the Rio Grande Valley and Mexico. Even though daily business may not be affected in the beginning, the reduction in border crossings for commercial activities would cause harm to manufacturers, logistics providers, customs brokers, and transportation companies in the region. Torres states that it has been tough for companies in 2025, but finally, they are adjusting to deal with compliance planning.
The financial consequences have implications that go beyond mere operational changes. Torres explains that withdrawal means the abandonment of duty rates in accordance with Most Favored Nation conditions, with average tariffs amounting to 2%, accompanied by secondary tariffs that exacerbate the situation. The Section 232 tariffs on auto parts may amount to 25%, while the IEEPA Fentanyl tariffs may increase to 30% levels.
Concerns over the environment add to trade uncertainties at border crossings
Mexican industry groups have made official objections under USMCA rules with respect to the proposed closure of the flow of commercial trucks at El Paso’s Bridge of the Americas. The National Association of Mexican Importers and Exporters contends that the United States has not assessed the environmental effects that Mexican communities near alternative crossing points, specifically the Ysleta-Zaragoza area, would face with regard to air pollution.
Industries affected by the loss of USMCA, according to Torres, include the automotive, electronics, produce, metallurgical, and heavy equipment sectors. These industries will have to adapt their entire structure related to preferential treatment due to the new rules of origin resulting from the potential loss of USMCA. The automotive sector is especially vulnerable to these risks due to its dependence on a closed supply chain in North America.
Another issue that adds to the uncertainties for investment decisions in the region is the joint review scheduled for 2026. Most analysts are, however, optimistic that USMCA will remain in place, but Torres agrees that withdrawal could be used as leverage in negotiations. If the United States withdraws from the agreement, foreign direct investment would be severely affected in both Mexico and the United States.
Critical impact areas:
- Regional manufacturers and IMMEX firms
- Logistics and transportation companies
- Customs brokers and compliance specialists
- Cross-border supply chain operations
Border towns rally to safeguard important trading links
The possibility of splitting the USMCA into bilateral agreements will result in new challenges for companies with integrated supply chains. Torres explained that developing a completely new framework for the analysis of preferential treatment will consume much time and resources for companies. The cost associated with managing various trade agreements will be too expensive for small border businesses.
State and federal governments must begin to develop aggressive strategies in order to mitigate adverse economic consequences if the reality of USMCA withdrawal becomes a possibility. Torres urges that financial and fiscal incentives be put in place to ease the transition for businesses, while at the same time stating that regional cooperation is resolutely in favor of agreement continuity.
The regions along the borders have invested decades in establishing economic ties that rely on stable rules of trade and the easy flow of goods. This uncertainty over the future of USMCA has the prospect of disrupting these structures that have flourished as a result of trade across the borders, and will cost businesses the expense of planning for the uncertain future.
