If you’re a small business owner in the U.S. who ships products to, from, or through Canada or Mexico, the United States-Mexico-Canada Agreement (USMCA) has a big effect on your bottom line. Here’s what SMEs (small and medium-sized enterprises) need to know about the USMCA, including the changes that could come with the July 2026 review.
What is the United States-Mexica-Canada Agreement (USMCA)?
The USMCA is a free trade agreement between the United States, Mexico, and Canada. It replaced NAFTA (the North American Free Trade Agreement) in 2020 and now governs how goods, services, and data move across the three countries’ borders.
The USMCA also includes enforceable labor provisions designed to improve conditions and protect rights and wages for workers.
USMCA vs. NAFTA
What is the difference between USMCA and NAFTA? USMCA kept much of NAFTA’s basic framework, but it also made meaningful changes: new automotive content rules, stronger labor standards, digital trade provisions, updated intellectual property rules, and, importantly for SMEs, easier customs and shipping.
A Big Deal for Small Businesses
Unlike NAFTA, the USMCA includes a standalone chapter dedicated to SMEs. It’s the first time any U.S. trade agreement has done this, but it makes sense: Canada and Mexico are the two largest export markets for American SMEs. Key SME-friendly provisions include:
Simplified customs and certification of origin. Rather than requiring a specific government-issued origin form, USMCA allows exporters — including the shipper, producer, or importer — to self-certify origin using any format that contains a defined set of data elements, which cuts down on paperwork.
Simplified customs and certification of origin. USMCA no longer requires a specific government-issued origin form. Instead, exporters (the shipper, producer, or importer) can self-certify origin in any format that includes a defined set of data elements, which cuts down on paperwork.
Digital trade protections. USMCA bans customs duties on electronically transmitted products and adds stronger rules around data flows, which benefits SMEs in software, media, and digital services.
Expedited release for express shipments. The agreement encourages customs authorities to release express and small-package shipments quickly, which is especially valuable for SMEs that rely on speed to compete with larger players.
This SME chapter was designed to lower the paperwork burden and cost barrier that have long made cross-border shipping harder for smaller companies.
Let’s Talk About Tariffs
With all the dialogue about tariffs recently, it’s easy for the idea of “free trade” to get lost in the chatter.
So does USMCA allow tariffs? Technically no, as long as the goods qualify. Non-qualifying goods still face tariffs, and in some cases very high ones. Following recent renegotiations, the current administration has imposed an additional 50% tariff on a wide range of Canadian imports. And that brings us to what’s going on with the USMCA right now.
The July 2026 Joint Review
This is where the picture gets more complicated.
Unlike NAFTA, the USMCA includes a sunset clause. Under Article 34.7, the U.S., Mexico, and Canada must conduct a formal “joint review” on the sixth anniversary of the agreement taking effect. That anniversary fell on July 1, 2026.
At that review, all three countries had to decide whether to extend the agreement, and while Mexico and Canada agreed to another 16-year term, the United States declined to renew the USMCA in its current form.
Is the USMCA still in effect? Yes. The USMCA remains fully in force. Its current rights and obligations, including preferential tariffs, rules of origin, investment protections, and dispute settlement mechanisms, continue to apply exactly as before.
What’s next? Because the U.S. did not confirm an extension, the agreement now enters a cycle of mandatory annual joint reviews. These will continue until the parties agree to extend it or it reaches its scheduled expiration in 2036.
What are USMCA compliant goods? You can find more information about USMCA compliance at the International Trade Administration and the U.S. Customs & Border Protection. However, during these ongoing negotiations, it’s especially important to stay up to date on which products qualify so you don’t get hit with unexpected penalty tariffs.
What This Means for Your Shipping Strategy
Nothing changed overnight for your shipments. Duty-free treatment, rules of origin, and customs procedures under USMCA are all still active. But with the agreement now in flux, the review is likely to become a serious negotiation rather than a routine check. SMEs moving goods across the U.S.-Mexico-Canada corridor should prepare without overreacting.
1. Confirm your rules-of-origin documentation is current and accurate. If your goods currently qualify for USMCA preferential treatment, make sure your certification of origin and supporting records are audit-ready. Negotiations may bring closer scrutiny to origin claims.
2. Watch for changes to auto, steel, aluminum, and agricultural provisions. Negotiators have flagged these sectors as focal points of the ongoing review, and they’re the categories most likely to see near-term adjustments.
3. Build flexibility into your supply chain. With the review process expected to stretch over months (or even years), businesses that diversify suppliers or maintain contingency sourcing plans will be better positioned to absorb any changes.
4. Keep an eye on de minimis and low-value shipment rules. While the the de minimis exemption was removed in 2025, these areas can change frequently, and any adjustments can directly affect how you price and route smaller shipments.
5. Lean on your logistics partner for updates. Trade rules tied to an active negotiation can shift with little notice. Staying close to customs and compliance guidance will help you avoid disruptions at the border. When you ship with DHL, our team is here to help you get ahead of any changes that could affect your business.
The Bottom Line
The USMCA replaced NAFTA in 2020 with an agreement built specifically to make cross-border trade easier for businesses of every size — and its SME-focused provisions, from simplified origin certification to higher de minimis thresholds, remain a genuine advantage for smaller shippers today.
The July 2026 joint review didn’t end that framework. Instead, it opened a new chapter of negotiation that will likely play out over the coming months and years. For now, the rules you know still apply, and staying informed will be your best tool for navigating whatever comes next.
DHL will continue to monitor developments in the USMCA review process and share updates as they affect cross-border shipping for our customers.
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