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How Does the New USMCA Trade Agreement Affect Your Supply Chain?


The new trade agreement became effective on July 1, 2020. 

Here are a few of the key components:

  1. Automobiles must have 75% of their components manufactured in the U.S., Mexico or Canada to qualify for zero tariffs. 

  2. 40-45% of automobile parts must be made by workers who earn at least $16/hr by 2023, and Mexico agreed to pass new laws that give greater protection to workers. 

  3. U.S. farmers gain more access to the Canadian dairy market. 

  4. Intellectual property and digital trade provisions. 

  5. Sunset clause after 16 years with a review every 6 years.

With the renewed focus on reshoring, here’s a few things to consider. 

  • Have you figured out what will change and what you should do differently, if anything? 

  • If it doesn't impact you directly, will it impact a customer, supplier or transportation partner? 

  • What do you need to do to address any resulting opportunity or a risk for you? 

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