Market Perspectives: Beyond July 1

Understanding the Road Ahead for USMCA

On July 1, 2026, Canada, the U.S., and Mexico will decide on the first six-year review of USMCA. While the agreement could be extended to 2042, our base-case expectation is that the parties will defer renewal and enter annual reviews while negotiating revisions. Importantly, the existing agreement, including current tariff preferences and market access provisions, would remain in force until at least 2036.

The U.S. is expected to seek stricter rules of origin, greater use of U.S.-produced content, and measures to limit Chinese participation in North American supply chains. Canada's focus remains preserving tariff-free access to the U.S. market and maintaining supply-chain stability.

While renewed trade tensions may create periods of market volatility, the experience of 2025 suggests that Canadian equities can remain resilient. For long-term investors, maintaining a diversified portfolio and staying focused on fundamentals remains the most effective way to navigate policy uncertainty.