The big North American trade deal didn’t die on Wednesday. It got something stranger: a decade of annual checkups. U.S. Trade Representative Jamieson Greer confirmed the U.S. “did not agree to renew the USMCA in its current form.”
Wednesday was the deadline to extend the pact for a clean 16 years. Canada and Mexico were eager to sign.
Instead, the agreement stays in force — but now officials from all three countries will meet every year, for a decade, to renegotiate.
The stakes are enormous. The pact — called CUSMA in Canada and T-MEC in Mexico — underpins nearly $2 trillion in annual trade. U.S. exports to the two neighbors topped $670 billion last year, versus roughly $106 billion to China.
What does Washington want? Higher U.S. content in cars — not just North American content — plus limits on Chinese parts and changes to Canadian dairy and alcohol rules.
None of that got settled Wednesday. It all moves to the annual negotiating table instead.
Uncertainty is a tax
Here’s the part that matters for a portfolio. A tariff — a tax on goods crossing a border — is a cost you can price. You know the number, and you plan around it.
An open-ended annual review is a cost you can’t price. Nobody can plan around a number that changes every year.
The evidence is already in. Business investment in Canada has fallen for five straight quarters.
Mexico’s auto sector has shed 100,000 jobs since 2025. Not because of one specific duty — because companies can’t make long-term plans without knowing the rules.
Consider one piston. It can cross the U.S., Canadian and Mexican borders six times before final assembly. Multiply that trip by an unknown annual tariff, and the whole supply chain freezes in place.
And the markets? They shrugged. The Dow sat a hair below a record.
That’s the tell. The headline is loud, the market reaction is quiet, and the real effect arrives slowly — in capital-spending decisions, not in one day’s trading.
Own either-way businesses
We don’t trade retirement money around a trade headline. But we do choose which businesses carry the risk.
Our tilt goes toward companies whose cash flow doesn’t depend on frictionless borders: domestic utilities, healthcare, consumer staples, and dividend payers that sell straight to the U.S. consumer.
A power company doesn’t care whose piston crossed which border. Neither does a pharmacy, or a grocery store.
The exposed names are just as easy to list: autos, auto parts, and cross-border industrials. Those are exactly where we want a margin of safety — a smaller position than conviction alone would suggest — not a full weight.
The plan’s job
A retirement plan should be built so a trade headline is a talking point, not a margin call.
When Washington swaps certainty for an annual negotiation, the answer isn’t to guess next year’s outcome. Nobody can, including Washington.
The answer is to own businesses that get paid either way — on a 16-year clock or a one-year one. Then the yearly reviews become something pleasant: someone else’s problem.