McCarter & English examines the business implications of the USMCA review, with insights from Zack Hadzismajlovic on tariffs, trade negotiations, and what companies should watch.
The US has recently launched its review of the United States-Mexico-Canada Agreement (USMCA) after announcing that it will not renew the agreement without changes. While the agreement remains in effect, the review marks the start of a potentially lengthy negotiation process that could reshape North American trade rules in the years ahead.
Zack Hadzismajlovic, head of McCarter & English’s Global Trade, CFIUS and Export Controls practice, spoke with Law360 and noted that China will remain a significant factor in the review process, cautioning that a failure to secure a long-term renewal could create opportunities for China to expand its economic influence in Mexico. He also said negotiations are likely to be prolonged and could be accompanied by additional Section 232 tariff threats as the Trump administration seeks to gain leverage in discussions with Canada and Mexico.
“My sense is that it’s going to be a long, drawn-out negotiation, likely followed through with threats by this administration to levy higher 232 tariffs against both Canada and Mexico to kind of drive them to the negotiating table,” he said.
While acknowledging that additional tariffs could be disruptive to North American trade, Zack noted that he understands why they may be used as a negotiating tool to advance US objectives.