President Trump has declined to renew the USMCA trade agreement, putting integrated North American supply chains at risk. The pact succeeded NAFTA and provided businesses certainty for cross-border investments spanning decades. Companies like Linamar have built manufacturing processes that move parts across multiple borders multiple times before final assembly.

Economist Paul Krugman argues that manufacturing job losses aren't primarily due to these trade agreements. He points out that North American auto production relies on tight integration across Mexico, Canada, and the United States, creating economies of scale that keep vehicles affordable and competitive globally.

The US trade deficit with Mexico reached $200 billion in 2025, with Canada at $46 billion. However, Mexico and Canada also represent the top export destinations for American goods, creating mutual dependency that Trump's tariffs could disrupt.

Companies have structured operations around seamless border crossings. Linamar's CEO described parts that travel from Mexico to the US for processing, then to Canada for further work, back to the US again, and finally to Canadian facilities for assembly before distribution. This integration cannot be easily reversed without significant cost increases and reduced competitiveness against Asian imports.