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Investors are understandably tired of hearing about tariffs. But the United States is approaching a deadline that, despite not getting much coverage, could have a significant impact on stocks in the second half of the year.
The United States-Mexico-Canada Agreement (USMCA) replaced the North American Free Trade Agreement (NAFTA) in 2020. The agreement introduced updated provisions around rules of origin, labor rights, digital trade, and agricultural market access.
But unlike many other trade deals, negotiators added a sunset clause to the USMCA. That means it’s subject to review every six years, starting this year. This gives all parties an opportunity to relitigate terms.
The best-case scenario, which offers the most stability for markets, would have countries maintain the current terms of the agreement with minimal disruption. However, many analysts give this the lowest odds of happening.
It’s also likely that, rather than confirming the agreement through its 2036 expiration, the nations will enter into a cycle in which the agreement is revisited every year for the next 10 years.
The good news is that many sectors won’t be impacted. However, any changes to USMCA are likely to be felt acutely in the following sectors:
Automotive (highest risk), with the likelihood of more frequent origin audits across manufacturers and suppliers.
Electronics, particularly those with components of Chinese origin.
Energy, as companies face mounting pressure to align with policy directives.
Agriculture, which intersects with two disputes—one between the U.S. and Canada regarding dairy access and another with Mexico over implementation gaps.
With that in mind, here are three stocks that carry explicit risk in the upcoming USMCA negotiations.
Ford Motor Co. is the company with the highest exposure of the three names in this article. The automaker assembles vehicles in Mexico and runs a deep cross-border supply chain.
Under existing USMCA rules, vehicles imported from Mexico must have at least 75% of their value originating in North America to qualify for duty-free treatment. Any renegotiation that tightens the regional value content (RVC) threshold, the labor value content (LVC) rules, or introduces new restrictions on Chinese-origin components directly affects Ford’s cost structure.
Ford has already been stockpiling USMCA-compliant parts and scrambling to audit its supplier tiers. A USITC 2025 report found that the rules of origin (ROOs) slightly reduced profits and production for U.S. automakers, which is why automakers are expected to push for ROO refinements as they adapt to EV growth and tariff changes.
Ford’s more relevant near-term story may be the upside embedded in the tariff offset program. The April 2025 proclamation established an "import adjustment offset" equal to 3.75% of aggregate MSRP for all U.S.-assembled vehicles built through April 2026, stepping down to 2.5% for the May 2026–April 2027 window. Ford anticipates roughly $1 billion in tariff improvement year-over-year due to a full year’s worth of credit expansion.
The USMCA review is, therefore, less a pure downside risk for Ford and more a binary catalyst. The extension strengthens the offset program’s durability, which may not be priced into the stock; disruption calls its mechanics into question.
Another name to watch among automotive stocks is PACCAR Inc. About 90% of PACCAR’s U.S.-delivered trucks are manufactured in U.S. factories, but components come from Mexico, Canada, Asia, South America, and Europe. That means all are potentially subject to additional tariffs (PACCAR estimated roughly $75M in tariff costs in Q3 2025.
However, PACCAR’s domestic assembly footprint could be a competitive hedge against rivals. Two competitors, Daimler Truck and Traton, build in Mexico and can sidestep certain levies, giving them a per-unit cost edge over U.S.-assembled trucks. Bernstein estimated a roughly 3% cost premium for USMCA-compliant Mexico-built trucks vs. U.S.-assembled trucks. A renegotiation that tightens ROO and raises labor or content requirements for Mexico-assembled trucks would narrow that competitor advantage. PACCAR’s CEO has been actively working to boost sourcing of USMCA-certified parts to reduce long-term exposure.
Kraft Heinz is a consumer staples stock with exposure across two channels. It manufactures in Canada (and benefits from cross-border USMCA duty-free treatment). It also sources agricultural inputs from across the region.
Mexico and Canada remain two of the most important export markets for U.S. farm products such as corn, soybeans, meat, and dairy, and the United States Trade Representative (USTR) has expressed dissatisfaction with Canada’s implementation of dairy access provisions.
A renegotiation that produces Canadian retaliation on agriculture or that disrupts KHC’s Canadian manufacturing operations is the largest risk. Tariff-induced pressures have already caused a decline in Kraft Heinz’s profitability and stock price, with internal strategic tensions noted.
However, KHC’s partial natural hedge is that it manufactures in both the U.S. and Canada. That means it can lean on "Canadian-made" positioning in the event of consumer-level boycotts driven by trade friction.