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USMCA renewal uncertainty clouds North American industrial real estate planning
The trade pact is set for a rolling annual review after missing a July 1 renewal deadline, adding uncertainty for industrial tenants, investors, and developers.
A major potential long term headwind for North American industrial real estate is building as the U.S. Mexico Canada Trade Agreement, or USMCA, is poised to miss its initial July 1 renewal deadline, according to Yardi Systems’ CommercialCafe via ConnectCRE.
ConnectCRE reports that missing the review date does not immediately end the agreement, but it moves the pact into a rolling annual review process, which CommercialCafe said adds a fresh layer of policy uncertainty already weighing on industrial tenants, investors, and developers for more than a year.
The outlet said USMCA governs about $2 trillion of trade per year, with Mexico and Canada together representing more than one quarter of U.S. trade activity, and it noted that cross border negotiations could extend for years.
Until a resolution is reached, CommercialCafe said sectors with deeply integrated cross border supply chains, including the automotive and advanced manufacturing industries, face the greatest exposure, and it cited Yardi Research director Peter Kolaczynski warning that prolonged negotiations and uncertainty can hinder potential growth later in the decade.