USMCA Review, Mid-September 2026: Two Tracks, One Stalled, and What 'Interim Arrangements' Would Mean for Your Duty Bill

USMCA Review, Mid-September 2026: Two Tracks, One Stalled, and What "Interim Arrangements" Would Mean for Your Duty Bill

On July 1, 2026 the United States declined to confirm a 16-year extension of the USMCA at the first joint review, which under Article 34.7 pushes the agreement into a cycle of annual reviews that can run through 2036. We covered what that decision did and did not change in our July analysis. Ten weeks later the picture has moved a great deal — on one track forward, on the other badly backward — and the practical question for importers has shifted from "is USMCA still in force?" (it is) to "what should my North American inventory be doing while two governments negotiate on different calendars?"

This article is a mid-September status check written for the people who file entries, not for the people who negotiate treaties. It covers what is actually in force today, where each bilateral track stands, what an "interim arrangement" would and would not do to your landed cost, and why the bonded-warehouse rate-on-withdrawal rule has become the cleanest hedge available on both tracks.

What is in force today

Before scenarios, the ground truth as of September 15, 2026:

- USMCA remains fully in force for all three countries. Preferential origin claims on a valid certification still eliminate the general (Column 1) duty on qualifying goods from Canada and Mexico. An estimated 81 to 85 percent of Canadian imports and roughly 85 percent of Mexican imports continue to enter the United States duty-free under USMCA preferences. - Section 338 tariffs of 50% on specified Canadian goods have been in effect since August 22, after the August 19 launch, a brief pause and the August 21 collapse of talks. Section 338 applies regardless of USMCA origin — a Canadian-origin vehicle with a perfect certification still pays it — and it stacks on top of applicable Section 232 duties. The covered list was modified effective today, September 15: all-terrain vehicles and additional dairy lines added, rock salt and cement removed. A separate set of Canadian products becomes prohibited from importation on September 29. - Canada's counter-tariffs of 15%, 25% or 50% on more than 700 U.S.-origin products took effect September 8, each rate matching the U.S. rate on the same good. That matters to U.S. exporters directly and to U.S. importers indirectly: Canadian suppliers absorbing counter-tariffs on their own U.S.-sourced inputs are re-pricing. - Section 232 duties of 50% on steel, aluminum and covered copper articles and 25% on automobiles and parts continue to apply to Canadian- and Mexican-origin goods. USMCA origin does not exempt them. The copper smelt-and-cast reporting requirement became an ACE hard reject yesterday. - The Section 301 forced-labor enforcement action covering 60 economies includes both Canada and Mexico on its list — but goods that qualify as USMCA-originating are exempt. Mexican officials have said publicly that the action produces no practical change for USMCA-compliant exporters. Canada has offered no comparable reassurance, because for Canadian goods the 301 layer lands on top of Section 338 and a stalled negotiating track.

If you take one thing from that list: USMCA origin is now worth exactly what it was before July 1 on the general duty and the 301 forced-labor layer, and worth nothing at all against Section 338 or Section 232. Run any Canadian or Mexican SKU through the Tariff Stacking Calculator and the Canada Section 338 Calculator before assuming a certification protects it.

Track one: the United States and Mexico

The U.S.-Mexico track has been the productive one. Three bilateral rounds — Mexico City on May 28–29, Washington on June 16–17 and Mexico City on July 21–23 — worked through a USTR list of 54 "irritants" that Economy Secretary Marcelo Ebrard says is now down to 14. A fourth round was set for Washington in early September. As of this writing no joint statement from that round has been published; we will update this article when one is.

The open items, in rough order of how much they matter to your duty bill:

Automotive rules of origin. Washington wants a 50% *U.S.-specific* content requirement for vehicles to qualify for preferential treatment, on top of the existing 75% regional value content threshold, with reports of a push toward 82% regional content overall. Mexico has refused even a token country-specific carve-out, on the theory that any opening becomes a template that tightens every review cycle. Mexico's private-sector council has argued the requirement must stay regional, not national. This is the single hardest issue and the one most likely to slip into 2027.

Section 232 relief. Mexico is asking for relief from the 25% auto and 50% steel and aluminum tariffs as a precondition for movement on other fronts. Washington has instead asked Mexico to mirror a 232-style tariff wall on steel and aluminum originating outside North America — aimed at China — which Mexico has partly pre-empted with tariffs of up to 50% on roughly 1,400 products from countries it has no trade agreement with. If a deal on 232 emerges, it is far more likely to be a quota or tariff-rate-quota structure than a clean exemption.

Everything else. Agriculture (Mexico rejected a U.S. "seasonality" proposal that would have restricted Mexican produce during U.S. harvest months; food-safety alignment reportedly progressed), energy (U.S. and Canadian demands for non-discriminatory access to Mexico's electricity market versus constitutional provisions guaranteeing CFE a 54% generation share), labor (U.S. business wants a stronger Rapid Response Mechanism; Mexican business wants it less unilateral), and electronic payment services (a new Round 3 topic).

Ambassador Greer told the Senate Finance Committee he would like "at least some arrangements" with both Mexico and Canada by the end of 2026, with the harder structural issues — automotive content, labor, environment — pushed into 2027. Read that carefully. It means the most likely outcome for Mexican-origin goods this year is an *interim* document that addresses some 232 exposure and some sector-specific rules, not a rewritten treaty.

Track two: the United States and Canada

Canada has still not opened substantive, text-based negotiations tied to the joint review. Engagement has consisted of calls and meetings between Trade Minister Dominic LeBlanc and Ambassador Greer, plus the parallel talks on the Section 338 action that collapsed on August 21 when Prime Minister Carney suspended negotiations and recalled Canada's team. In a September 3 speech Carney reiterated that the suspension stood. Canada has consistently pushed to keep the review trilateral rather than split into two bilateral tracks — a preference Mexico shares and Washington has not adopted.

The measurable effects are already visible. The U.S. duties cover roughly $27.6 billion of Canadian goods, about 5% of Canada's annual exports to the United States. A KPMG poll found 42% of Canadian manufacturers have shifted or plan to shift production into the United States and 57% have paused or cut capital spending because of the uncertainty. Trade lawyers widely expect a Court of International Trade challenge to Section 338 itself — the statute had never been used this way, and the question of whether an ITC investigation was required first is unresolved — but no formal case has been publicly reported.

For importers of Canadian goods the practical read is blunt: there is no near-term negotiating path that lowers the Section 338 rate, and the list has already changed twice. Anything you do to manage that exposure has to work without assuming a deal.

Three scenarios to model before Q4 buys

Rather than predict, model. These are the three outcomes that cover the realistic range through year-end, and what each does to the landed cost of a North American SKU.

Scenario A — Interim arrangement with Mexico, Canada still stalled (the USTR base case). An interim U.S.-Mexico document by December that provides partial 232 relief (most plausibly a quota on steel and aluminum, possibly a tariff-rate structure on vehicles) and defers rules-of-origin changes to 2027. Canadian goods stay under Section 338 and 232 at current rates, with the September 29 prohibitions in effect. *Effect:* Mexican-origin 232 exposure falls for in-quota volumes only; nothing changes for Canada.

Scenario B — Status quo through year-end. No interim document; a fifth round scheduled for late 2026 or early 2027. All current tariffs persist. *Effect:* none, which is itself a planning number — it means Q4 inventory bought today at today's rates is the base case, not the downside.

Scenario C — Escalation. Further Section 338 list changes on Canada (the proclamations explicitly reserve that authority), additional Canadian counter-tariff tiers, or a Section 232 action from the pending robotics and industrial machinery or medical equipment investigations that lands on North American suppliers. *Effect:* rates go up on goods that are not currently covered, and the in-transit exemptions that accompanied prior actions have been short — days, not weeks.

The asymmetry is the point. In Scenario A rates go *down* on some Mexican goods after a date you do not yet know. In Scenario C rates go *up* on some Canadian goods after a date you do not yet know. A consumption entry filed today locks in today's rate in both directions. A warehouse entry does not.

Why the rate-on-withdrawal rule is the hedge

Goods entered into a CBP-bonded warehouse on a Type 21 entry pay duty at the rate in effect on the withdrawal date, not the entry date. That rule, explained in detail in our withdrawals guide, does two different jobs on the two USMCA tracks.

On the Mexico track it preserves upside. If you are importing Mexican-origin steel, aluminum or automotive articles that currently carry a 232 layer, and Scenario A produces quota relief in November, inventory sitting in bond withdraws at the post-relief rate while inventory you entered for consumption in September paid the full 50% or 25% and has no refund path. The cost of that option is storage and a broker's withdrawal filings, both of which are known numbers you can put into the Duty Deferral Calculator.

On the Canada track it preserves choice. Section 338 is 50% today and could be 50% in March. Bonding does not lower that. What it does is keep the goods out of U.S. commerce, and therefore out of the duty calculation, until you decide what to do with them: withdraw for consumption when a customer order justifies it, transfer to another bonded facility closer to the buyer, or export without ever paying U.S. duty — which is the answer for Canadian goods that were destined for a re-export market in the first place. Our Section 338 versus drawback comparison works through when export-from-bond beats pay-and-claim.

Two limits that need saying plainly. First, bonding is not a hedge against a prohibition: goods barred from importation cannot be warehoused, and the September 29 list should be handled as an admissibility problem, not a duty problem — see the Canadian inventory playbook. Second, the rule cuts both ways. If Scenario C raises a rate on a good you have in bond, withdrawal after that date pays the new rate. The withdrawals guide covers partial withdrawals, which are how importers manage that: pull what the market needs now, leave the rest to wait out the next proclamation.

A working checklist for the next 90 days

1. Split your North American SKUs into three buckets — USMCA-qualifying with no 232/338 exposure, USMCA-qualifying with 232 exposure, and Section 338-covered — and stop treating "USMCA origin" as a single risk category. Only the first bucket is unaffected by anything in this article. 2. Re-verify origin certifications on the first two buckets. The forced-labor 301 exemption and the general-duty preference both depend on a valid certification, and Mexico's own export-control and content rules have been changing under the review. A certification that was correct in 2025 may rest on supplier declarations that no longer hold. 3. Model landed cost under all three scenarios, not one. For multi-line invoices, importers commonly run classification and duty per line in software such as Zonos, which lets you save a scenario per withdrawal date rather than rebuilding the sheet each time a proclamation posts. (Disclosure: this is an affiliate link — FreightFigures may earn a commission if you sign up, at no additional cost to you. See our full affiliate disclosure.) 4. Check bond sufficiency now. A program of warehouse entries defers duty, which shrinks the twelve-month duty history CBP uses to test continuous-bond sufficiency, while the liability behind the bond grows. Size for what you will withdraw, using the Customs Bond Calculator, and confirm your importer number survives the September 18 Form 5106 sweep. 5. Decide the withdrawal trigger before you bond. "When the interim arrangement is signed," "when the customer PO lands," or "when the September 29 admissibility question is resolved" are all defensible triggers. "When it feels right" is not, and it is how bonded inventory turns into a five-year storage bill. 6. Watch the calendar, not the headlines. The dates that move your duty bill are proclamation effective dates and CSMS messages, which we track in the September deadline calendar. Negotiating-round press statements do not change a rate until a Federal Register notice does.

The Bottom Line

The USMCA review has become two negotiations with different tempos. The Mexico track is slow but real, and its most likely 2026 output is an interim arrangement that lowers some Section 232 exposure on a date nobody can name yet. The Canada track has stopped, Section 338 is live at 50% with a list that changed again today, and the September 29 prohibitions arrive in two weeks. USMCA origin still does its old job on the general duty and the 301 layer, and does nothing against 338 or 232. For inventory on either track, the bonded-warehouse rate-on-withdrawal rule is the one tool that lets you buy now and decide the duty date later — with the honest caveats that it does not beat a prohibition and it does not protect against a rate that rises before you withdraw.

If your Canadian or Mexican inventory lands in the Southeast — by rail from the northern gateways, by truck from the border, or through the Port of Charleston on a re-routed ocean leg — C&C Warehouse is a CBP-bonded and General Order facility minutes from the port that receives in-bond cargo, files against your Type 21 entries, and handles partial withdrawals, transloading and export-from-bond. Use the form below to describe the SKUs and the trigger you have in mind.

FAQ

Is USMCA still in effect after the July 1, 2026 joint review? Yes. The United States declined to confirm a 16-year extension, which triggers annual reviews under Article 34.7, but the agreement itself remains fully in force and preferential origin claims still eliminate the general duty on qualifying goods.

Does USMCA origin exempt Canadian goods from the Section 338 tariff? No. Section 338 tariffs apply to covered Canadian products regardless of USMCA origin and are assessed in addition to any applicable Section 232 duties.

What is an "interim arrangement" in the USMCA review? USTR's stated goal of reaching partial bilateral documents with Mexico and Canada by the end of 2026 that address some issues — most plausibly Section 232 relief structures and sector rules — while deferring structural changes such as automotive rules of origin to 2027.

If a U.S.-Mexico interim arrangement lowers a Section 232 rate, can I get a refund on entries already filed? Not under any mechanism announced so far. Duty is assessed at the rate in effect on the date of entry for consumption or withdrawal from warehouse. Goods still in a bonded warehouse on the effective date of a rate reduction withdraw at the lower rate; goods already entered do not.

Can I bond Canadian goods that will be prohibited on September 29? Goods barred from importation cannot be entered into a bonded warehouse, and goods already in bond that become prohibited face an admissibility question at withdrawal. Treat the September 29 list as an admissibility issue and get broker advice on specific lines before relying on bonded storage.

Is there a bonded warehouse in the Southeast that can hold Canadian or Mexican inventory during the USMCA review? Yes. C&C Warehouse is a CBP-bonded and General Order facility minutes from the Port of Charleston, receiving in-bond cargo by truck and rail with partial-withdrawal, transload and export-from-bond services.

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