“This is the most stringent automotive and commercial vehicle agreement that we have on the books in the United States,” Meuwissen said. “We basically had a complete rewrite of our chapter of the agreement, with brand new rules and requirements being put in that impact the sector every day.”
The agreement entered force on July 2020 and has a 16-year timeline. Different vehicle classes covered by the agreement have multi-year phase-in periods. The phase-in period for commercial vehicles is seven years and concludes in 2027.
Another significant change for USMCA is a review mechanism, scheduled for July 2026, where the three countries will discuss how the agreement is working and make changes. However, the U.S. has never experienced a trade agreement review process like this, so the outcome of the review is uncertain.
“Honestly, we don’t know how the reviews can be managed,” Meuwissen said. “We’ve never done one like this before; there’s no prototype for this type of review.”
Some terms that the countries might renegotiate include restricting Chinese investment in Mexico, stricter regional value content requirements, and increased duty rates to compel compliance, she noted.
Regarding the Trump Administration’s talk of new tariffs, Wabash President and CEO Brent Yeagy noted that Wabash undertook steps following “the 2018 Trump tariff onslaught” that have “dramatically reduced” the company’s exposure, characterizing it “almost de minimis” at this stage.
“We have built quite a moat around the incoming supply tariff risk. We know our competitors are still substantially exposed to that tariff risk across many different dimensions, so we feel pretty good about that,” Yeagy said during the company’s Q4 earnings call. “From a manufacturing location standpoint, we have one facility that has some level of exposure to potential tariffs on Mexico. Our competitors have substantially more exposure than we do, and we have available capacity in our domestic operations to shift production as needed to minimize those tariff impacts if they were to occur.”
What to expect
Speaking with EBM in the days following the tariff announcements, Jennifer McNealy, director–CV market research and publications at ACT Research, suggested the rapidly evolving situation had the firm’s analysts scrambling to model the impacts on freight, trucks, and trailers.
“It’s a very fluid situation. We are working on scenarios, but to say what’s in those scenarios, and how many we’re going to end up having, I really don’t know,” she said. “It’s literally what we’re working on in-house right now.”
Not that the freight outlook for 2025 was overly promising to begin with.
“Those [carriers] that have managed to stick it out this far are probably pretty good at managing their costs,” Tim Denoyer, ACT Research VP and senior analyst, said. “And they’re going to need to stick it out for a while longer. The load activity is not really picking up very much yet.”
While there have been some positive signs around seasonal events, Denoyer suggested that demand remains relatively soft as many small fleets and owner-operators are more picky about their hauls.
“It’s going to take a little bit more economic growth and a reduction of equipment supply to turn the balance higher,” the ACT Research analyst said. “It’s not quite there yet. It’s going to be a little while.”
With prebuy activity already starting for fleets looking to get ahead of 2027’s more stringent emissions regulations, the next couple of years could be challenging for the industry with latent capacity and underutilized equipment affecting demand.
“That keeps the demand environment relatively soft—in part because private fleets are in-sourcing some freight,” Denoyer explained. “And in part because they’re also increasingly competing in the for-hire spot market.”
Denoyer did share some optimism but noted: “These next couple of years will be a challenge.”