As the US-Mexico-Canada Agreement (USMCA) approaches its required six-year review in July 2026, senior economist Adam Hersh warned that North American trade rules still favor corporate cost-cutting over worker-centered growth. In a wide-ranging interview on the America’s Work Force Union Podcast, Hersh traced how modern trade policy evolved from postwar cooperation into a rules system that strengthened capital mobility, weakened labor leverage and accelerated the offshoring of good-paying manufacturing jobs.
Hersh argued that the USMCA did not “fix” the core problems of the North American Free Trade Agreement (NAFTA), citing continued manufacturing job losses and loopholes in auto rules of origin that can allow non-North American content to enter supply chains. The upcoming review, he said, is a rare chance to negotiate enforceable labor standards, greater alignment with industrial policy and fundamental protections for communities and the environment.
Trade policy is often sold as a technical exercise: Tariff schedules, market access and supply chains. However, for working people, trade rules are a lived reality. They shape whether a community keeps a plant, a bargaining unit can negotiate a wage increase, and employers can credibly threaten to move jobs across a border.
On the America’s Work Force Union Podcast, senior economist Adam Hersh described the upcoming USMCA review as an opportunity to confront decades of policy choices that helped drain good-paying manufacturing jobs from the United States. The USMCA, which replaced NAFTA, includes a mandatory review clause that forces the United States, Mexico and Canada to revisit the agreement by July 2026.
If the three countries do not affirmatively agree to continue the treaty, the agreement does not immediately disappear. Instead, it enters a sunset pathway that can keep its rules in place for years. That timeline, Hersh argued, creates both urgency and risk: the region could remain locked into flawed regulations, or reopen negotiations, potentially making them worse.
Hersh explained that USMCA’s review mechanism reflects a broader political shift away from sweeping trade agreements. Large trade deals have become politically hazardous because many communities have not experienced the promised benefits, he said.
Under the USMCA, the three countries must review the agreement six years after it takes effect. The review process is designed to force a decision point. The danger is that political brinkmanship could inject uncertainty into investment decisions, while failing to address the structural problems that have driven offshoring and wage suppression, Hersh said.
In his view, the review should be seen as an opportunity to rewrite the rules in a way that prioritizes workers, communities and environmental sustainability.
Hersh traced today’s trade system to the post-World War II era, when leaders sought to prevent a repeat of the global depression and conflict that followed trade collapse and protectionist spirals.
The early postwar framework produced institutions and agreements that shaped global economic governance. Over time, Hersh said, the system shifted. Beginning in the late 1970s, a market-fundamentalist approach gained influence, and trade rules were renegotiated to expand corporate rights and constrain governments' ability to regulate in the public interest.
He believes this shift culminated in the creation of the World Trade Organization in the mid-1990s and the signing of NAFTA. Hersh described NAFTA as a turning point that accelerated the integration of production across borders while increasing the leverage of capital owners to chase low-cost labor and weaker regulatory environments.
Hersh argued that trade policy affects labor relations even when work does not leave the U.S.
He explained that during organizing campaigns and collective bargaining, employers often use relocation threats to dampen worker demands. Those threats become more credible when trade rules make it easier to shift production. The result, Hersh said, is a chilling effect on wages, benefits and working conditions.
He emphasized that trade competition is not the only driver of job quality decline and pointed to a broader policy environment that includes weakened labor law enforcement, the erosion of wage standards, and tax policy that rewards corporate consolidation. Still, he noted, trade rules remain a central mechanism that amplifies employer power.
Hersh said the USMCA did not reverse the long-term trend of manufacturing job loss.
He cited continued job shedding and furloughs in the manufacturing sector after the agreement was signed, arguing that the deal’s changes were insufficient to alter corporate incentives.
For labor, the question is not whether trade exists. It is whether trade rules are designed to raise standards across borders or to intensify a race to the bottom.
The auto industry, Hersh said, is a defining feature of North American trade. Cross-border production is deeply integrated, and policy changes ripple through a wide supplier network.
He focused on “rules of origin,” which determine how much of a vehicle or component must be made in North America to qualify for tariff-free treatment under USMCA.
Hersh argued that weak penalties and technical loopholes can undermine the intended effect. If the cost of noncompliance is low, companies may treat it as a manageable expense rather than a deterrent.
He also described how different accounting approaches can allow non-North American content to be counted as regional, depending on how intermediate components are classified. Over time, those mechanisms can allow foreign content to enter supply chains while still receiving preferential treatment, he added.
Hersh said trade conflict and tariff policy can reshape supply chains in unexpected ways.
He described how companies may seek alternative pathways to reach North American markets, including shifting production footprints to third countries. In his analysis, investment flows and equipment exports suggest a growing manufacturing footprint in Mexico that can be used to access the region’s market.
For labor, the concern is that supply chain shifts can import weaker labor protections and lower standards into North American production networks, undermining wage growth and job security.
Hersh said the upcoming USMCA review will likely include disputes about industrial strategy and external economic relationships.
He described a global environment in which countries are diversifying trade relationships to reduce dependence on any single partner. That dynamic, he argued, complicates North American coordination and raises the stakes for a clear strategy that protects workers.
Hersh framed the July 2026 review as a test of whether policymakers will negotiate trade rules that deliver measurable benefits for working people.
A worker-centered approach, he suggested, would include:
For unions, the outcome will influence not only trade flows but bargaining power.
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