Firms Diversify as Trade Confidence Erodes
A Livingston International report finds North American trade confidence is weak on both sides of the border as businesses reroute supply chains.
Updated on Nov. 2, 2026 in International Trade
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Livingston International released a trade dynamics report showing that only 34 percent of U.S. businesses and 28 percent of Canadian businesses feel confident about North American trade stability over five years. U.S. and Canadian firms are diversifying sourcing and export markets to reduce trade risk.
Why it matters
Washington's decision in July not to renew the USMCA has pushed the agreement into a yearly review process ending in 2036, leaving cross-border trade uncertain. Tariff-related compliance hurdles and cost increases from the U.S.-Canada trade war are compounding that uncertainty.
Survey results show 84 percent of U.S. importers and 91 percent of Canadian importers are exploring new sourcing locations. More than three-quarters of U.S. businesses and 77 percent of Canadian firms report serious hurdles complying with tariff policies, though the report does not quantify the resulting cost increases.
The players
Livingston International
A Canadian customs brokerage and trade services firm that published the report on North American trade confidence.
The details
Firms on both sides of the border are diversifying operations to guard against further trade disruption, with Canadian exporters and U.S. businesses favoring China and Vietnam respectively as alternative sourcing options. Europe, the United Kingdom, Central and South America are being considered for new export ventures.
Timeline
July: Washington decided not to renew the USMCA, which now enters a yearly review process.
Within the next two years: Three-quarters of U.S. respondents and 62 percent of Canadian respondents expect the trade environment to improve.
2036: The USMCA yearly review process terminates.
Market Dynamics
Washington's decision not to renew the USMCA and move it into a yearly review cycle ending in 2036 marks a departure from the agreement's original long-term framework. Businesses are now reallocating investment away from North American supply chains toward Asia, Europe and Latin America.
Shoppers and businesses dealing with cross-border goods should expect continued tariff-driven cost pressure and possible supply changes as firms shift sourcing. Importers planning multi-year contracts should account for uncertainty around the USMCA review timeline.
The takeaway
Companies are treating North American trade as a shorter-horizon bet, so diversifying suppliers now is the pragmatic hedge. Monitoring the USMCA review calendar will help plan sourcing decisions.
What happens next
The USMCA enters its yearly review process, with the agreement set to terminate in 2036 unless the review process changes its course.
Further reading
Explore more on International Trade developments shaping cross-border commerce.
Source note: This article includes information reported by WWD.
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