Lorie Logan, President of the Federal Reserve Bank of Dallas, has flagged a noticeable deceleration in investment activity across US border regions. The culprit: growing uncertainty as the formal review of the United States-Mexico-Canada Agreement draws closer.
The USMCA, which governs roughly $1.93 trillion in North American goods and services trade, is scheduled for its mandatory review process beginning in July 2026. Groundwork discussions are expected to start earlier that year.
Border communities feel the freeze first
Logan’s observations zero in on a pattern that’s been building for months. Foreign direct investment in both Mexico and Canada has softened, and nearshoring projects that were once accelerating have hit the brakes. Companies that were pouring capital into manufacturing operations along the US-Mexico border are now sitting on their hands, waiting to see what the review produces.
Manufacturing employment in border areas has already started to decline. New greenfield investments have slowed to a crawl.
