Key takeaways:

• • • The deal isn’t dead, but it’s not settled either 鈥� USMCA stays in force for now, but the refusal by the US to confirm a 16-year extension triggers rolling annual reviews, with a hard expiration in 2036 if no resolution is reached.

    • Auto rules of origin are the central battleground 鈥� Washington is pushing to raise North American content requirements well above the current 75% threshold, with a specific push for more US-based final assembly and parts production.

    • Uncertainty itself is a cost 鈥� Automakers make multibillion-dollar, multi-decade plant and supply-chain investments, and not knowing what the rules will look like next year (let alone in 2036) makes those bets harder to justify.

On July 1 鈥� the sixth anniversary of the United State-Mexico-Canada Agreement听(USMCA), taking effect 鈥� the United States, Mexico, and Canada were required under the agreement’s to jointly decide whether to extend the pact for another 16 years. The U.S. Trade Representative, Jamieson Greer, announced that the Trump Administration would not agree to renew USMCA in its current form, citing persistent US trade deficits with both neighbors and what the administration considers 鈥渦nresolved shortcomings鈥� in the deal. The move by the US pushed the North American trade pact into a new period of annual reviews and extended negotiations over tariffs, market access, and manufacturing rules.

This isn’t a withdrawal; indeed, the agreement will remain in force for another decade, providing that none of the three countries exits the agreement. However, the lack of a clean renewal opens the door to years of contentious negotiations over the rules governing continent-wide supply chains. Both Canada and Mexico had favored a straightforward 16-year extension, but the US was unwilling to sign off without changes.

Why automakers are ground zero

No sector is more exposed to this outcome than automotive manufacturing. Vehicles and parts routinely cross the borders of the US, Mexico, and Canada multiple times before final assembly, a pattern built up since the North American Free Trade Agreement (NAFTA) first opened North American auto trade in 1994, and the sector alone accounts for roughly 18% of all trade among the three countries.

At the heart of the dispute is the 鈥� the share of a vehicle’s value that must originate in North America to qualify for duty-free treatment. USMCA currently sets that threshold at 75% for passenger vehicles and light trucks, up from 62.5% under the old NAFTA rules. The Trump administration is reportedly seeking to push that figure to 82%, with half of that value required to come specifically from the United States 鈥� a change aimed squarely at pulling more engine, transmission, and assembly work back across the border.

That shift likely would ripple through the industry unevenly. The annual from American University’s Kogod School of Business, which tracks US content in vehicles annually, found that only 109 models are estimated to hit 51% or more US content for its upcoming index, down from 123 the year before 鈥� a sign of how far the current supply chain sits from any tightened standard. As one researcher involved in that analysis explains, automakers will ultimately have to weigh absorbing new tariff costs against relocating engine, transmission, and component production 鈥� or even entire assembly plants 鈥� into the United States.

have largely tried to protect the status quo rather than push for disruption. General Motors, Ford, and Stellantis have publicly urged Washington to extend the existing agreement, arguing it’s essential to American production, even as they privately brace for the possibility of major changes. Stellantis has also warned regulators about a separate risk: If US rules don’t keep pace with vehicles imported from outside North America, American-built models will keep losing ground to Asian imports, to the detriment of US autoworkers.

Managing the uncertainty tax

Perhaps the most immediate effect isn’t a specific rule change 鈥� it’s the absence of a deadline forcing one. that the decision doesn’t immediately change the flow of goods and services across North America, but it could weigh on business planning, particularly in industries that depend on long-term capital commitments.

Scott Lincicome of the Cato Institute, for example, pointed to exactly this risk, telling that the resulting uncertainty could weigh on investment decisions, which matters enormously for an industry that plans plant investments, supplier contracts, and vehicle platforms on five- and ten-year horizons.

There’s also a geopolitical wrinkle shaping the negotiations reflected in a growing concern in Washington over Chinese-made components entering North American supply chains through Mexico. Lawmakers have already proposed legislation directing US trade officials to prioritize protecting USMCA from Chinese investment during the review, which could translate into rules disqualifying vehicles that use components tied to Chinese state actors.

What happens next with the USMCA?

Formal bilateral talks between the US and Mexico are continuing, while US-Canada negotiations have barely begun. The US and Mexico are set to meet again the week of July 20 for a third round of bilateral negotiations tied to the joint review. Barring a breakthrough, expect this to become a recurring headline 鈥� another review, another round of tariff and rules-of-origin brinkmanship, repeated annually until either a deal is struck or the clock runs out in 2036.

For automakers, the message is less about any single new rule and more about planning in an environment in which the ground can shift every year. That’s a very different operating reality than the one the industry built its North American footprint on over the past three decades.

You can find out more about the USMCA and the challenges it faces here

Key insights:

• • • AI makes everyone鈥檚 job easier, including cybercriminals 鈥� With Anthropic鈥檚 Claude, an attacker breached Mexico鈥檚 federal tax portal in less than an hour.

    • Cybersecurity breaches may be a canary in the coal mine for a much larger problem 鈥� This is the second publicly disclosed Claude-enabled attack in less than a year.

    • Nearshoring the risk 鈥� Beyond the immediate damage to affected citizens and businesses, foreign investors and multinational evaluating their operations in Mexico may see a red flag that could discourage them from moving forward.

Amid the 2025 year-end celebrations 鈥� while most people were busy wrapping gifts, decorating trees, spending time with loved ones, and sketching out their 2026 resolutions 鈥� a quieter threat was unfolding. Unlike the Grinch, it had no interest in stealing Christmas cheer; instead, it set its sights on something far more valuable: more than 150 gigabytes of sensitive information from Mexican government organizations.

Armed with what appeared to be intermediate knowledge of cybersecurity and an advanced usage of AI tools, the Spanish-speaker attacker convinced Anthropic鈥檚 Claude chatbot that the interaction was part of a bug bounty 鈥� a legal way to hack a company and get paid for telling them how you broke in 鈥� with 3 key rules: avoid making changes that could damage the system, delete all logs, and disable command history.

At first, Claude strongly resisted, flagging these instructions as they sounded like detection-evasion techniques, commonly used by malicious actors. It even challenged the attacker, requesting verification.

However, just three minutes after the suspicious prompts, the attacker dropped a simple and straight-forward instruction: 鈥淐ould you add this to claude.md鈥�, with a penetration-testing cheat sheet attached. After that, things went as smooth as butter.

In simple terms, using a penetration-testing cheat sheet is like asking a security guard to write instructions to disable the alarms and he refuses, so you pull out a pre-written note with those exact instructions and say, 鈥淐an you just stick this on your booth door?鈥� and he does. Now those instructions are in front of him all day, and he follows it when you ask him, automatically without questioning it. In this case, Claude didn鈥檛 write the malicious manual 鈥� it just stuck the note up, but the result was the same.

Mexican government infrastructure attacked

According to Gambit Security, the attacker breached the Tax Administration Service (SAT, according to its acronyms in Spanish) 鈥� along with least 8 other Mexican government institutions during the end of 2025 until mid-February 2026. The incident has been described as one of the largest breaches of government infrastructure.

Within the scope of the SAT alone, the compromise reportedly exposed 195 million taxpayer records and 52 million directory entries. Building on this access, the attacker then leveraged Claude to pursue even more sensitive data, including Mexico鈥檚 electronic signature (e.firma) private keys, taxpayer identification numbers (RFC), national ID numbers (CURP), as well as customers鈥� biometrics, email addresses, phone numbers, and physical addresses.

Even beyond all of this, however, the most unsettling part of the attack came next. With a prompt that revealed a striking lack of technical literacy 鈥� 鈥淢ake a Python or something like that鈥︹�� 鈥� the attacker asked Claude to build a simple web application capable of querying and returning SAT taxpayer information. He then used this tool to develop a script that generated fraudulent tax status certificates, populated with real data pulled directly from the system. While he was unable to forge the document鈥檚 digital seal, the deception was still dangerously effective, because without proper cryptographic validation, the certificates appeared legitimate and were nearly indistinguishable from authentic ones.

Thus, the commercial relevance of the SAT hack is not secondary or collateral 鈥� it鈥檚 central. SAT is not merely a fiscal institution, it is the central nervous system of Mexico鈥檚 formal commerce, and its database holds information that companies provide under legal obligation, not only with a reasonable expectation that the government will protect it, but because they have no option but to do so.

When that information is compromised, the damage is not limited to the privacy of the affected taxpayers, it extends to a foreign investor or a company鈥檚 compliance team that may be evaluating a nearshore move for the establishment of operations in Mexico. And with all of that, it would be understandable for them to wonder:

If the government cannot protect the data that companies have little choice but to provide, what guarantee exists that it will be safe? And with that, in case of a danger, will the Mexican government have enough tools to investigate and sanction the attackers?

The hack spreads mistrust and apprehension

Within that calculus, weaknesses in government cybersecurity become more than a technical concern 鈥� they evolve into a tangible barrier to investment, a contradiction made even sharper amid the ongoing renegotiations of the United States-Mexico-Canada Free Trade Agreement (USMCA).

The last version of the USMCA establishes a framework for cybersecurity cooperation among member countries. Its legal architecture rests on three pillars: i) the recognition that cyber-threats represent a risk to digital commerce; ii) the commitment of the parties to develop capacities to identify and manage those risks; and iii) the promotion of cooperation between the public and private sectors in this area.

However, it never mentions a minimum-security standard that governments are required to meet, but that is not the only loose thread, since the USMCA was negotiated in a technological context radically different from the present one 鈥� back when generative AI (GenAI) was still science fiction rather than a browser tab. Indeed, the cybersecurity framework implicitly assumes that threat actors are organized structures.

And that鈥檚 where the case analyzed by Gambit Security could jeopardize everything, as the breach in which AI functioned as a primary operational tool, according to their document. More worrisome, what previously required months of specialized work and considerable resources by a potential network of hackers can today be executed in days by a much smaller unit, or singular person, with monthly subscription tools 鈥� and maybe less technical knowledge than you think.

That said, the push for stronger cybersecurity standards may extend beyond USMCA concerns and evolve into a broader industry imperative, particularly in places in which the agreement itself may fall short.

Claude as the mechanism

This attack marks the second known incident involving the use of Anthropic鈥檚 Claude 鈥� the first having been linked to a Chinese state-affiliated group 鈥� and it is unlikely to be the last. Without clearer regulation and stronger security standards, such misuse will not remain an exception but rather become an increasingly recurring threat not only in Mexico but also in Canada and the United States. Even in the US, which maintains comparatively advanced cybersecurity frameworks, experts acknowledge that defenses are still struggling to keep pace with an increasingly complex threat landscape.

The US is not the only one taking the lead, however, as the European Union has already introduced the first comprehensive AI regulatory framework, requiring systems to be resilient against misuse (including for cyberattacks) and obligating companies to report and address vulnerabilities. However, these rules primarily apply to AI developers rather than those who weaponize the technology. By contrast, the US has begun to address this gap by enacting laws that treat the use of AI in criminal activity as an aggravating factor, leading to harsher penalties.

As such, this is not only an alert for Mexico to improve its own cybersecurity practices but is certainly a broader call to action for all three countries. Regulating a technology that evolves faster than legal processes is both urgent and challenging 鈥� but not impossible.

You can find out more about the challenges facing Mexico on several different fronts here

Key highlights:听

• • • The scale of risk demands urgent attention 鈥� The World Cup’s five-week span across three nations creates a human trafficking risk profile far beyond any previous North American sporting event.

    • Geographic exposure extends far beyond host cities 鈥� Unlike the Super Bowl, where risk is concentrated in one metro area, the World Cup’s national identity-driven fan engagement means every city in the US, Canada, and Mexico is effectively a participant city.

    • Cross-sector preparation is the most critical investment 鈥� Cutting down siloed operations among law enforcement, financial institutions, and NGOs is required, that means establishing financial institution task forces, training frontline bank branch employees to recognize trafficking indicators, sharing cross-sector information, and amplifying public awareness campaigns before the tournament begins is crucial.

The 2026 FIFA World Cup will be the largest sporting event ever hosted on North American soil, a tournament with 104 matches spanning more than five weeks across three nations and drawing an estimated 6.5 million visitors from around the world. While the United States hosts large sporting events like the Super Bowl each year, the World Cup brings with it the unique challenges of length of time, fan influx from around the globe, and geographic expansion.

Assessing the scale of human trafficking risk

To understand the magnitude of the human trafficking risk involved in events such as this, it is useful to apply a framework that accounts for three variables: i) the likelihood of a trafficking event; ii) the potential extent of damage; and iii) the duration of exposure. When that framework is applied to the 2026 World Cup, the human trafficking risk associated with the event registers high due to numerous factors.

For more on this, tune into the 成人VR视频 Institute’s latest “Clarity” podcast

The most significant differentiating factor of the World Cup is its time duration. The Super Bowl is a single-day event, and the Olympics run approximately two weeks. The 2026 World Cup spans more than five weeks across three nations, a duration that has no modern sporting equivalent. The last three World Cups, held in Brazil, Russia, and Qatar, offer limited comparative value given the substantial differences in legal frameworks, cultural contexts, and infrastructure. For purposes of risk assessment, this is why the Super Bowl represents the most relevant domestic benchmark, even though it falls considerably short as a true comparison.

Human trafficking evidence from the most recent Super Bowl

The most recent Super Bowl, held in the San Francisco Bay Area in February 2026, illustrates the scale of the human trafficking challenge. A coordinated anti-trafficking campaign conducted across 11 Bay Area counties resulted in the recovery of 73 sex trafficking victims, including 10 minors, and 29 arrests, all in connection with a single-day event.

Sex advertisement data from that period further substantiates the scale of human trafficking concern. In the months preceding the event, advertisement volume rose steadily before spiking dramatically during Super Bowl weekend and declining sharply in the days that followed. Analysis that was restricted to advertisements referencing the Super Bowl by name showed trend lines that remained essentially flat until the event itself, at which point volume surged significantly.

Likewise, examination of phone numbers associated with those advertisements revealed organized and purposeful movement. Nearly 500 unique numbers that had posted sex advertisements in other states in the preceding weeks appeared in San Francisco during the event.

The risk of human trafficking expanding beyond the host city is one additional insight uncovered during the anti-trafficking operation during the Super Bowl. Advertisements referencing the Super Bowl spiked simultaneously in Boston and Seattle, the home cities of the two competing teams. In the context of the World Cup, every city in the United States, Mexico, and Canada is effectively a participant city, and national identity rather than team affiliation drives fan engagement. The geographic distribution of risk is therefore exponentially greater than anything observed around the Super Bowl.

Hotspots of sex ads

What anti-trafficking partners should do now

Those organizations and institutions that take action in advance of the World Cup will be substantially better positioned to detect exploitation and protect vulnerable individuals. More specifically, these organizations should:

• Establish financial institution task forces in advance of the event 鈥� Convening local financial institutions to align on existing practices and identify gaps will aid in ensuring all parties are on the same page. It also establishes relationships and procedures that cannot be built effectively during a five-to-six-week surge in cross-border transactions. Activating established information-sharing mechanisms, such as the processes supporting the filing of and the , will be essential for detection and pattern recognition.
• Institute branch-level employee training at local financial institutions 鈥� Frontline employees possess local knowledge that no centralized system can replicate. A branch employee in a high-traffic urban location understands the patterns of their customer base and is often the first to recognize when something is amiss. What they frequently lack is the context in which to interpret that instinct and the guidance to act upon it. Addressing that training gap before the World Cup represents one of the highest-value preparedness investments available to financial institutions at this time.
• Dismantle institutional silos 鈥� Siloed operations, in which law enforcement, financial institutions, and non-governmental organizations (NGOs) each operate independently, represent the least effective organizational posture for an event of this scale. Institutions that establish cross-sector relationships and information-sharing commitments in advance will be meaningfully better equipped to respond.
• Develop and amplify public awareness campaigns 鈥� Research demonstrates that sustained public awareness campaigns and visible law enforcement presence reduce demand. Host cities, law enforcement agencies, and NGOs should treat this as actionable guidance in planning their response strategies.

The 2026 FIFA World Cup is not simply another major sporting event. The institutions, agencies, and organizations that approach it as such will find themselves unprepared for a scale of human trafficking risk that North America has never previously encountered.

You can find more about the resources, tools, and information that cities and organizations need to address听human trafficking around large-scale sporting events at听the 成人VR视频 Institute鈥檚 Large-Scale Public Events Toolkit here

Key insights:

• • • Big sporting events create perfect cover for sex trafficking 鈥� The World Cup鈥檚 massive crowds, temporary workers, and stretched local infrastructure make it easier for traffickers to blend in and exploit vulnerable people while staying largely out of sight.

    • Money trails and online ads are where traffickers slip up 鈥� Trafficking often leaves patterns, such as payments tied to commercial sex ads, round鈥慸ollar peer鈥憈o鈥憄eer transactions, and repeat phone numbers or language across online ads. Banks and investigators can spot these red flags, if they know what to look for.

    • Early, cross鈥憇ector collaboration is what actually makes a difference 鈥� The strongest prevention efforts happen before kickoff, when law enforcement, financial institutions, and nonprofits share intelligence, use formal information鈥憇haring tools, and build trusted local networks to respond quickly and protect victims.

As millions of soccer fans descend upon stadiums across North America for the 2026 FIFA World Cup in June and July, perpetrators of human rights crimes also are getting ready to operate in the shadows of host cities. Criminal networks are preparing to exploit the crowds, traffic, and chaos during the event by trafficking vulnerable individuals for commercial sex.

Human traffickers and organized crime groups often exploit major sporting events as opportunities to make quick money because the massive influx of visitors, temporary workers, and strained infrastructure creates perfect conditions for traffickers to operate while being largely undetected. At the same time, the stakeholders involved in countering this illegal activity 鈥� including law enforcement, civil society organizations, and financial institutions 鈥� stand ready to detect it, disrupt it, and protect vulnerable individuals who are exploited by criminal actors.

Indeed, close coordination and collaboration among these entities in advance of the games is key. To that end, the Association of Certified Anti-Money Laundering Specialists (ACAMS) and 成人VR视频 are collaborating on a virtual and live event series to support these planning counter-trafficking efforts among stakeholders in several local cities this Spring.

Why major sporting events attract human trafficking activity

Not surprisingly, large crowds draw business opportunities whether they are legitimate or illicit. Collaboration between public and private entities underscore spikes in human trafficking activity. For example, during a recent large sporting event in 2025, 成人VR视频 Special Services partnered with federal law enforcement and other partners to identify nine adult encounters & services offered, which led to the recovery of two juveniles from sex trafficking and three state arrests

Common industries that involve the exploitation of vulnerable individuals include hospitality, construction, illicit massage businesses, escort services, and adult content production. The chaos of events and large influx of people mask the reality that exploitation is happening and makes detection significantly more challenging during these high-traffic periods.

Human traffickers and organized crime groups often exploit major sporting events as opportunities to make quick money because the massive influx of visitors, temporary workers, and strained infrastructure creates perfect conditions for traffickers to operate while being largely undetected.

Critically, understanding human trafficking as a business model depends on the recruitment of vulnerable people and access to money flows. These aspects of the business are also where detection can occur. Financial institutions and money service businesses can identify suspicious transactions related to human trafficking by understanding and recognizing specific transactional patterns, including payments to commercial sex advertisement websites, round-dollar peer-to-peer transactions, and merchant services linked to illicit massage businesses.

This online footprint left by traffickers proves invaluable for detection. Investigators track advertisements across adult services websites, identifying criminal networks through repeated phone numbers, distinctive emojis, and similar wording that may appear across multiple cities. However, smaller-scale operations present significant challenges as well. When the trafficker is an intimate partner or family member with limited transaction volumes, detection becomes exponentially more difficult without external intelligence.

Collaboration is key for prevention and detection

The most critical element for combating human trafficking at major sporting events is collaboration among anti-trafficking experts and employers of these professionals. Effective prevention requires building strong partnerships before these major events occur. Specific actions that can be taken include:

Establishing multi-sector task forces 鈥� The most successful anti-trafficking efforts involve joint task forces that combine federal, state, and local law enforcement with trusted private sector partners and supportive nonprofits or non-government organizations (NGOs) that offer victim services. This toolkit for large scale public events and other anti-trafficking toolkits are excellent resources for local host cities to use to execute these partnerships. These collaborative mechanisms allow different entities to share information in a timely manner.

Leveraging information sharing mechanisms 鈥� Financial institutions can use Section 314(b) authority for peer-to-peer information sharing between banks. This allows financial institutions to piece together fragments of suspicious activity that individually might seem insignificant but collectively reveal trafficking networks. Large federal agencies are consumed by multiple priorities and benefit from information sharing through Section 314(a) and assistance from financial sector partners during special operations to act as a force multiplier. Law enforcement also can benefit from detailed Suspicious Activity Reports (SARs) that contain specific dollar amounts, clear timelines, behavioral observations, and explicit keywords like human trafficking.

Preparing host cities by building networks and outreach in advance 鈥� Some World Cup host cities have already established human rights plans with robust collaborative systems within local task forces, government awareness campaigns, QR codes that link to support services, and multidisciplinary safety plans.

In addition, anti-trafficking professionals across all sectors are accessible and willing to help. Resources include national hotlines, such as the , referral directories on website, and the for cases involving minors. The most important step is simply reaching out to establish connections before crises occur.

Preparing for a safer event

The 2026 World Cup presents a pivotal moment to strengthen collaborative efforts against human trafficking across North America’s host cities. By establishing robust information-sharing networks between financial institutions, law enforcement, NGOs, and host communities before the tournament begins, stakeholders can transform heightened awareness into meaningful action that protects vulnerable individuals.

While traffickers will undoubtedly attempt to exploit the inevitable chaos surrounding a major event like the World Cup, a coordinated, multi-sector response grounded in shared intelligence, victim-centered approaches, and proactive preparation can disrupt their operations and ensure that the world’s celebration of soccer doesn’t come at the cost of human dignity and freedom.

You can find out more about听how organizations are trying to fight against human rights crimes here

Key points:

• • • USMCA at risk 鈥� Rising tariffs, political friction, and the potential 2026 review are creating uncertainty around rules of origin, market access, labor obligations, and dispute鈥憆esolution mechanisms 鈥� areas that are central to legal and tax planning.

    • Economic impact 鈥� Mexico depends on USMCA for exports, investment, and employment; and any disruption would be problematic.

    • Water as a strategic resource 鈥� The conflict over the 1944 Treaty and the new law reflect the critical importance of water usage and water rights in the bilateral agenda.

For almost 25 years before the United State-Mexico-Canada Agreement听(USMCA), it was the North American Free Trade Agreement (NAFTA) that defined the region鈥檚 economic relationship. Enacted in 1994, NAFTA removed most tariffs, encouraged foreign investment, and integrated supply chains across North America, especially in manufacturing, automotive production, and agriculture. This integration helped transform Mexico into a major export platform and contributed to North America鈥檚 emergence as a competitive economic bloc.

Over time, however, NAFTA drew criticism, particularly in the US, where concerns grew about trade imbalances, worsening labor conditions, and the agreement鈥檚 ability to address modern challenges such as . These political pressures set the stage for renegotiation and ultimately produced the USMCA, a more modern but also more politically sensitive framework.

The current chaotic environment around tariffs and trade suggests that these rules in North America may again be subject to revision. Understanding how tariffs, political dynamics, and resource鈥憆elated tensions interact is essential for organizations and corporations as they try to plan for the legal and tax implications that may arise as the 2026 review approaches.

A year of trade tensions

From the beginnings of Donald Trump鈥檚 second administration in January 2025, , marking the start of a more protectionist trade policy.

In March, some of those tariffs were exempted for products that comply with USMCA provisions. However, in December, President Trump declared that the US would allow the treaty to expire or seek to renegotiate it in 2026, alleging that Canada and Mexico have gained advantages to the detriment of US interests.

Not surprisingly, throughout 2025 and saw President Trump accuse Mexico of failing to comply with the 1944 Water Treaty, a historic agreement that regulates the distribution of water resources from the Bravo, Colorado, and Tijuana rivers. According to the US government, Mexico had not delivered the agreed-upon volumes, generating friction amid a political context already marked by trade disputes.

Mexico argued that prolonged droughts between 2020 and 2025 made compliance with the treaty difficult, affecting water availability in its own agricultural and urban regions. However, President Trump warned that if water flow to the US did not increase, he would impose a 5% tariff on Mexican exports, adding pressure to the bilateral relationship. Finally, after negotiations, an agreement was reached: Mexico must supply the remaining amount before 2030, which represents a significant challenge for the country鈥檚 water management.

In this context, the Mexican government promoted a structural reform to ensure compliance with the treaty and guarantee efficient resource management. On December 11, 2025, the and came into force the following day. This regulation establishes a new legal framework with three fundamental pillars:

• • • comprehensive state responsibility for water management;
    • exclusive powers for Conagua in the allocation, supervision, modification, and revocation of concessions; and
    • prohibition of concession transfers between private parties, preventing speculation and resource hoarding.

The law directly impacts strategic sectors such as agriculture, livestock, industry, and rural communities, as well as domestic services. Beyond its internal scope, this reform is interpreted as a mechanism to guarantee compliance with the Water Treaty, reduce the risk of trade sanctions, and strengthen Mexico鈥檚 position in future international negotiations.

Economic impacts and projections

For Mexico, the USMCA is not merely a trade agreement; it represents a strategic pillar for the country鈥檚 economic stability and sustained growth. Since its entry into the USMCA, Mexico has become a reliable partner in the North American region, guaranteeing its preferential access to two of the largest markets in the world. This advantage has driven foreign direct investment into the country, especially in sectors such as automotive, advanced manufacturing, agribusiness, and emerging technologies.

The importance of USMCA lies in the fact that . Without this legal framework, Mexico would face an adverse scenario because the imposition of significant tariffs would reduce the competitiveness of national products, increase supply chain costs, and directly affect job creation. The automotive sector, for example 鈥� and about 30% of manufacturing GDP in Q3 of 2025 alone and employs more than 1 million people 鈥� would be one of the hardest hit by the loss of these preferential conditions.

In addition, USMCA offers legal certainty for investors. Clear rules on intellectual property, digital trade, and dispute resolution reduce risks and encourage the arrival of foreign capital. Without this treaty, Mexico could experience an outflow of investments to other countries with more stable agreements, which would negatively impact job creation and projected economic growth.

The coming USMCA review

The possible renegotiation of USMCA, scheduled for later this year, generates uncertainty. This review process presents several possible paths for Mexico, each with distinct economic, political, and diplomatic implications. If the USMCA is successfully extended without substantial modifications, Mexico would preserve its preferential access to the US and Canadian markets, maintaining the commercial stability that supports most of its exports. This continuity would reinforce investor confidence, support job creation and stabilize diplomatic relations.

However, if no agreement is reached to extend the treaty, this absence of clarity would create uncertainty for businesses operating throughout North America. Investment decisions could be delayed, expansion plans postponed, and operating costs could rise due to increased scrutiny and customs enforcement. Further, diplomatic tensions could begin again, particularly if unilateral measures such as large tariffs are threatened again. In this environment, Mexico would need to adopt a cautious strategy focused on strengthening legal frameworks and offering targeted economic incentives to maintain its own competitiveness.

Another scenario in which the parties fail to reach consensus would activate the formal pathway toward the treaty鈥檚 expiration in 2030. While trade flows would continue in the short term, markets would begin adjusting to the anticipated end of the USMCA. This expectation could trigger a gradual relocation of investments and restructuring of supply chains, particularly in industries heavily integrated with US production networks, such as automotive manufacturing and advanced industrial sectors. Pressure on the peso, slower GDP growth, rising import costs, and early job losses would likely follow; and even if diplomatic efforts emerge to prevent severe disruption, the economic effects for Mexico would become progressively more adverse.

However, the most severe scenario involves one country withdrawing from the USMCA, which would cause the agreement to collapse for all three members. For example, if the US were to withdraw, Mexico would immediately face World Trade Organization tariffs, dramatically increasing export costs for manufactured goods and agricultural products and severely disrupting supply chains.

Clearly, any of these scenarios highlight how critical this year will be for Mexico. While a successful extension of the USMCA would support stability, attract investment, and sustain long鈥憈erm growth, a failure to reach agreements 鈥� or the withdrawal of a partner country 鈥� could reshape Mexico鈥檚 economic landscape for years to come.

You can find out more about the challenges facing Mexico on several different fronts here

Important highlights:

• • Technology-enhanced tools needed 鈥� Key recommendations in the fight against these disappearances include establishing a national database for Indigenous disappearances, using facial recognition technology to match missing persons with sex ads, and leveraging data analysis to identify patterns.

  • Disproportionate impact driven by systemic factors 鈥� Though Indigenous peoples are about 5% of Canada鈥檚 population, about half of women and girls trafficked are Indigenous.

  • Geographic patterns and cross鈥慴order links 鈥� Urban hotspots show concentrated disappearances and trafficking activity, with evidence of connections between Canadian and US sex ads.

The crisis of missing and murdered Indigenous women in Canada represents an urgent human rights concern, with Indigenous women disproportionately affected by violence and exploitation. This issue, often obscured by geographical and societal barriers, demands the attention and action of governments and law enforcement.

Research completed by 成人VR视频 in late-July illuminates the alarming intersection between missing and murdered Indigenous women and human trafficking. These insights are captured in a report titled Missing and Stolen: Disappearance and Trafficking of Indigenous Peoples in Canada. Findings in the report shed light on the systemic factors that contribute to these tragedies, and the report offers actionable recommendations to address and prevent further injustices against potential victims in Canada.

Examining disappearances and trafficking activities

Missing and murdered Indigenous women and girls are overrepresented in cases of violence and trafficking, the report shows. Indigenous peoples (First Nations, Inuit, and Metis) comprise roughly 5% of Canada鈥檚 total population; but despite this low figure, the 2014 National Task Force on Sex Trafficking of Women and Girls in Canada found that 51% of women and 50% of girls .

Systemic factors also contribute to the crisis of these victims, including a history of sexual abuse. Other adverse childhood experiences such as are disproportionately prevalent among Indigenous communities in Canada. These previous childhood abuse experiences contribute to the heightened vulnerability to gender-based violence, sexual exploitation, and human trafficking into adulthood.

Further, these systemic issues are compounded by previous experience with the child welfare system, which continues to disrupt Indigenous family structures. Although represent only about 8% of the population under the age of 15, they accounted for nearly as of 2021. Research also shows that many survivors of sexual exploitation and trafficking have prior involvement with the .

Sex ads points to cross-border activity

By analyzing data from reported Indigenous disappearances and sex ads, the study identified urban areas as hotspots in which these issues are most prevalent. Notably, cities such as Vancouver, Edmonton, and the Windsor-Toronto-Ottawa corridor, emerge as key centers of disappearances and trafficking. Edmonton also is a point of interest because of its high Indigenous population but relatively remote nature in comparison to other hotspots.

Additionally, the study highlights the cross-border nature of trafficking, with connections between Canadian sex ads and those in the United States. This tracks with the general population demographics of Canada, in which much of the population lives within driving distance of the US border. However, when examining some of the ads in urban areas along the border, many involved cross-border connections.

Recommended actions

To address the crisis of missing and murdered Indigenous women and human trafficking, several key actions are recommended for government agencies and law enforcement, including:

Consolidate reporting into a central repository 鈥� Establishing a national database for Indigenous disappearances is crucial for improving the speed and effectiveness of investigations.

Use advanced technology and data analysis 鈥� Likewise, using advanced technology to integrate and analyze data on missing and murdered Indigenous women and comparing that with sex ad data using facial recognition technology could help to quickly identify and locate missing individuals featured in sex ads. In addition, technology could be used in identifying potential victims in sex ads by homing in on specific terms that are used in ads, although this is tricky. Indeed, ads may falsely state ethnicity due to prejudices against Indigenous peoples, and some ads mislabel individuals to avoid devaluation or risk. At the same time, some ads used derogatory terms and specific tribal affiliations associated with the demand from sex buyers.

Put a face on the data 鈥� It is easy to see how the stories of these women and girls get lost as a data point. This is why it is important to amplify the stories of survivors and build awareness of the problem. Behind each data point is a person and family鈥檚 heartbreak, pain, and loss 鈥� those stories should be emphasized and disseminated.

Prioritize investigative resources in known epicenters and across borders 鈥� Investigations should focus on hotspots in which significant patterns of disappearances and sex trafficking have been identified.

Addressing the crisis of missing and murdered Indigenous women and sex trafficking is of paramount importance. Policymakers, communities, and individuals must unite to support these recommend actions to help ensure that every effort is made to prevent future tragedies and uphold the rights and dignity of Indigenous peoples.

You can find more about the ongoing fight against sex trafficking here

Key insights:

• • The North American economic bloc facing significant challenges 鈥� Due to escalating trade tensions and policy uncertainties, the trading bloc comprised of the US, Canada, and Mexico is currently facing significant challenges that have the potential to undermine economic growth and stability across the region.

  • Customized trading strategies needed 鈥� Given each country鈥檚 unique economic outlook, policymakers will need to work on tailored strategies to address each nation鈥檚 specific issues.

  • Communication & collaboration are key 鈥� The future of North American economic cooperation hinges on sustained dialogue and cooperation among the member countries. For continued and shared economic prosperity in the region, the three nations must work together.

For many years, the North American economic landscape has been defined by robust collaboration among the United States, Canada, and Mexico. Policymakers strategically leveraged the region’s unique geographical advantages and opportunities to foster prosperity, leading to the creation of one of the world’s most powerful trading blocs. After the North American Free Trade Agreement (NAFTA) was supplanted by the United States-Mexico-Canada Agreement (USMCA) in 2020, it became the world’s , with the combined imports among the three nations amounting to .

Despite this success, the bloc鈥檚 partnership is now precarious. Escalating trade tensions now pose considerable challenges not only for the three participating nations but for the global economy as a whole now and in the future.

The United States

The Trump administration activities around tariffsand ensuing policy uncertainty has led to significant concerns among businesses throughout North America. These concerns are expected to , while consumer spending may also decelerate due to higher unemployment and persistent inflation.

In fact, economists foresee weaker growth in the US economy. Even though real US GDP grew 2.8% in 2024, shows that it may decelerate to 1.8% in 2025. According to the IMF, unemployment will stand at 4.2% this year, further signaling a soft labor market.

Tariffs also will result in price increases for consumers on imported goods, likely leading to additional pressure on overall price levels. Indeed, consumer prices rose 2.7% in June compared to the previous year, potentially indicating the beginning effects of Trump鈥檚 tariff policy on inflation.

This likely will contribute to inflation remaining persistent, with estimates 听throughout 2025 of 3.0%, one percentage point above the Fed鈥檚 2.0% target. At the same time, retaliatory tariffs from other countries are expected to lessen demand for US exports. In addition to trade and policy instability, Trump鈥檚 immigration agenda could continue to impact various sectors of the economy, such as construction and agriculture, where labor supply and demand may be affected.

In this environment, a slowing US economy is likely to lead to reduced tax collection, subsequently decreasing government revenue even further. An increase in government debt is anticipated, with general government gross debt as a percentage of GDP projected to rise to 122.5% in 2025.

As for 2026, real GDP growth is expected to slow further to 1.7%. Economists also project that inflation will continue to ease, reaching 2.5%, while unemployment is likely to remain stable at 4.2%. Although these figures suggest a relatively steady outlook, there are more notable downside risks than upside ones. Persistent, or even worse, increasing trade, policy, and geopolitical uncertainties could undermine economic performance and threaten the country鈥檚 stability.

Canada

In 2024, Canada鈥檚 , with real GDP increasing by 1.5%; however, the country鈥檚 economic outlook for 2025 has weakened. Rising trade tensions with the US have contributed to a deterioration in both business and consumer sentiment, while policy uncertainty has increased. As a result, the growing 1.4%, and the unemployment rate rising to 6.6% in 2025.

Unlike the two other countries in the region, inflation in Canada is expected to ease to its 2% target in 2025. However, the Bank of Canada will likely face a challenging environment in the coming months, as upward pressure from higher import prices due to tariffs and downward pressure from falling demand could infringe upon price stability.

Looking ahead, economists project a modest recovery in macroeconomic conditions for Canada in 2026. With projected real GDP growth of 1.6%, inflation at 2.1%, and unemployment at 6.5%, the economy is expected to demonstrate enhanced resilience.

Further, the Organisation for Economic Co-operation and Development (OECD) made some recommendations for the Canadian economy to help it weather these uncertain times, including seeking diversification of trading partners, strengthening innovation to boost productivity and competition, and increasing government investment in infrastructure.

Mexico

As of the midway point of 2025, Mexico鈥檚 economy is facing a challenging outlook. In 2024, the country’s real GDP grew by 1.5%; however, , with an anticipated contraction of 0.3%. to weakened exports resulting from tariffs, as well as restrained public consumption and investment.

The IMF鈥檚 forecasts also suggest that private consumption may be supported by moderate unemployment (3.8%) and declining inflation (3.5%) in 2025. Still, while unemployment is anticipated to remain at relatively low levels, this figure represents an increase from last year鈥檚 level. Also, while investment is aided by lower interest rates it is expected to recover only gradually amid persistent concerns that include geopolitical tensions and domestic uncertainty from policy changes and reforms.

Further out, a recovery for the Mexican economy is anticipated in 2026, with real GDP projected to grow by 1.4% after the previous year鈥檚 contraction. The labor market is forecasted to hold stable, with the unemployment rate standing at 3.8% in the same period. However, inflation is likely to persist at 3.2%, remaining above its target level.

The OECD has outlined several recommendations for Mexico as well, including improving property tax collection and digitalizing tax administration to grow government revenue. Conducting cost-benefit analyses could improve the efficiency of public spending; and creating regulations that encourage private investment in renewable energy could allow the country to leverage its natural resources and gain competitive advantage.

The future of the North America trading bloc

The economic performance of North America in 2025 is increasingly clouded by rising policy uncertainty and commercial tensions between the three member countries. is projected to slow to 1.6% in 2025 鈥� a percentage point lower than in 2024 鈥� as each country contends with unique challenges and the broader consequences of escalating trade disputes.

The imposition of new tariffs by the Trump administration has reverberated across the North American region, straining longstanding trade relationships and introducing additional volatility for businesses and individuals. These developments risk undermining the progress achieved under trade agreements such as NAFTA and its successor, the USMCA, which were designed to foster regional integration and collective growth. With the coming renegotiation of the USMCA in July 2026, the future of North American economic cooperation hangs in the balance.

By 2026, for the entire North American region. However, this outlook is contingent upon the resolution of the ongoing tariff disputes and successful renegotiation of the USMCA. Achieving agreements that address the United States鈥� trade deficit with each respective country remains a key priority for President Trump, as does advancing other significant agenda items, such as enhancing collaboration on immigration 鈥� particularly along the US/Mexican border 鈥� and increasing efforts to combat drug cartels in Mexico.

While it is very hard to predict what will happen in the coming months (let alone the next year) for North America, what is certain is that sustained dialogue and cooperation among the three countries will be essential to preserving the benefits of regional integration, restoring investor confidence, and promoting shared prosperity in the months and years ahead.

For more on the current trading environment, check out the 成人VR视频 Institute鈥檚听2025 Tariff Survey here

In addition, government action around making companies accountable for improving human rights has been increasing over the last decade with laws passed in and and with separate legislation undertaken in and . Now, Canada enters the arena 鈥� with its , commonly referred to as the Modern Slavery Act (MSA) 鈥� which came into force on January 1.

The MSA implements Canada鈥檚 international commitment to reduce the use of forced labor and child labor in foreign and domestic supply chains by increasing the transparency around these areas for certain organizations. To do this, the MSA imposes public reporting obligations on a broad range of entities, including government institutions, domestic companies, and many foreign companies that do business or own assets in Canada. These reporting obligations include filing annual public reports on measures taken by covered entities to identify, address, and prevent both forced labor and child labor in their supply chains.

How to comply

The first step that affected organizations need to take in order to comply with Canada鈥檚 MSA law is to determine what, if any, reporting requirements to which an organization may be subject. The law requires government institutions and entities that meet certain criteria to meet these reporting requirements.

The next step is determining if an organization must submit an annual report. For government institutions, organizational leaders should determine if the institution produces, purchases, or distributes goods in Canada or elsewhere. For other entities, it is important to determine if the entity produces, sells, or distributes goods in Canada or elsewhere; imports into Canada goods that are produced outside Canada; or controls an entity that engages in any of these activities.

New reporting obligations include filing annual public reports on measures taken by covered entities to identify, address, and prevent both forced labor and child labor in their supply chains.

Additional actions to ensure compliance are focused on understanding what needs to be reported and ensuring that the report created for compliance is complete. For government institutions, their compliance professionals should detail the steps taken during the previous financial year to prevent and reduce the risk that the use of forced labor or child labor was used at any step of the process of goods produced, purchased, or distributed by the institution. For other entities, compliance professionals should outline the measures implemented in the past fiscal year to mitigate and diminish the risk of employing forced or child labor at any step of the production of goods in Canada or elsewhere or of goods imported into Canada by the entity.

The final step involves ensuring the annual report is approved according to the law鈥檚 requirements. If a report covers a single entity, compliance professionals need to ensure it is approved by the entity’s governing body. If an organization chooses to file a joint report on behalf of several entities 鈥� for example, a parent company can file one report on behalf of all its subsidiaries that are subject to the reporting requirements 鈥� then compliance professionals need to ensure that the report is approved by either the governing body of each entity included in the report or the governing body of the parent company that controls each entity included in the report.

Recommended actions for organizational readiness

Creating a cross-functional team with representatives from procurement, legal, finance, and internal audit is a critical action to ensure compliance. Because compliance with the law involves third-party suppliers and intermediaries, a due diligence risk assessment also is necessary to identify and report on the areas of risk.

Updating or creating an organization’s policies 鈥� such as its human rights policies, corporate codes of conduct, and supplier codes of conduct and procedures 鈥� are critical to outlining roles and responsibilities for ongoing compliance. The procedures should include how to investigate any concerns that are identified.

Additional essential measures should include:

• • • Training all employees on the issues of forced labor and child labor and ensure that training for the board of directors and those employees with oversight or responsibility for supply chain logistics specifically covers the MSA and its reporting requirements.
    • Reviewing and revising supply chain contracts to proactively examine and adapt the organization’s supply chain contracts to ensure they include prohibitions on the use of forced labor and child labor and require compliance with the organization’s relevant policies and procedures.
    • Ongoing assessment of effectiveness by developing and implementing key performance indicators to measure and assess year-over-year effectiveness in ensuring that forced labor and child labor are not being used in the organization’s business and supply chains.

Demand by shareholders and other stakeholders for corporate certification that no human rights abuses occur within an organization鈥檚 operations and supply chain is only growing. The compliance functions within institutions and organizations should be making efforts now to clean up supply chains 鈥� government legislative action on this issue will only increase over the next several years.

For more on MSA reporting obligations for affected organizations, [subscription required] provides suggested best practices and steps that organizations should consider to ensure they meet these obligations.

To examine this further, the 成人VR视频 Institute and the Canadian Bar Association have released the inaugural State of the Canadian Law Firm Market and Canadian Government Lawyers Benchmark reports. These two reports 鈥� offered in English and French 鈥� provide critical insights into how law firms and government lawyers in Canada assess and measure their success, goals, risks, and challenges in today鈥檚 legal landscape.

The 2024 State of the Canadian Law Firm Market shows that Canadian lawyers generally view their law firms as successful, indicating a strong acknowledgement of the professionalism, dedication, innovation, and resilience of law firms in Canada given the multitude of changes of the past several years. Indeed, rather than holding firms back, those very characteristics that helped law firms weather the past few years will continue to be a factor as firms move forward into a still-uncertain legal environment.

As the report shows, Canadian law firms have seen a strong post-pandemic recovery, albeit one that has been accompanied by rising competition for talent, among other challenges.

Further, in one critical finding, the report describes how law firms鈥� definitions of success do not always align with how they are measuring or planning for such success, presenting both opportunities and challenges for today鈥檚 law firm leadership.

You can access the 鈥�2024 State of the Canadian Law Firm Market鈥� and .

The 2024 Canadian Government Lawyers Benchmark Report describes how lawyers within the Canadian government generally view their organizations as successful but not without many challenges that will have to be confronted in the future. While government lawyers say that steps have been taken to address many of the challenges related to the shifts in ways of working that have arisen over the past few years, they point out that other, perhaps more pervasive problems remain.

The very characteristics that helped law firms and government lawyers weather the past few years will continue to be a factor as they move forward into a still-uncertain legal environment.

Indeed, confronting these challenges will be the work of the next few years as government lawyers try to balance completing their work, meeting their budgets, and protecting their work/life balance and own mental health 鈥� all as technological advancements like generative artificial intelligence (Gen AI) might well dramatically change how legal work is done within the government (and elsewhere).

This report also shows that pandemic-related disruptions dramatically changed how and where government legal work is conducted, how colleagues interact with each other, and much more. Even as the challenges of the pandemic continue to recede, government agencies are still having to adjust, seeking the proper balance of return-to-office strategies with remote and hybrid working arrangements.

You can access the 鈥�2024 Canadian Government Lawyers Benchmark Report鈥� and .

But now, as newer and more complex regulations are flooding the market, and critical challenges 鈥� such as environmental, social & governance (ESG) issues or cybersecurity concerns 鈥� that had largely been hidden by more pressing matters beforehand emerge as major challenges, the corporate law departments of many Canadian companies are taking action. Many have shifted their mindset and their approach to managing how their needed legal work gets done and what they鈥檙e willing to pay for it.

To examine this more carefully, the 成人VR视频 Institute has published the 2023 Canadian Legal Market Update, which highlights the results of a survey of corporate law department leaders in Canada that sought to gain their perspective on key issues such as growth strategies, client relationship development, strategic investments, and performance management. (The report was taken from the results of 272 interviews with Canada-based respondents within the corporate in-house legal community in various legal roles within their companies, which were conducted among multiple different industries. These interviews were conducted throughout 2022.)

Our survey shows that many Canadian corporate law departments have shifted their mindset and their approach to managing how their needed legal work gets done and what they鈥檙e willing to pay for it.

Not surprisingly, this year鈥檚 report identified certain key developments that are now reshaping many aspects of the Canadian legal market, including:

An aggressive focus on risk 鈥� Since 2020, the percentage of Canadian corporate law departments talking about more aggressively preventing and mitigating risk for their companies has nearly doubled, the survey shows.

Hiring and retaining talent has become paramount 鈥� Talent in the legal industry became a flash point in 2021 鈥� not only in Canada but everywhere 鈥� and more Canadian corporate law departments have made investing in talent a top strategic priority for 2023.

Requiring business savvy from their legal providers 鈥� While the attributes that Canadian corporate law departments look for in their external legal providers are similar to those sought by other corporate law departments around the world, business savvy 鈥� how well a law firm understands the client company鈥檚 goals and can offer advice that is practical and proactive in nature 鈥� is an attribute upon which Canadian corporate law departments place even more emphasis.

Indeed, the report offers some crucial insight into the minds of Canadian law department leaders, providing other parties 鈥� such as their external law firms 鈥� with a road map on what exactly these clients are looking for in their outside counsel.

鈥淚 like law firms that are practical, give me timely advice, and give me very commercial advice,鈥� said one corporate law department leader in Canada. 鈥淪o, if a law firm gives me a 20-minute rendition of the law and all the risks and everything, but doesn鈥檛 really give me a good answer, I鈥檓 not really interested in them. If you give me really practical advice that鈥檚 commercial that鈥檚 timely 鈥� that鈥檚 why I like you.鈥�

All legal organizations in Canada should take note, as this report shows the attitudes, priorities, and mindset among Canadian companies鈥� law departments are shifting toward more aggressive risk mitigation, managing critical talent issues, and seeking more valued outside counsel.

You can download a full copy of the 成人VR视频 Institute鈥檚 2023 Canadian Legal Market Update here, by filling out the form below: