At the World Economic Forum in Davos this year, Canadian Prime Minister Mark Carney didn’t mince words about the future of U.S.-Canada trade.

“Let me be direct,” said Carney. “We are in the midst of a rupture, not a transition. Our old relationship with the United States—a relationship based on steadily increasing integration—is over.”

Over the past two decades, Carney added, crises across finance, health, energy, and geopolitics have exposed the risks of extreme global integration. More recently, those risks have taken on a sharper edge. “Great powers are now using economic integration as a weapon—tariffs as leverage, financial systems as coercion, and supply chains as vulnerabilities to be exploited.”

As if cross-border transportation in North America weren’t already complex enough, recent legal and policy developments have added another layer of uncertainty. A landmark Supreme Court ruling in February sidelined key elements of the Trump administration’s original tariff framework, contributing to an evolving patchwork of rules that continues to shift.

The result: a more opaque and unpredictable environment for U.S.-Mexico-Canada trade.

Even the mechanics of tariff refunds remain unclear. As importer of record, FedEx is obligated to pass along any refunds to customers who shared in those costs—but how and when that happens is far from settled.

“Who actually gets paid back—and through what process—will have to be worked out contract by contract,” says Geoffrey Gertz, senior fellow at the Center for a New American Security. “And it will likely involve a lot of billable hours.”

At a time when diplomatic relations with key trading partners are under strain, the question for shippers is no longer just how to move freight across borders—but how to operate in an increasingly uncertain and fragmented trade environment.

World’s largest trading partners in a spat

Canada and the United States maintain one of the world’s largest trading relationships. Canada remains the largest buyer of U.S. exports and the second-largest source of imports behind China, according to the U.S. Trade Representative.

But where the relationship goes from here remains unclear.

One recent flashpoint: a rule enacted last November placing a 25% tariff on medium- and heavy-duty trucks imported into the United States. The policy applies broadly across vehicle categories, including delivery trucks, transit buses, and tractor-trailers.

There are exceptions. Vehicles and parts that meet United States-Mexico-Canada Agreement (USMCA) requirements are exempt, with tariffs applying only to non-U.S. content value.

To offset the impact, the Trump administration introduced a manufacturing incentive providing a tariff credit equal to 3.75% of the aggregate value of U.S.-assembled trucks from 2025 through 2030.

For carriers, however, the net effect is clear: higher costs. Analysts estimate the price of a new Class 8 tractor could reach roughly $212,000—and closer to $238,000 when combined with the 12% federal excise tax.

The international response has been swift. Mexico’s Economy Ministry has argued that the tariff conflicts with USMCA provisions and has signaled plans to pursue adjustments tied to U.S. content levels in Mexico-built vehicles.

All of this comes as the U.S., Mexico, and Canada begin the formal review process for USMCA, scheduled to conclude July 1, 2026. The U.S. Trade Representative has requested public input on how the agreement can be strengthened to enhance North American competitiveness.

Early discussions between U.S. Trade Representative Jamieson Greer and Mexico’s Economy Secretary Marcelo Ebrard have focused on supply chains, rules of origin, and trade dependencies. Talks with Canada are moving on a different track, with officials expressing cautious optimism about targeted updates rather than a full renegotiation.

Meanwhile, industry groups—from retail and consumer goods to automotive and apparel—are urging policymakers to maintain duty-free treatment for compliant goods and preserve trilateral cooperation.

“Canada and Mexico are huge markets for American consumer packaged goods,” says Tom Madrecki, vice president of supply chain at the Consumer Brands Association. “Maintaining duty-free trade under USMCA is critical to continued growth.”

How to work cross-border fine print

The first thing cross-border shippers in and out of Mexico must realize is solving the historical challenge stemming from the operational imbalance in terms of volumes from a north-south perspective.

Basically, what one should remember is there are three loads north for every one load south. “That imbalance causes waste,” says Frank Bateman, Ryder System vice president of supply chain solutions. “In many cases, you have to dead-head south and that causes waste.”

The complexity doesn’t stop there. Cross-border shipments often involve multiple parties across both countries—from carriers and customs brokers to drayage providers and distribution centers.

“That’s a lot of moving parts,” Bateman says. “As a 3PL, our job is to ensure visibility across all of them. Getting everything in sync is critical because the margin for error has really shrunk.”

Ryder managed more than 280,000 cross-border moves last year, a 10% increase. But success at the border, Bateman emphasizes, isn’t about speed alone. “It’s about coordination and discipline.”

To manage that complexity, Ryder uses value stream mapping to define responsibilities, streamline communication, and ensure alignment across stakeholders. In many cases, the flow of information is just as critical as the movement of freight.

“The first requirement is discipline,” Bateman says. “Customs documentation isn’t optional. There’s no margin for error. If processes break down, you’re dealing with delays—or worse, cargo seizures.” In short, cross-border freight rarely fails in transit. It fails in planning, paperwork, and execution.

Bateman also stresses the importance of programs like Customs-Trade Partnership Against Terrorism (CTPAT), which helps trusted shippers improve security while accelerating clearance.

“Joining CTPAT is essential,” says Bateman. “And you need redundancy—enough equipment and resources at the border to handle disruptions when they happen.”

Closings at the border

Late last year, Laredo, Texas-based Texas International Enterprises—a major cross-border carrier—filed for Chapter 11 bankruptcy, laying off 600 drivers.

The company reported up to $50 million in liabilities, more than 200 creditors, and no funds for unsecured claims. After logging 39 million miles in 2024, it was suddenly gone.

The location matters. Laredo is one of the most critical gateways for U.S.-Mexico trade. When operations falter there, the implications ripple across the entire supply chain. “A trucking company shutting down in Laredo at this point in the year should be setting off serious warning signals,” one driver said.

Across the market, drivers report similar trends: fewer trucks on the road, faster loading times, and weaker seasonal demand. For many smaller operators—particularly owner-operators—those pressures are becoming increasingly difficult to absorb.

At the same time, consolidation continues, with larger carriers and private equity-backed firms gaining share. Layered onto that is a broader geopolitical shift. Both Mexico and Canada are exploring new trade partnerships, signaling a willingness to diversify beyond traditional U.S.-centric relationships.

“We understand that this rupture calls for more than adaptation,” Carney said in Davos. “It calls for honesty about the world as it is. The old order is not coming back—and nostalgia is not a strategy.”