Looking ahead to 2025, many economic experts are predicting scenarios that could have a strong impact on production within the USMCA, whose political landscape is set to undergo a significant realignment. In the US, a victory for the Republican Party could herald a victory for their conservatives in Canada.

Immigration policy in North America is set to become more rigid and restrictive. In Canada, immigration policy has been tightened due to a growing public perception that immigration contributes to housing and health care shortages. This shift could become more pronounced under the Conservatives. In the United States, the administration could adopt tougher measures, proposing mass deportations of illegal immigrants, stricter migration routes, and increased border security.

Energy policies focused on fossil fuels will foster cooperation between the United States and Canada, but they will also introduce elements of competition. The realignment of energy policies could increase Canada's energy exports to the United States, given the latter's dependence on Canadian heavy crude for Gulf refineries. On the other hand, the new government's plan to increase U.S. energy production could squeeze Canada's market share in the United States and globally.

Many of the most important provisions of the U.S. tax code are set to expire at the end of the year . If they aren’t extended, tax rates and deductions could revert to 2017 levels, experts say. The key measure set to expire is the individual marginal tax rate, which has remained at 37 percent since 2018 under the Tax Cuts and Jobs Act (TCJA) , one of the most notable accomplishments of the first Trump administration. 

In the absence of new legislation, the top marginal tax rate will return to 39.6%. The new administration has promised to make all of the TCJA measures permanent. With unified Republican control of Congress, it is likely to win approval for some, if not all, of the additional tax cuts promised. However, these measures may provide only a modest boost to GDP growth.

The sustainability of the US fiscal position is therefore likely to come under scrutiny. The new administration has not yet outlined any definitive measures to increase fiscal revenue or cut spending to finance the TCJA extension. Deregulation may produce some spending reductions, but Social Security, pensions, and defense budgets are set to be protected.