The United States trades $1.9 trillion a year — $5 billion a day — worth of goods and services with its neighbors, Canada and Mexico. They have supplanted China to become America's top two trading partners.
The U.S. is making demands that could effectively force Canada and Mexico to surrender some automaking production to the United States. That might bring more auto factory jobs to the United States. But it would also upend established supply chains and would push up U.S. prices for new cars that now average nearly $50,000 at a time when American consumers are already frustrated about the high cost of living.
Trump, characteristically, has added to the tension by threatening to pull out of his own agreement altogether.
In 2020, the USMCA replaced the 1994 North American Free Trade Agreement, which tore down most trade barriers between the three North American countries.
Trump and other critics had called NAFTA a job killer because it encouraged U.S. companies to move factories south of the border to take advantage of low-wage Mexican labor, then ship goods back to the United States duty free.
