To President Donald Trump, America's trade relationship with Mexico was intolerable. He seethed over the U.S. trade deficit and the shuttered factories in America's heartland. 'No longer,'' he vowed six years ago, 'are we going to allow other countries...
WASHINGTON — To President Donald Trump, America’s trade relationship with Mexico was intolerable. He seethed over the U.S. trade deficit and the shuttered factories in America’s heartland. “No longer,’’ he vowed six years ago, “are we going to allow other countries to break the rules, to steal our jobs and drain our wealth.”
Yet while the the deal’s overall impact has been slight, it has nevertheless been helping workers on the ground. It’s just that the beneficiaries have so far been mostly in Mexico. Novel provisions of the pact have enhanced the ability of long-exploited Mexican workers to form unions and secure better wages and working conditions.
The former president also predicted that exports of U.S. auto parts to Mexico would rise by $23 billion. They have increased since 2020 - but only by about $8 billion. Also complicating any effort to calculate the USMCA’s impact is President Joe Biden’s own aggressive efforts to rejuvenate American industry with trillions of dollars in infrastructure spending and subsidies.
Perhaps the most consequential changes the pact wrought were designed to reverse one of NAFTA’s unhappy byproducts for Americans: The old deal incentivized companies to close factories in the United States, ship production to lower-wage Mexico, then export goods back into the United States - duty free.
Even after the auto rules took effect, the United States was slapped down for the way it tried to enforce them. A USMCA trade court, in a case brought by Mexico and Canada, found that Washington was applying the rules more strictly than was allowed. So far, the United States has used the mechanism 11 times to demand corrections of labor law violations. Mexico has so far cooperated, by sending law enforcement and labor inspectors to guard ballot boxes in new votes that independent unions have mostly won.
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