ITC Says USMCA Will Boost North American Trade, But Will The Deal Be Ratified?
The U.S. International Trade Commission released its analysis of the expected impact the United States Mexico Canada Agreement (USMCA) would have on the U.S. economy.
The commission predicts the trade deal will expand U.S. gross domestic product by 0.35 percent and add 176,000 jobs, including 28,000 in the automobile sector. The commission said the deal also would likely have a positive impact on U.S. trade. U.S. exports to Canada and Mexico would increase by $19.1 billion (5.9 percent) and $14.2 billion (6.7 percent), respectively. U.S. imports from Canada and Mexico would increase by $19.1 billion (4.8 percent) and $12.4 billion (3.8 percent), respectively.
The ITC explained, “The agreement would likely have a positive impact on all broad industry sectors within the U.S. economy” with manufacturing experiencing :the largest percentage gains in output, exports, wages, and employment …” Chapter three of the report discusses the impact the USMCA will have on the metals industry.
As Connecting the Dots has reported previously, approval of the USMCA in the U.S. Congress and Canadian Parliament might hinge on President Donald Trump’s willingness to repeal the Section 232 tariffs he imposed last year on Canadian and Mexican steel and aluminum products. According to a Politico report last week, a senior Trump administration official is optimistic that will happen. An unnamed adviser to the president said, “We’ve got to get to a situation where we have a sensible solution to this issue. I think we’re in active discussions to do so, and I think we’ll ultimately get there.”
Meanwhile, while Canadian Minister of Foreign Affairs Chrystia Freeland said she and her colleagues are considering additional retaliatory tariffs on U.S. products, the CBC reported Canada’s Department of Finance “quietly” announced that it would exempt another $110 million in products from its list of retaliatory tariffs. The updated list of exempted products is available here.
Also last week: in a meeting last Friday with U.S. Commerce Secretary Wilbur Ross, Mexican Secretary of the Economy Graciela Marquez Colin also reiterated his country’s wish that the United States end its Section 232 penalties on its North American trading partners.
Stay tuned to Connecting the Dots as the three countries continue to move forward on how to resolve the USMCA and the Section 232 penalties.