Renew the USMCA, Drop Tariffs, and Bring Down Consumer Costs
WASHINGTON, D.C. — As the U.S., Mexico, and Canada prepare for a mandatory review of the USMCA trade agreement on July 1 (tomorrow), the Consumer Choice Center (CCC) urges the Trump administration to pursue renewal—rather than termination or further tariff escalation. Both paths are economically destructive, particularly for states that went for Donald Trump in 2024, where consumers and workers will both face higher costs with robust North American trade.
President Trump has been ambiguous on whether he supports USMCA renewal, saying recently, “I would rather not have the agreement, but I may sign it.” In addition, the administration has found workarounds (Section 232) to impose 50 percent tariffs on Canadian steel, aluminum, and copper, plus 25 percent tariffs on non-US content of USMCA-compliant automobiles.
“Ending or undermining the USMCA doesn’t strengthen American negotiating power,” said DAVID CLEMENT, policy director for the Consumer Choice Center. “It generates more uncertainty, which leads to less investment and fewer American exports flowing to its neighbors.”
A new policy paper by the CCC shows how tariffs have inflated the cost of living for everyday Americans, particularly in housing and at the grocery store, as a result of tariffs on steel, aluminum, and copper.
“The only thing worse for consumer costs than tariffs is the unpredictability around their implementation, and uncertainty around the future of the USMCA. Canada will almost certainly push for tariff relief in renewing the agreement, and I hope American trade representatives keep in mind that the majority of U.S. exports go out under the USMCA. It’s a huge benefit to American workers,” added Clement.
States that voted for President Trump—Michigan, North Dakota, Iowa, Arizona—depend on USMCA access for a quarter to nearly 90 percent of their exports. Retaliatory tariffs from Canada and Mexico in response to the deal’s termination wouldn’t punish foreign governments; they’d hit American farmers, manufacturers, and middle-class consumers.
Michigan exported 65 percent of its goods to Canada and Mexico last year. North Dakota shipped 90 percent of its goods to Canada and Mexico last year. Iowa exported close to 50 percent within the USMCA, and Arizona around 40 percent.
“Exemptions for Canada and Mexico are the best way for the White House to push consumer prices downward, as well as more targeted solutions that avoid blanket tariffs. President Trump’s team needs to keep its eye on the prize, which is a better and stronger USMCA, not a break from its closest neighbors and trading partners,” Clement concluded.