The U.S. Mexico Canada Agreement or USMCA still needs to be ratified by Congress. A new report from Purdue University (link) says the deal could have a big impact on U.S. farm exports.
Experts predict the new agreement could lead to a $454 million increase in U.S. ag exports to Canada and Mexico, especially in dairy and poultry. However, when you factor in the steel and aluminum tariffs imposed by the U.S. and resulting retaliatory tariffs by Canada and Mexico, there would be a loss of $1.8 billion.
Wallace Tyner, an Agriculture Economics Professor at Purdue says seeing tariffs lifted is up to us.
"I think unless the U.S. removes our tariffs on steel and aluminum, Canada, Mexico and other countries like China and Europe are going to keep their retaliatory tariffs in place," says Tyner. "The retaliatory tariffs are there because we put tariffs on steel and aluminum in the first place and so getting those retaliatory tariffs taken off requires action on our part."
Canada, China and Mexico combined account for about 44% of U.S. agricultural exports. That equals about $63 billion from 2013 to 2015. The report says if Congress rejects the USMCA and President Trump pulls out of the old NAFTA plan ag exports would drop $9.4 billion.