PPI’s Ed Gresser, Vice President and Director for Trade and Global Markets, put out his trade fact of the week on Wednesday. He examines the top export markets for U.S. states in 2023 as we prepare for the second Trump administration amid threats of 25% import tariffs on Canadian and Mexican goods.
Among big powers, the U.S. is unusually fortunate in having friendly and peaceful relationships with its two large neighbors. These involve deep and complex economic ties, which often raise policy problems and challenges but, in general, serve all three countries well. Replacement of the earlier North American Free Trade Agreement with the “USMCA” in 2020 has had mixed results — some useful innovations, also some things that seem to be working less well and may have been over-negotiated. If the agreement is still there next year, its scheduled review in 2026 might help fix some of the problems. Abandoning it to provoke an economic shock and pick fights with neighbors and allies, though, is much more likely to inflame than ease border problems – and generally seems unsound and a bad idea. Again, it isn’t clear how serious this really was. But just in case, and moving from unwise national policy to its possible personal impacts: make the down-payment this month if you’re buying a car or refrigerator, and with heating and gas as well as food prices maybe about to jump, take some time in mid-January to fill your tank and stock up on groceries.