Over the past 18 months, we have seen a marked shift in U.S. trade policy. Soon after taking office, President Donald Trump made good on his campaign promise and announced that the U.S. would seek to renegotiate the North American Free Trade Agreement (NAFTA), a multilateral agreement with Canada and Mexico that was put into effect in 1994. In more recent months–amid reports that NAFTA talks have grown contentious and that the U.S. is considering withdrawing altogether–the Administration announced tariffs on certain imports that directly affect our neighbors to the immediate north and south.
Canada and Mexico are not only important allies, they are significant economic partners for the US, and for the New England states in particular. As the voice of the region’s business community, The New England Council believes it is of critical importance that the U.S. continue to work toward a modernized NAFTA, and that the Administration should reconsider the tariffs against our partners in Canada and Mexico.
The tariffs that President Trump has put into place are already having a significant impact here in New England. The U.S. Chamber of Commerce recently released a state-by-state analysis of the impact of the emerging trade war on U.S. exports. According to the report, as a result of the Administration’s tariffs, $125 million in Massachusetts exports to Canada are targeted for retaliation, and another $11 million in exports to Mexico are targeted for retaliation. Some of the hardest hit products include foods, household items, lighting, and furniture. In total, nearly $2.7 billion in New England exports to Canada and Mexico face retaliation.
It is certainly appropriate to revisit and update major trade agreements. Some elements of our economy did not even exist at the time NAFTA was first negotiated, and we commend the Administration for taking steps to modernize this historic agreement. At the same time, the President is right to be concerned about trade imbalances and to seek ways to minimize trade deficits. However, given the importance of trade with these two nations, it is gravely concerning that the Administration would even suggest withdrawing from NAFTA. Further, the evidence laid out by the U.S. Chamber’s new report suggests that the tariffs are most certainly not serving our nation’s best interests, and could harm disparate and unrelated sectors of our economy.
It is understandable that partners and neighbors, on occasion, can have temporary disagreements over policy considerations, including on trade matters. However, The New England Council believes it is crucial that the playing field remain open for businesses, workers, and families across New England, so that they – through no fault of their own – are not disadvantaged by potential retaliatory trade measures or a defunct NAFTA.
James T. Brett is the President & CEO of The New England Council, a non-partisan alliance of businesses, academic and health institutions, and public and private organizations throughout New England formed to promote economic growth.