[CTC] EPI Report: Did Trump really fix NAFTA?

[Arthur Stamoulis]

https://www.epi.org/publication/did-trump-really-fix-nafta-what-usmca-failed-to-do-and-how-to-put-workers-first-in-north-american-trade/#full-report


Did Trump really fix NAFTA?What USMCA failed to do and how to put workers
first in North American trade

By Adam S. Hersh <https://www.epi.org/people/adam-s-hersh/> • December 11,
2025

Summary: Trump replaced NAFTA with the United States-Mexico-Canada
Agreement in 2020. But his USMCA has so far failed to make trade work
for North American workers.
Key findings

   -

   The U.S. trade deficit with Mexico and Canada has widened sharply since
   Trump signed USMCA; it reached a projected $263 billion in 2025, up
from $125
   billion in 2020.
   -

   Although the agreement sought to revitalize U.S. manufacturing
   industries, manufacturers across the country shed or furloughed more than
   576,000 jobs since he signed the agreement.
   -

   In the critical automotive industry that Trump said he wanted to
   reshore, imports of motor vehicles and parts from Mexico nearly doubled
   following USMCA, rising to $274 billion in 2024, up from $196 billion in
   2019: Light-duty vehicles imports from Mexico rose 36% while imports of
   medium- and heavy-duty vehicles increased a whopping 256%.
   -

   Though some USMCA labor reforms are worth preserving and expanding, the
   overall wage gap in manufacturing still fuels corporate offshoring to
   Mexico’s low-wage, low-standard environment. Mexican manufacturing wages
   are just $2.76 an hour—a mere 10% of U.S. manufacturing wages.
   -

   USMCA left a gaping loophole for Chinese manufacturers to exploit
   duty-free access to North American markets without reciprocal market access
   for U.S. manufacturers. Chinese firms expanded their direct investment
   footprint in Mexico by as much as 288% through 2023.

Why this matters

USMCA is now up for its 2026 sunset review, giving all three countries a
chance to decide its future. Trump’s version has already failed workers
across North America and urgently needs serious reform. Simply walking away
would not fix USMCA’s fatal flaws, but would instead saddle workers with
another 10 years of deindustrialization under unfair trade rules.
How to fix it

Instead of destabilizing North American trade, Trump and his negotiators
should use this opportunity to cement a model that protects workers while
preserving the mutual benefits of trade. This requires stronger regional
and labor value content rules, closing loopholes to unfairly traded foreign
content, and expanding cooperation to enforce strong rules across all three
countries.

*READ THE FULL REPORT: *
https://www.epi.org/publication/did-trump-really-fix-nafta-what-usmca-failed-to-do-and-how-to-put-workers-first-in-north-american-trade/#full-report
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