[CTC] Rethink Trade Report: "Six Years Later: Rosy USMCA Promises Meet Reality"

[Arthur Stamoulis]

Will Trump Allow His “Incredible” USMCA to Fail? New Report Documents
Outcomes Opposite of Promised Gains, Major Fixes Needed



*As Six-Year USMCA Review Starts: U.S. Trade Deficit with Mexico and Canada
Up and Job Offshoring Continues, Marginal Gains in Worker Protections and
Ag Exports*



Washington, D.C. – A new report *Six Years Later: Rosy USMCA Promises Meet
Reality <https://rethinktrade.org/usmcaoutcomes/>* by American Economic
Liberties Project’s Rethink Trade finds that President Donald Trump’s
greatest first term trade achievement, the 2020 United States-Mexico-Canada
Agreement (USMCA), not only failed to meet his promises that it would end
job offshoring, create more U.S. manufacturing jobs and balance trade, but
that opposite outcomes resulted. With a March 16 meeting in Mexico
launching renegotiations related to the pact’s mandatory six-year review,
the report documents why significant improvements to the pact are needed
for it to deliver good-payingjobs, raise wages, rebalance trade, and improve
our security and resilience.

“President Trump’s recent dismissive comments don’t change the reality that
USMCA is his creation, and improvements are required for it to deliver the
high-wage U.S. manufacturing powerhouse and balanced trade he promised and
we need,” *said Lori Wallach, director of AELP’s Rethink Trade.* “President
Trump loves to blame past presidents for the wreckage caused by NAFTA, but
only major fixes will alter USMCA outcomes that are not so different given
the 91,000 drop in U.S. manufacturing jobs in 2025 shows tariffs alone
won’t fix our trade problems.”

The report provides expansive government and other data to measure the
USMCA’s outcomes relative to specific promises made by the first Trump
administration about what Trump called “the most important trade deal we’ve
ever made by far.” Key findings from *Six Years Later: Rosy USMCA Promises
Meet Reality *include:

*1. Trade Balance Outcomes: Deficits Deepened Instead of the Promised
Rebalance*

*Contrary to Trump’s pledge that USMCA would rebalance North American
trade, the U.S. goods trade deficit with USMCA partners rose by 36.3% in
real terms comparing 2019 to 2025.*

   - The increase was driven by the widening U.S.–Mexico goods trade
   deficit, which grew by 47% over the same period. This imbalance reflects
   persistently suppressed Mexican wages, particularly in
manufacturing. *Mexican
   manufacturing wages remain roughly 40% lower than Chinese manufacturing
   wages and 88% lower than those in the United States.*
   - U.S. firms’ production in Mexico to gain duty-free access to the
   United States intensified after the imposition of China tariffs during
   Trump’s first term: *U.S. foreign direct investment in Mexican
   manufacturing rose by 23% in 2024, with manufacturing accounting for 53% of
   total FDI.* As well, more than 200 Chinese manufacturing and
   infrastructure investments in Mexico, worth billions of dollars, by January
   2025.

*2. U.S. Manufacturing Employment Declined Under USMCA: Initial Auto Jobs
Gains Turned to a Small Net Loss as U.S. Manufacturing Jobs Declined
Overall*

   - *Trump promised that USMCA would create 80,000 new U.S. auto
   manufacturing jobs.** Today there are 36,200 fewer jobs in the sector
   than when USMCA began.*
   - *Under USMCA the overall number of U.S. manufacturing jobs has
   declined.* In January 2026, there were 12.59 American manufacturing
   workers relative to 12.74 million in February 2020, before COVID-related
   manufacturing job loss began. By December 2024, U.S. manufacturing
   employment had reached 12.69 million. But in the first 11 months of Trump’s
   second term (February–December 2025), the U.S. lost 91,000 manufacturing
   jobs. *Mexico added roughly 700,000 manufacturing jobs since USMCA
   began.*
   - In USMCA’s first two years (July 2020-July 2022), the U.S. government
   certified that 41,357 U.S. workers lost jobs due to trade with Mexico and
   Canada. Because Congress allowed the funding to lapse for the Trade
   Adjustment Assistance (TAA) program that certifies certain trade-related
   job losses, complete TAA data for the full six years of USMCA is not
   available.

*3.* *Sectoral Manufacturing Trade Results Versus Trump Promises: Mixed at
Best*

   - The U.S. steel trade balance improved after 2020, but the evidence
   indicates this was driven primarily by Section 232 tariffs, a new Biden
   administration “melted-and-poured” rule of origin unrelated to USMCA, and
   softer global demand constraining imports.
   - The autos and auto parts trade deficit with Mexico increased
   year-over-year from 2020 to 2024 but declined in 2025 after Section 232
   tariffs were imposed on the sector. As a result, the U.S. autos and auto
   parts trade deficit with Mexico fell by 1.9% from 2019 to 2025 even as it
   remained over $103 billion in 2025.

*4. Agriculture: U.S. Food Trade Deficits with Mexico and Canada Deepened
Under USMCA Even as Exports Grew in Some Sectors as Trump Promised*

   - *Comparing 2019 and 2025, the U.S. food trade deficit with Mexico and
   Canada grew 28.9% as imports outpaced exports. Food exports to USMCA
   partners grew 13.3%, but imports grew 18.4% over the same period.*
   - Trump’s sector-specific promises largely materialized: Dairy exports
   to Canada and Mexico increased by about 45%, poultry exports to Canada grew
   by 47%, and egg exports to Canada jumped by 158%. These gains were
   outweighed by large deficits in Mexican fruits and vegetables and rising
   imports of beef and live cattle from Mexico and Canada, despite the United
   States being a major beef producer.

*5. Labor Enforcement: Real Gains for Some Specific Workers, but Mexican
Wages Remain Below Chinese Levels, Revealing Structural Limits to Current
USMCA Labor Provisions*

   - *Between July 2020 and June 2025, the U.S. government initiated 37
   cases using USMCA’s novel Rapid Response Mechanism (RRM) that resulted in
   tens of thousands of workers benefitting from reinstatements, transparent
   union votes, and better workplace protections. *These cases, which
   enforce labor rights by targeting penalties at specific firms, covered 36
   facilities, primarily in the automotive and electronics sectors.
   - *But only 11 of 32 concluded cases resulted in new union
   representation or contracts. These gains occurred in the first years of
   USMCA. No new collective bargaining agreements resulted from cases in the
   last two years* as our analysis revealed a worrying trend in cases being
   settled without meaningful redress before formal reviews were even
   completed.
   - Half of the 32 concluded cases were closed as “resolved during
   review.” Companies that agreed to post information about labor rights or
   take other superficial measures avoided being bound to formal remediation
   plans or having their potential violations reviewed by an expert panel.
   Because the USMCA text does not include this option, it also does not
   define what consequences—if any—accrue. Thus, companies can avoid ongoing
   scrutiny, union-busting may go unaddressed, and there is no clear public
   record that rights were violated.

*6. Rules of Origin: Too Weak to Stop Third-Country Import Value Entering
United States*

   - USMCA strengthened rules of origin (ROOs), which set conditions goods
   must meet to get preferential trade treatment, for some goods like autos.
   (Only cars with at least 75% North American content, required regional
   steel and aluminum value, and 45% value made at plants paying at least
   $16/hour qualify for duty-free access.) Firms chose to pay low most-favored
   nation tariffs (2.5% for cars) instead of altering supply chains and
   raising wages to meet USMCA rules: *USMCA auto ROO
   compliance dropped after 2020 but jumped after the administration imposed
   significant tariffs on non-USMCA compliant goods. In 2024, ROO compliance
   was below 50% while by September 2025, it was nearly 90%.*
   - *The Labor Value Content (LVC) rule did not raise Mexican auto wages
   significantly. Average Mexican auto wages in 2025 were $5.70 per hour,
   while their U.S. counterparts made $32.81 per hour on average in 2025.*
   - Many critical manufacturing sectors—such as medical devices,
   electronics, and aircraft parts—retained weak tariff-line-shift rules. All
   components of a product can be imported into Canada or Mexico from China or
   other countries, lightly assembled, and still qualify for duty-free U.S.
   access. Roughly 20% of the value of Mexican exports to the United States
   consists of Chinese content, undermining USMCA’s core goals.

The Trump administration as well as American unions and civil society
groups have explicitly stated that the deal should not be extended *as-is* for
another 16-year term.

*See the report **here <https://rethinktrade.org/usmcaoutcomes/>**. *

*Rethink Trade is a program of the American Economic Liberties Project.
Learn more about **Economic Liberties <https://www.economicliberties.us/>*
* and **Rethink Trade <https://www.rethinktrade.org/>**.*

###

*The American Economic Liberties Project works to ensure America’s system
of commerce is structured to advance, rather than undermine, economic
liberty, fair commerce, and a secure, inclusive democracy. Economic
Liberties believes true economic liberty means entrepreneurs and businesses
large and small succeed on the merits of their ideas and hard work;
commerce empowers consumers, workers, farmers, and engineers instead of
subjecting them to discrimination and abuse from financiers and
monopolists; international trade arrangements promote balanced trade and
benefit workers, farmers, and small businesses; and wealth is broadly
distributed to support equitable political power. Rethink Trade was
established to intensify analysis and advocacy regarding the myriad ways
that today’s trade agreements and policies must be altered to undo decades
of corporate capture and to deliver on broad national interests.*
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