For Immediate Release: March 13, 2026
Press Contact: Doug Farrar,
douglas@maywoodstrategies.com
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 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-paying jobs, 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.
Rethink Trade is a program of the American Economic Liberties Project. Learn more about Economic Liberties and Rethink Trade.
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.