US states are at different levels of economic risk if the United States-Mexico-Canada Agreement (USMCA) is terminated and Canada and Mexico impose retaliatory tariffs on US exports. This chart shows each state's exports to Canada and Mexico as a share of the state's total exports to the world and for which candidate each state voted in the 2024 presidential election. Nine of the ten states with the highest share of exports to Canada and Mexico as a share of the state's total exports voted for Donald Trump in 2024—Idaho, Iowa, Michigan, Missouri, Montana, New Mexico, North Dakota, Ohio, South Dakota, and West Virginia.
The USMCA, negotiated in the last year of Trump's first term in 2020, called for the parties to decide whether to renew its terms by July 1 this year. Trump has threatened to not renew it. Any of the three partners, but most likely the United States, could issue notice to terminate the pact in six months. That alone would resurrect most favored nation (MFN) tariffs between the partners. US MFN tariffs average around 3 percent, Canadian MFN tariffs around 6 percent, and Mexican around 7 percent. Following termination, the Trump administration might impose uniform tariffs of 10 to 15 percent on imports from Canada and Mexico, along with higher tariffs for national security claims (e.g., 50 percent on iron and steel, 25 percent on the non–North American component of autos). In turn, Canada and Mexico might take selective measures against US exports.
Returning to MFN tariffs, especially if Canada and Mexico impose retaliatory tariffs on US exports after Trump terminates the USMCA, would hit American exporters hard. It would be more difficult and costly for American businesses to sell their goods and services to Canadian and Mexican buyers, which could reduce the states' jobs and business tax revenue.
This PIIE Chart is adapted from Gary Clyde Hufbauer and Ye Zhang's blog post, "Which states and products risk the greatest losses if the USMCA is terminated?"
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