Knowledge Tree
Relations (1)
cross_type 4.09 — strongly supporting 16 facts
Mexico is a signatory country to the USMCA, which facilitates duty-free trade between it, the U.S., and Canada [1]. The agreement serves as a benchmark for tariff exemptions, as goods from Mexico that comply with USMCA rules are excluded from specific U.S. tariffs {fact:1, fact:12, fact:16}.
Facts (16)
Sources
Tariffs: Estimating the Economic Impact of the 2025 Measures and ... richmondfed.org 6 facts
claimScenario 2 of the proposed 2025 tariff package includes a 20 percent tariff on all imports from China, a 25 percent tariff on aluminum and steel imports from all countries, and a 25 percent tariff on goods imported from Canada and Mexico not covered under the United States-Mexico-Canada Agreement (USMCA).
measurementThe Richmond Fed's 'Scenario 2' economic model adds 25 percent tariffs on goods imported from Canada and Mexico that are not covered under the USMCA, resulting in an overall Average Effective Tariff Rate (AETR) increase from 7.1 percent to 10.4 percent.
claimTariffs of 25 percent on goods imported from Canada and Mexico that are not subject to the United States-Mexico-Canada Agreement (USMCA) are scheduled to take effect in April 2025, alongside potential tariffs on automotive imports and goods from the European Union.
measurementThe most aggressive tariff package simulated by the Richmond Fed includes a 25 percent tariff on EU imports, 20 percent on Chinese imports, 25 percent on steel and aluminum, 25 percent on non-USMCA goods from Canada and Mexico, and 25 percent on auto imports.
claimThe Richmond Fed observes that while approximately half of imports from Canada and Mexico fall outside the scope of the USMCA, these goods do not constitute the most import-heavy segments of U.S. trade with those countries, leading to a more dispersed impact across sectors compared to the high-volume sector targeting in Scenario 1.
measurementThe Richmond Fed's 'Scenario 2' tariff model assumes a 20 percent increase on all imports from China, a 25 percent increase on all aluminum and steel imports, and a 25 percent tariff on non-USMCA goods from Canada and Mexico relative to the benchmark case.
U.S. tariff outcomes dependent on trading partner responses dallasfed.org 3 facts
accountIn March 2025, the U.S. applied a 25 percent tariff on goods from Canada and Mexico, which was later adjusted to exclude USMCA-compliant items.
measurementU.S. agricultural and food exports encountered high tariffs in Mexico and Canada, and tariffs exceeding 50 percent in China, despite USMCA exemptions.
claimDue to the North American Free Trade Agreement (NAFTA), updated to the USMCA in 2020, Canada and Mexico were largely exempt from the higher U.S. tariffs that existed prior to the 2018–19 trade war.
Tracking Trump's Trade Deals | Council on Foreign Relations cfr.org 2 facts
claimWhile Canada and Mexico receive reciprocal tariff exemptions under the U.S.-Mexico-Canada Agreement (USMCA), neither country had a framework or reciprocal trade agreement on top of their existing Free Trade Agreement as of January 2026.
claimProducts from Canada and Mexico that comply with the U.S.-Mexico-Canada Agreement, as well as apparel and textiles originating from CAFTA-DR countries (Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua), are exempt from Section 122 tariffs.
How Tariffs Are Reshaping Global Supply Chains in 2025 supplychainbrain.com 1 fact
claimThe United States-Mexico-Canada Agreement (USMCA) facilitates duty-free trade between the United States, Mexico, and Canada, which encourages nearshoring of supply chains.
GEO-LAC: The Future of U.S. Trade Policy and Its Implications for ... americas.georgetown.edu 1 fact
claimThe upcoming 2026 review of the United States-Mexico-Canada Agreement (USMCA) creates structural uncertainty that could discourage investment if the United States, Mexico, and Canada do not affirm the agreement's continuation.
Academic Paper: The Future of Trade Wars in Trump's Foreign Policy eng.alzaytouna.net 1 fact
measurementApplying 25% tariffs on imports from Canada and Mexico that fall outside the US-Mexico-Canada Agreement coverage raises the average effective tariff rate (AETR) to 10.4%.
International Trade Agreements and U.S. Tariff Laws everycrsreport.com 1 fact
claimCanada and Mexico may argue that U.S. auto tariffs violate USMCA side letters that limit U.S. use of Section 232 against auto imports from those countries.
A tectonic shift in tariff policy | UN Trade and Development (UNCTAD) unctad.org 1 fact
claimThe United States introduced additional tariffs of 25% on goods from Mexico and 35% on goods from Canada that do not meet the US-Mexico-Canada Agreement (USMCA) rules of origin, with some lower rates applied to energy-related goods and potash.